Microsoft's Next Move -- The Brains Behind Windows Nt Could Make Company A Pile Of Money

Dave Cutler races cars, once put his fist through a wall and knows more about computer operating systems than Bill Gates.

Fortunately for Gates, Cutler works for Microsoft. Many believe Cutler is about to make the company another pile of money and possibly put the computer world on another path owned by Microsoft.

This month, Microsoft formally announces its newest product, Windows NT, an effort led by Cutler that is designed to eventually replace MS-DOS, Microsoft's operating system that runs the basic controls of 80 percent of personal computers worldwide.

NT, which is short for "New Technology," represents an enormous commitment by Microsoft. Some 300 people, including 100 software developers, have been working on a five-year project whose cost has been estimated at $400 million. NT is a major piece of the aggressive company's long-term, own-the-world strategy.

THE BURLY CUTLER is the sort of guy Bill Gates would want with him in a dark alley - which is one way of describing the looming battle over who supplies the next generation of operating systems. The market is worth billions of dollars a year.

Cutler has proven that he can generate phenomenal income for an employer - he did it at Digital Equipment Corp., where he led teams that created programs that generated billions of dollars a year in sales. "Cutler was a DEC corporate treasure," says Ed Lazowska, a professor of computer science at the University of Washington who calls NT "state of the art."

As the dominant maker of software for personal computers, Microsoft has many strategic advantages. But it is no exaggeration that Cutler alone gives NT a degree of added credibility.

Cutler declines to give interviews, citing time pressures. Microsoft says the program will be released to the public before the end of June, more than a year past its original shipment date.

"This work . . . is going to capture the industry," says Reid Brown, a software engineering manager for DEC and a former Cutler colleague. "If I had money in the bank, I'd put all of it on Dave."

THAT'S THE SORT of talk Cutler generates.

There are giants in the industry known to the public, people

such as Gates and Steve Jobs, formerly of Apple Computer. Then there are others whose skills as programmers and as managers of complex projects make them legends within the fraternity of software developers. In an industry noted for its hard work, Cutler is universally described as intense, at work or play.

There's even talk that Cutler might be smarter than Gates himself. That's heretical talk at a company that treats Gates' e-mail as scripture.

"He's more technical than Bill, and the word `technical' is used with a capital T at Microsoft," says Jesse Berst, editor and publisher for the newsletter, Windows Watcher. "Technical is next to godliness at the campus in Redmond."

The comment underscores the fact that Cutler has a following of his own. Microsofties tread delicately on the who-is-smarter question.

"We've got some smart people, but (Cutler) can go to some levels where Bill has never worked," says Dave Thacher, group product manager for Windows NT. "Then again (Bill) can go to levels that Dave has never worked."

Cutler doesn't look like the stereotypical computer geek with pencil neck and greasy hair.

He's broad-shouldered and muscular. He keeps his hair short. In the software world, he's also old - 50, which is ancient as far as Microsoft goes. People compare him to a Marine drill sergeant. But his tough-guy image disintegrates when he shows his farm-boy grin.

Cutler grew up in a rural community where his father was a janitor and his mother worked at various civil-service jobs. In high school, he was a stand-out athlete, earning 15 letters.

Cutler won a scholarship to Michigan's Olivet College, where he played quarterback on the football team and point guard on the basketball team. He graduated in 1965 with a major in mathematics and a minor in physics. After working for E. I. du Pont de Nemours & Co. as a programmer, he joined DEC in Maynard, Mass., where he was a key player in designing several operating systems, including the VAX/VMS operating system and the RSX-11 operating system for the PDP-machine.

CUTLER IS a hard-driving manager who insists on getting the job done without compromises. He personally writes critical pieces of software code and sets himself as a model for the effort and quality he wants in others. As for people who can't sustain the pace, "People that don't do their job get run over," he told the trade publication, UnixWorld.

"You expect to see him out commanding a platoon," says Lazowska, the UW professor. "And in one sense, that's what he does. He's extra good at leading small groups of really smart engineers at accomplishing something."

Cutler insists on what software developers call "clean architecture" - no patches, hacks or any Band-Aid solutions to problems.

Last year, when someone informed Cutler that a glitch had been discovered in NT, he vented his frustration by shoving his fist through a wall. At his subsequent birthday party, employees teased Cutler by presenting him a piece of the damaged wall in a picture frame. Cutler, whose anger blows over quickly, laughed at the gift, says Moshe Dunie, director of the Windows NT program.

