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THE TELEVISION PROGRAM TRANSCRIPTS: PART III

In 1980, just four years after being founded in a Californian garage, Apple was the biggest maker of PCs in the world. Computer giant IBM was not amused and fought back, launching its own PC in 1981. Though built from copy-cat technology, IBM's PC was an enormous hit and spawned many imitators, the PC clones. But PCs were still a pain to use. A revolution was needed to make them friendlier. Now view on.

Ladies and gentlemen welcome to the launch of Windows 95. Yes welcome Microsoftees nice to have you all here. But now let's welcome the chairman of Microsoft. Listen to this. This is a man, a man so successful his chaffeur is Ross Perot ladies and gentlemen...please welcome Bill Gates.

It's August 24th, 1995. In a suburb of Seattle in the Pacific Northwest, this is the biggest, noisiest product launch in the history of the personal computer. It's Windows 95 software - and Bill Gates is the star, chairman, chief nerd and spiritual leader of Microsoft. This is the latest step in Bill's dream to have his software running on every PC in the world.

Bill Gates
We wanted people to be able to appreciate how Windows 95 makes computing faster, easier and more fun. And for seven years it was a lonely, lonely crusade...this moves the whole PC industry up to a whole new level...

Wait a minute all this publicity is so Bill Gates can claim that Windows 95 is the latest and perhaps the most significant improvement in the PC since it was invented. He can say that his new operating system makes PC's nicer to look at and easier to use than ever before. They'll no longer be just for geeks and nerds they'll be so easy to use that even my mother will want one...but you know what - most of the ideas in Windows 95 were invented twenty years ago. The 20 year journey to this software celebration hasn't been easy. It has involved huge gambles, passionate commitment, dramatic setbacks and required the occasional crushing of rivals and allies. It's the triumph of Bill Gates' commercial vision. Success in the market place doesn't have to come from innovation, or from being the best, if you have a ruthless ability to exploit your opportunities. And the way Microsoft made the PC's graphical user interface its own is a textbook example of that ability. Time for another Cringely crash course in elementary computing. In the early days of personal computing the machines were pretty hard to use in part that's because they were primitive but it's also because computer guys tend to like things that are pretty hard to use. This is an IBMPC circa about 1983 and on it I have written a letter to my bank manager asking him to back one of my get rich quick schemes and I need to file the letter now and let me show you how I do it - there will be a test on this. OK the commands are - copy c, colon, backslash, quickrich, dot, doc space a colon bakcslash begging and return - well not very easy to do. Here's a windows PC about twelve years newer and we'll do exactly the same thing - I've written a document - quickrich, dot doc and I put it in the begging file and it yes I really do mean to do it and that's it. Pictures rather than words making the PC easy and intuitive. This is called a graphical user interface - GUI or gooey - where they come up with these names. The battle to bring gooeys to PCs and make them more user friendly took ten years and is a helluva story - that is what this program is about. It's also about how Bill Gates ended up master of the gooey universe and a gazillionaire. I never said it was a fairy story. It all began in 1971 in Palo Alto, just south of San Francisco, when Xerox, the copier company, set up the Palo Alto Research Center, or PARC. The Xerox management had a sinking feeling that if people started reading computer screens instead of paper, Xerox was in trouble. Unless...they could dominate the paperless office of the future.

Bob Taylor
Former Head of Computer Science Lab, Xerox PARC
You could take computer technology into the office and make the office a much better place to work, more productive, more enjoyable - a lot more enjoyable, ehm more interesting, more rewarding and so we set to work on it.

Bob Taylor ran the Computer Science Lab and one of the first things he did was to buy bean bags for his researchers to sit on and brainstorm.

Bob Taylor
Here's a couple of the original beanbag chairs. The role of the beanbag in computer science is ease of use.
BOB: OK.

It was said that of the top 100 computer researchers in the world, 58 worked at PARC. Strange, as the staff never exceeded 50.

Bob Taylor
See you didn't get your butt low enough...

But Taylor gave these nerd geniuses unlimited resources and protected them from commercial pressures.

BOB: It's very comfortable.
BOB TAYLOR: Now let's see you get out of it.
BOB: I feel my neural capacity already increasing - Oh God...

John Warnock
Former Xerox PARC Researcher
The atmosphere was electric eh there was total intellectual freedom. There was no conventional wisdom almost every idea was up for challenge and got challenged regularly.

