In the film Terminator a defence computer takes over the Earth by triggering a nuclear war. To safeguard its future, the sentient machine sends a ruthless cyborg back in time to execute the mother of a child who will eventually grow up and overthrow it.

An inventive plan, I think you'll agree, and one that has applications beyond that of world domination. Getting the jump on a competitor before they even know they're competing with you could give you a real edge in the business world.

Unfortunately you won't be reading about the Terminator strategy in any business manuals just yet. The equipment doesn't exist, and it would take a power-crazed technologically adept billionaire to build it. The person would also need access to huge amounts of capital, and be paranoid about holding onto his position.

But if it were possible, it would be as good an explanation as I can come up with for how Bill Gates has managed to stay ahead of the competition all these years.

Even the US government has failed to curb Microsoft's ambition. After making threats to break up the company six months ago, the Department of Justice has back-peddled, and now won't even restrict the features Microsoft can integrate into Windows.

Net gains

As we approach the end of 2001, Microsoft looks to be in a stronger position than ever. Despite coming quite late to the internet compared with some of its rivals, Microsoft's .Net strategy is beginning to gain acceptance as the de facto standard when it comes to web services.

It even looks as though Microsoft's C# programming language is gaining ground from that perennial thorn in Redmond's side, Java. Some experts are saying that C#, still only in beta, already has snappier performance than Java.

Once again Microsoft has its marketing spot on, and has positioned itself as a technology innovator. It has consistently managed to avoid becoming just another mundane box-shifter like other big players such as IBM.

Recipe for success

It looked as though Microsoft had missed the internet boat in the late 1990s. Now it has not only caught up with the competition, but pulled way ahead. There is no denying that it's a survivor, but why is it still top dog in one of the most competitive markets in the world?

Back in 1996 two of Microsoft's competitors came close to creating a partnership with the breadth to challenge it, but the deal never came off.

Since the late 1980s, Sun Microsystems and Apple had been dancing round making acquisition eyes at each other but, while both companies were doing well, neither was prepared to make the first move.

Bad Apple

But by the mid-1990s, thanks to increased competition on the desktop and a management crisis, Apple saw a $69m loss in its first quarter.

Sun chief executive Scott McNealy saw an opportunity to finally unite his company's killer server technology with Apple's funky reputation and user-friendly Mac OS desktop.

The resulting company would have been in with a chance of building a business desktop and server capable of making Bill Gates shake in his sandals. But Apple refused to bend on price and the deal fell through, leaving the market wide open for Microsoft.

With competition like that, you have to ask: is Microsoft at the top because of its successes, or the consistent failure of the opposition?

I don't know the answer, but looking at a photo taken at the Apple/Sun negotiations in 1996 there was one figure I couldn't identify: a well-built Austrian-looking gentleman, wearing a leather jacket and mirrored sunglasses, whispering in Scott McNealy's ear.