CUTLER AND his team have spent more than two years putting in what Microsoft calls "extended hours," which often means both Saturdays and Sundays.

"Once I accept an assignment, I finish it. Nothing gets in the way save for total cancellation of the project," Cutler told UnixWorld.

Despite the pressure, hardly anyone in the NT team has dropped out, says Dunie. Everyone in the group is focused on the rare and exciting opportunity to write a new operating system, he says.

"People work for Dave and put in the hours for Dave almost out of worship," says Brown of DEC. "He's so good."

It's not all keyboard pounding. Cutler parties just as hard as he works. For one break, he and other developers took race-car driving lessons at a school in California.

A few years ago, Cutler decided to take up skiing. Without lessons, he quickly reached the expert level. For relaxation, he and other NT developers go night skiing and try to see how many runs they can get in before the lights are turned off. Like many Microsoft workers, he's competitive about nearly everything.

"He relaxes ferociously," says Brown.

FOR CUTLER, making NT a hit is not just business. It's personal.

One of his motives is to settle a score. DEC headquarters in 1988 canceled an operating system aimed at replacing VMS/VAX that he and others had spent three years working on. An angry Cutler assembled his staff of some 200 people working in Bellevue and told them to take the month off - reportedly without any authorization from headquarters. Cutler eventually wound up at Microsoft, bringing some DEC people with him. Now Cutler's NT is poised to hasten the demise of VMS/VAX, DEC's aging cash cow.

"If there's one thing I want to do it's to beat DEC," Cutler told UnixWorld. "I think the greatest way to do that is for them to have to buy and sell an operating system that they could have gotten for free if they had not driven me out."

As it turns out, DEC has announced that it will use NT on systems running its new Alpha microprocessor. That has greatly pleased Cutler, says Dunie. But Cutler's overall goal has always been to create a great product, says Dunie.

Great or not, NT is about to be released into a market occupied with strong competitors. Sun Microsystems, IBM, Apple, Novell and other companies have strong offerings ready or in the works.

Even so, Microsoft already seems to be winning the game of expectations. When IBM released OS/2 2.0 last year, Microsoft successfully persuaded people to criticize the program as too big. Now that NT is even bigger, Microsoft is directing attention to other measures.

"Landslide: Every major software vendor is now behind Windows NT" says InformationWeek, reflecting the view that Microsoft has what George Bush, in politics, called The Big Mo - momentum. The momentum is driven by a marketplace dominated by MS-DOS and Windows, the point-and-click update of DOS that imitates the Apple Macintosh's look and feel.

MICROSOFT HAS distributed about 130 million copies of DOS and some 25 million copies of Windows. In an industry driven as much by fear as brain work, many developers now worry that they'll have to write to NT or risk losing the market. "NT or die?" asked UnixWorld.

Microsoft, selling in a market splintered by competing systems, also is offering NT as the one place to be - or the only place to be. First for larger computers and later desktop machines. "NT wants to replace everything as far as I can tell," says Paul Cubbage, director and principal analyst at Dataquest, a market research company.

Microsoft has scaled back its predictions that NT will be found on desktop computers soon. Instead, it's saying that NT will be sought by users of larger computers. Even so, some analysts say NT will open a new stream of money flowing into Microsoft that eventually will become a river.

Scott McAdams, an analyst with Ragen MacKenzie in Seattle, predicts NT will sell 1.1 million copies in its first 12 months, bringing in $140 million to Microsoft. By the mid-1990s, NT will generate $1 billion a year, he predicts.

Thacher of Microsoft says his company has sold developers 65,000 kits for writing software for NT. Statistics like that fuel the impression Microsoft cultivates - that the world has turned to NT even before its release.

THOUSANDS OF businesses and software developers have been testing NT. So far, the word is pretty good.

"We are ravingly enthusiastic," says Larry Heberlein, director of Seattle Lab, a software developer.

Bankers Trust Co. of New York has been looking at NT for use in its organization of more than 12,000 employees. Michael Packer, managing director, says early versions look promising, but he's not yet ready to commit.

"We've been looking at NT for a long time, but until it's a real product, don't wake me," says Packer.

If Cutler is anything like a Marine drill sergeant, get ready for a loud wake-up call.