Larry Tesler
Former Xerox PARC Researcher
The management said go create the new world. We don't understand it. Here are people who have a lot of ideas and tremendous talent, young, energetic.

Adele Goldberg
Former Xerox PARC Researcher
People came there specifically to work on five year programs that were their dreams.

This is a computer room in the basement of the Xerox Pala Alto Research Centre...about twenty five years ago they built the max time sharing system and now it's loaded with all sorts of other computers and eh there's one that we're really interested in here let's see here it is let me turn on the lights. OK here we have it. This is a Xerox/Alto computer built around 1973. Some people would argue that this is the first personal computer. Ah it really isn't because for one thing it wasn't ever for sale and the parts alone cost about $10,000 but it has all the elements of quite a modern personal computer and without it we wouldn't have the Macintosh, we wouldn't have Windows we wouldn't have most of the things we value in computing today and ironically none of those things has a Xerox name on it.

Commercial
WhatÍs the mail this morning?

This promotional film made in the mid seventies, to flaunt XEROX PARC research, shows just how revolutionary the Alto was. It was friendly and intuitive.

Commercial
This is an experimental office system. It's in use now...

It had the first GUI using a mouse to point to information on the screen. It was linked to other PCs, by a system called ethernet, the first computer network. And what you saw on the screen was precisely what you got on your laser printer. It was way ahead of its time.

Commercial
Thank you Fred.

Many of the research team left Xerox, they started their own companies and made a lot of money by exploiting their own ideas. Bob Metcalfe made enough from what he invented at PARC to furnish him with the good things in life - including this boat and a prime berth in New York Harbour whenever he visits the Big Apple.

Bob Metcalfe
Former Xerox PARC Researcher
And here I am happy and healthy and I invented ethernet! HAHAHA And there's now 50 million people using ethernet which is pretty amazing.

Those early PARC researchers were truly inventing the future.

Bob Metcalfe
We're going to build these personal computers - we're going to put one on every desk. Now in 1996 one on every desk doesn't sound that amazing does it...but in 1971/2 you were lucky to have a computer in your city let alone your building and if it was in your building there'd be one and we were talking about putting them on every desk and this required a new kind of network.

Larry Tesler
Everybody wanted to make a real difference, we really thought that we were changing the world and that at the end of this project or this set of projects personal computing would burst on the scene exactly the way we had envisioned it and take everybody by total surprise.

But the brilliant researchers at PARC could never persuade the Xerox management that their vision was accurate. Head Office in New York ignored the revolutionary technologies they owned three thousand miles away. They just didn't get it.

John Warnock
None of the main body of the company was prepared to accept the answers. So there was a tremendous mismatch between the management and what the researchers were doing and these guys had never fantasised about what the future of the office was going to be and when it was presented to them they had no mechanisms for turning those ideas into real live products and that was really the frustrating part of it was you were talking to people who didn't understand the vision and yet the vision was getting created everyday within the Palo Alto Research Centre and there was no one to receive that vision.

But a few miles down the road from Palo Alto was a man ready to share the vision. The most dangerous man in Silicon Valley sits in an office in this building. People love him and hate him. Often at the same time. For ten years by sheer force of will he made the personal computer industry follow his direction. With this guy we're not talking about someone driven by the profit motive in a desire for an opulent retirement at the age of forty, no we're talking holy war we're talking rivers of blood and fields of dead martyrs to the cause of greater computing. We're talking about a guy who sees the personal computer as his tool for changing the world. We're talking about Steve Jobs.

Steve Jobs
Hi I'm Steve Jobs.

Larry Tesler
When I wasn't sure what the word charisma meant, I met Steve Jobs and then I knew.

Bob Metcalfe
Steve Jobs is on my eternal heroes list, there's nothing he can ever do to get off it.

Larry Tesler
Chief Scientist, Apple Computer
He wanted you to be great and he wanted you to create something that was great and he was going to make you do that.

Bob Metcalfe
He's also obnoxious and this comes from his high standards. He has extremely high standards and he has no patience with people who don't either share those standards or perform to them.

Steve Jobs
And I'm also one of these people. I don't really care about being right you know I just care about success.

Steve Jobs had co-founded Apple Computer in 1976. The first popular personal computer, the Apple 2, was a hit - and made Steve Jobs one of the biggest names of a brand-new industry. At the height of Apple's early success in December 1979, Jobs, then all of 24, had a privileged invitation to visit Xerox Parc.

