Eric Schmidt in the cloud of Google

Eric Schmidt is not Bill Gates. The cerebral computer scientist at the head of Google is far more affable than the intense, fiercely driven college drop-out who turned Microsoft into the world’s most powerful technology company.

For the past two decades, Mr Schmidt, 54, has pursued a vision for computing very different from Mr Gates. In fact, his career has been defined almost in opposition to that of the Microsoft co-founder. This week, as Google disclosed that it would release a PC operating system to rival Microsoft’s Windows, those two worlds collided.

If there is any personal animosity between the two men, it is not apparent. On Thursday, they met for lunch in the mountain air of Sun Valley, Idaho, at the annual retreat for media moguls and tech executives. Yet crossing swords with Mr Gates – and, often, losing – has had a deep effect on the Google CEO’s competitive psyche. “His life experiences have certainly shaped him,” says Vic Gundotra, a former senior Windows developer who is now vice president of engineering at Google.

It is a testament to Mr Schmidt’s skills as a strategist that he has been able to direct those painful experiences to such great effect at Google. Mr Schmidt first spelt out his vision for computing as chief technology officer of Sun Microsystems, which he joined in 1983 after an undergraduate degree at Princeton and a PhD in computer science at Berkeley. The mantra of that time was that “the network is the computer” with computing power increasingly centralised and personal computing devices acting as “thin clients” to connect users to these giant “brains”.

That vision has found its strongest manifestation so far in Google, which has mastered what is now known as “cloud computing” to push out services from its giant datacentres over the internet. Devices running its new Chrome OS operating system, planned for late next year, would act as the thin clients for this new web-based computing world, potentially making them far faster and cheaper than the software-laden PCs of Microsoft.

“Eric has been incredibly consistent about the power of the network,” says Mr Gundotra; indeed, he was “one of the first” to argue for it, while Mr Gates was late to respond, he adds.

Sun, however, failed to capitalise on its foresight. Mr Schmidt’s next job in 1997 as head of Novell, a networking software company, also saw him struggle with Microsoft. Novell committed the ultimate folly for a software company: trying to attack Microsoft head-on, with its own desktop applications. Arriving after Novell was bloodied from its failed assault, Mr Schmidt was unable to revive it.

At Google, which he joined as chairman in March 2001 before becoming chief executive in August 2001, Mr Schmidt has been determined not to repeat those mistakes. For years, while he has publicly disavowed any interest in pursuing a competitive strategy, he has directed an internal group of engineers – some of whom worked for Microsoft – to develop ways to counter it. According to one person familiar with the group, it has come up with some of Google’s most critical strategies, such as its software “toolbar” for launching its search service from inside a browser. While pursuing this secret strategy, Mr Schmidt also managed to avoid allowing Microsoft to become an obsessive fixation.

“He has been extremely reluctant to do anything that would seem like an act of bravado against Microsoft,” says a person who had an insight into his thinking from his early days at Google. He has shunned the path pursued by browser maker Netscape, which declared from the outset that its browser would develop into an operating system to rival Windows.

Google’s decision to avoid that strategy with, first, the 2008 launch of its Chrome browser and then a PC operating system based on Chrome, is testament to that self-restraint. Larry Page and Sergei Brin, the Google founders who work closely with him , had been urging this move for years. “They’ve wanted to do this project since founding the company,” Mr Schmidt said this week. “I resisted for the first six years.” With a nod at Netscape, he added: “I was concerned, after coming through the bruising browser wars, I did not want us to go through them again.”

By pursuing Google’s “cloud computing” approach to its logical conclusion, Mr Schmidt has treated the operating system business as simply an adjunct to a broader strategy, says another person who has been close to his thinking. “He’s very strategic. He sees you have to surround it, not attack it head on.”

Among the youthful, T-shirt wearing developers at Google, Mr Schmidt cuts a distinctive figure. Often in a crisp white shirt and tie, he seems happy to play the professorial elder statesman. That is also apparent in a consensual management style designed to marshal Google’s brainpower, rather than set the direction from above. Yet Mr Schmidt’s deep technical background and sharp intellect make him happy to spar when need be. Increasingly he has had to set a firmer direction as the maturing company trims unnecessary projects.

Despite the difference in personal styles and vision for technology with Mr Gates, there are parallels. “He has the detailed engineering mind that understands the technology from top to bottom, but also understands markets and business models – it’s the same combination that made Bill Gates so successful,” says Frank Quattrone, a veteran Silicon Valley banker who advised Google last year.

Google’s ambition to hire the brightest computer minds also echoes Microsoft. Yet while Mr Gates created a fiercely competitive intellectual culture, Mr Schmidt has fostered a more academic institution that can feel almost unworldly in its idealistic pursuit of the next computing breakthrough. His policy wonk side is also evident in his chairmanship of the board of the New America Foundation, a Washington think-tank.

Given their parallel histories, it is ironic that success is bringing some of the regulatory scrutiny Mr Gates faced. Mr Schmidt, despite playing a prominent role on President Barack Obama’s transition team, is now the focus of a US antitrust investigation into overlapping board seats between Google and Apple. Navigating these political tensions could be the next test of the deliberative skills that have defined his handling of the threat from Seattle.

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