Steve Jobs
And they showed me really three things. But I was so blinded by the first one I didn't even really see the other two. One of the things they showed me was object orienting programming they showed me that but I didn't even see that. The other one they showed me was a networked computer system...they had over a hundred Alto computers all networked using email etc., etc., I didn't even see that. I was so blinded by the first thing they showed me which was the graphical user interface. I thought it was the best thing I'd ever seen in my life. Now remember it was very flawed, what we saw was incomplete, they'd done a bunch of things wrong. But we didn't know that at the time but still though they had the germ of the idea was there and they'd done it very well and within you know ten minutes it was obvious to me that all computers would work like this some day.

It was a turning-point. Jobs decided that this was the way forward for Apple.

Adele Goldberg
Founder, PARC Place Systems
He came back and I almost said asked, but the truth is, demanded that his entire programming team get a demo of the Smalltalk System and the then head of the science centre asked me to give the demo because Steve specifically asked for me to give the demo and I said no way. I had a big argument with these Xerox executives telling them that they were about to give away the kitchen sink and I said that I would only do it if I were ordered to do it cause then of course it would be their responsibility, and that's what they did.

Demonstration
The mouse is a pointing device that moves a cursor around the display screen.

Adele and her colleagues showed the Apple programmers an Alto machine running a graphical user interface.

Demonstration
A selected window displays above other windows much like place a piece of paper on top of a stack on a desk.

The visitors from Apple saw a computer that was designed to be easy to use, a machine that anybody could operate and find friendly...even the French.

Bill Atkinson
Designer, Macintosh Development Team
I think mostly what...what we got in that hour and a half was inspiration and just sort of basically a bolstering of our convictions that a more graphical way to do things would make this business computer more accessible.

Larry Tesler
After an hour looking at demos they understood our technology, and what it meant more than any Xerox executive understood after years of showing it to them.

Steve Jobs
Basically they were copier heads that just had no clue about a computer or what it could do. And so they just grabbed eh grabbed defeat from the greatest victory in the computer industry. Xerox could have owned the entire computer industry today. Could have been you know a company ten times its size. Could have been IBM - could have been the IBM of the nineties. Could have been the Microsoft of the nineties.

For Steve Jobs the road to Damascus passed through Palo Alto. He persuaded the Apple board to invest in technology copying what he'd seen at Xerox Parc - his instrument of change. They hired a hundred engineers and started developing a new PC codenamed Lisa. But there were problems. They couldn't get it to work properly and the pricetag was heading toward $10,000 - way too much for the average PC buyer. Jobs' domineering style drove everyone nutstoo so the board ousted him from his own pet project.

Steve Jobs
You know I brooded for a few months, but it was not very long after that that it really occurred to me that if we didn't do something here the Apple 2 was running out of gas and we needed to do something with this technology fast or else Apple might cease to exist as the company that it was.

Jobs found his answer from Jeff Raskin, Apple employee number 31. Raskin's idea was a $600 computer - as easy to use as a toaster - code-named Macintosh, after America's favourite apple. Jobs liked the price but not Raskin's design ideas. So Steve took over the Macintosh project, determined to make it a cheaper Lisa.

Steve Jobs
And so I formed a small team to do the Macintosh and we were on a mission from God you know to save Apple.

Steve needed to find the right people to join in his technological crusade...brilliant engineers who would worship him.

Andy Hertzfeld
Designer, Macintosh Development Team
Steve Jobs kind of came bopping by my cubicle saying OK you're working on the Mac now. And I said well I have to finish up this Apple 2 stuff I'm doing here. No you don't that stinks that's not going to amount to anything you gotta start now. And I said well just give me a few days to finish and he said no and what he did was he pulled the plug on my Apple 2 that I was programming just losing, losing the code I'm working on and start taking my computer and walking away with it and what could I do but follow him out to his car cause he had my machine he plopped it down in the trunk and drove me over to this remote building, took the computer out, walked upstairs, plopped it down on a desk, well you're working on the Mac now.

While Jobs pursued his MacMission he needed a more orthodox chief executive to run the company. A respectable face who could sell to corporate America. He chose Pepsi-Cola executive John Sculley. Sculley refused - leave Pepsi for 4 year old company that had been set up in a garage! Are you serious?! But it was hard saying no to Steve Jobs.

John Sculley
President, Apple Computer, 1983-93
And then he looked up at me and just stared at me with the stare that only Steve Jobs has and he said do you want to sell sugar water for the rest of your life or do you want to come with me and change the world and I just gulped because I knew I would wonder for the rest of my life what I would have missed.

For the young Mac team, average age 21, this was the start of the toughest, but most exhilarating assignment of their lives, relentlessly driven by Jobs' ego.

BOB: Oh look at this and who is this fresh-faced young guy here?
ANDY: That's me eleven years ago - had more hair I guess little thinner. Oh I love these people. They're like family to me really and we were united by this common bond of trying to do this incredible thing with the Mac.

Jobs wanted the Mac to revolutionise the PC market - so he insisted that the team deliver perfection.

Andy Hertzfeld
Steve was upset that the Mac took too long to boot to boot up when you first turned it on so he tried motivating Larry Kenyon by telling him well you know how many millions of people are going to buy this machine - it's going to be millions of people and let's imagine that you can make it boot five seconds faster well that's five seconds times a million every day that's fifty lifetimes, if you can shave five seconds off that you're saving fifty lives. And so it was a nice way of thinking about it, and we did get it to go faster.

Larry Tesler
And the little things he did would create incredible pressure unlike I'd ever experienced before just tearing you to the bone ripping you apart and making you feel worthless.

Bill Atkinson
I mean, he would sometimes tell people this is shit and you had to understand what that meant in Jobs language, you see.
BOB: What did it mean?
BILL: As an engineer, if you understood his language you would understand that that was a request to teach me about this.

Steve Jobs
No that's not usually what I meant. I you know when you get really good people they know they're really good and you don't have to baby peoples egos so much.

Bill Atkinson
And maybe in the process of that dialogue Steve will suggest something that caused his engineers to go back and make it better yet and that's actually what a happened a lot of times Steve really did make the product better without even knowing exactly how the engineer was doing it.

Andy Hertzfeld
And then this is one of the very first Macintosh wire-wrap. This is wire-wrap board No. 4.

As the Mac progressed, new features were continually being added. Jobs said the Mac had to be 'insanely great' and pushed his engineers to the limit. He had to - because by early 1983, Apple was in trouble. And this was what was giving Apple such a headache...IBM's first PC launched in 1981. It was a runaway success. Within a couple of years more than 2 million units had been shipped overtaking Apple and making Big Blue the biggest player in the market.

Commercial
When IBM personal computer owners look for good software where can they turn - to IBM.

What was driving IBM PC sales was software...

Commercial
Business program, entertainment, productivity, education.

But software for an IBM wouldn't run on the Mac. If the Macintosh was to succeed Jobs needed killer applications. Enter 25 year old software supremo Bill Gates. At that time his company Microsoft had one hundred workers and was growing like crazy thanks to DOS, the operating system that drove the IBM PC. But DOS sure wasn't a GUI. Gates and his aggressive number 2 Steve Ballmer were immediately intrigued by the Mac.

Steve Ballmer
Jobs talked to Bill at some industry conference and said hey we're doing, I think LISA was sort of in development and he said I'm gonna do the graphical interface machine here at Apple not just that LISA thing Bill I'm going to do the one the one that's really going to be the winner.

While the Mac was being developed, Jobs staged an event, a parody of a TV game show, to whip up enthusiasm among software developers.

MAC Dating Game
And now ladies and gentlemen the Macintosh Software Dating Game...

Jobs got the three top software bosses of the time to sing the Mac's praises. One of them was Bill Gates. Steve didn't realise he was opening the door to the man who'd prove to be Apple's main rival.

JOBS: When was your first date with the Macintosh?
GATES: We've been working with the Mac for almost two years now and we put some of our really good people on it and eh...

Bill Gates
Even before we finished our work on the IBM PC, er, Steve Jobs came and talked about what he wanted to do what he thought he could do sort of a LISA but cheaper. We said boy we'd love to help out. The LISA had all its own applications but of course they required a lot of memory ah and we thought we could do better and so Steve signed a deal with us to actually provide bundled applications for the first Mac and so we were big believers in the Mac and what Steve was doing there.

Steve Jobs
Most people don't remember, but until the Mac Microsoft was not in the applications business...it was dominated by Lotus. And Microsoft took a big gamble to write for the Mac.

Bill Gates
I signed up for Excel and Chart and File. He didn't buy Word because he had Macwrite going on and so we were part of that Mac development.

Steve Jobs
And they came out with applications that were terrible, but they kept at it and they made them better.

Bill Gates
Once again we had more people than Apple did for most of that development and they, they did all the key work but we got to do a lot of tests you know.

Jeff Raikes
Vice-President, Microsoft
And so we got started in early 1982 on our Macintosh software effort and I think at that point in time you know, it really clicked with Bill that you know, graphic user interface was going to be the way, the way of the future.

But while Bill was having his own GUI revelation, Jobs believed that Apple's true enemy was IBM.

Steve Jobs
Will Big Blue dominate the entire computer industry...the entire information age, was George Orwell right about 1984?

Despite Steve Jobs' showmanship, the IBM PC was hurting Apple's business.

John Sculley
And most pundits considered that Apple was going to be out of business in a few short months. Business Week ran an article on their cover saying ehm "It's Over - IBM Has Won."

The Mac team saw themselves as Apple's pirates but the gang was now being called on to save the ship, as the Apple II was losing precious market share.

John Sculley
In the case of the Macintosh team ehm they were behind schedule in getting the Mac out which was not unusual in high technology ehm and so just getting that product to market was extremely important.

After many delays, a date for the launch of the Mac was announced. The pressure of the deadline was mounting, but Steve was still a perfectionist.

Chris Espinosa
Manager Media Tools, Apple
I had a huge screaming match with him about the software is written if we change it we've got to test it you know we're going to risk product quality, the manuals are already pasted up we've got to go to press if you do this it's going to slip the product. I don't care it sucks we can't do it this way. No design issue was too small and it was never too late to do it right.

Andy Hertzfeld
It was a pressure cooker. We were working until we finished. We couldn't go to sleep or anything I was up for three days in that very last push and finally the stars aligned and the last release we made at six a.m. that morning.

It was now all or nothing, because Lisa had turned out an expensive flop. The fate of the whole company seemed to rest on the launch of the Mac. John Sculley had even authorised a 15 million dollar advertising campaign to coincide with the Mac's public unveiling - January 24th, 1984.

John Sculley
I remember how nervous Steve was before the introduction of the Macintosh and the rehearsal the night before was a total disaster ehm nothing seemed to go right, Steve was upset at everybody, we wondered how in the world we were going to get through the introduction the following day but when that moment came Steve was a master showman.

Steve Jobs (AT LAUNCH)
There have only been two milestone products in our industry - the Apple 2 in 1977 and the IBM PC in 1981. Today...one year after LISA we are introducing the third industry milestone product...Macintosh. Many of us have been working on Macintosh for over two years now and it has turned out insanely great. You've just seen some pictures of Macintosh now I'd like to show you Macintosh in person.

The Macintosh was undoubtedly the first affordable personal computer with a genuine graphical user interface. It was also the first computer to be a monument to one man's ego. Forget the brilliant work done at Xerox PARC and the innovations borrowed from the Lisa. On the day only one man was claiming paternity for the Mac.

Computer Voice
So it is with considerable pride that I introduce a man who's been like a father to me - Steve Jobs.

John Scully
I was standing off-stage and as he came off he said this is the proudest happiest moment of my life and it was all over his face it clearly was cause he had launched a revolution.

Steve Jobs
Ultimately it comes down to taste. It comes down to trying to expose yourself to the best things that humans have done and then try to bring those things in to what you're doing. I mean Picasso had a saying he said good artists copy great artists steal. And we have always been shameless about stealing great ideas ehm and I think part of what made the Macintosh great was that the people working on it were musicians and poets and artists and zoologists and historians who also happened to be the best computer scientists in the world.

With delusions of grandeur running rampant, Apple created a Hollywood-style TV commercial. It symbolised how the friendly Mac would free us from the Orwellian tyranny of clunky IBM PC's. Pleeeeeease! Despite the hype, by late 1984, the Mac's sales were disastrous. In ad after ad, Apple desperately pointed out that the Mac was far easier to use than the IBM PC. But it sold for $2500 - a thousand more than the IBM. And despite Jobs' best efforts in recruiting software makers like Bill Gates, applications were scarce.

John Sculley
It didn't do very much. We had Mac Paint and Mac Write were our only applications and the market started to figure this out, by the end of the year people said well maybe the IBM PC isn't as easy to use or is not as attractive as the Macintosh but it actually does something that we want to be able to do - spreadsheets, wordprocessing and database and so we started to see the sales of the Mac tail off towards the end of 1984, and that became a problem the following year.

Cringely's Third Law of Personal Computing was right again - to succeed, a PC must have an application which alone justifies buying the whole box. The IBM PC had Lotus 1-2-3. The Mac needed its killer application. Wysiwyg - another bunch of initials, from the world of the nerds. What you see is what you get - so what's the big deal? Well it turns out that it's very hard to print on paper exactly the same image that you see on the computer screen. Eighty per cent of our brain is devoted to processing visual data but that's not the same for computers. I've been here writing a letter to my Mum and I'm signing it Bob in 72 point Times Roman Italic type as befitting myself and when I tell it to print - what comes out is a Bob but certainly not the Bob that I intended. Until someone invented a way to print exactly what was on the screen gui would be, well a lot of hooey. Apple's problem was the dot matrix printer. It gave everything a type-writer quality. But salvation was at hand - and once again it owed a lot to Xerox Parc. One of Parc's former brains, John Warnock, had invented a technology that allowed a laser printer to print exactly, precisely what was on your screen. He started a company called Adobe to market his invention - when along came Steve Jobs.

Steve Jobs
But I heard a few times, people would tell me, hey there was these guys over in this garage at Xerox Parc you ought to go see em and I finally went and saw em and I saw what they were doing and it was better than what we were doing.

John Warnock
Co-founder, Adobe Systems
Steve Jobs came in, he told us about the Macintosh. He knew that the dot matrix printers, the old image writer that they had was not going to fly in a business environment. He had no...he and Atkinson had not been able to figure out how to drive laser printers and what we had figured out how to do what no-one else had figured out how to do was drive laser printers.

Steve Jobs
Within two or three weeks we had cancelled our internal project, a bunch of people wanted to kill me over this but we did it and I had cut a deal with Adobe user software and we bought 19.9 per cent of Adobe at Apple.

The investment paid off. The power of precise laser-printed images and a user friendly gui gave birth to a brand new business - desk-top publishing. The spreadsheet had made us all accountants. Now using break-through software we could create fancy artwork, snappy-looking note-paper - even counterfeit money. The Mac had found its killer application - and would soon become the PC of choice for any creative business.

Dana Muise
Founder, Hypnovista
It changed my life that one instant when I picked up the mouse my whole life changed to building a career as a computer artist.

The success of desk-top publishing came too late for Apple's founder. In 1985 Mac sales were still flat but Jobs refused to believe the numbers. He simply behaved as if the Mac was a hot seller from the start.

Chris Espinosa
The grandiose plans of what Macintosh were going to be was just so far out of whack with the truth of what the product was doing and the truth of what the product was doing was not horrible it was salvagable but the gap between the two was just so unthinkable that somebody had to do something and that somebody was John Sculley.

John Sculley, whom Jobs saw as his own creation, presented the board with his strategy to save the company. The plan did not include Steve Jobs.

John Sculley
The board had to make a choice, and I said look, it's Steve's company, I was brought in here to help you know, if you want him to run it that's fine with me but you know we've at least got to decide what we're going to do and everyone has got to get behind it.

Andy Hertzfeld
But he took it as a personal attack, started attacking Scully you know and which, backed himself into a corner because he was sure that the board would support him and not Sculley.

John Sculley
And ehm ultimately after the board talked with Steve and talked with me, the decision was that we would go forward with my plans and Steve left.

Steve Jobs
Ehm what can I say? I hired the wrong guy.
Q: That was Sculley?
JOBS: Yeah and eh he destroyed everything I spent ten years working for. Ehm starting with me but that wasn't the saddest part. I would have gladly left Apple if Apple would have turned out like I wanted it to.

Larry Tesler
People in the company had very mixed feelings about it. Everyone had been terrorised by Steve Jobs at some point or another and so there was a certain relief that the terrorist had gone but on the other hand I think there was an incredible respect for Steve Jobs by the very same people and we were all very worried - what would happen to this company without the visionary, without the founder without the charisma...

Andy Hertzfeld
Apple never recovered from losing Steve. Steve was the heart and soul and driving force. It would be quite a different place today. They lost their soul.

Ironically the years after Jobs left were Apple's most profitable. Apple people played hard, they worked hard. They made the computer business look like a beach party and with a median age of twenty seven the company was very sexy...maybe too sexy. There was so much sleeping around that they came up with a travel policy back then that men would share rooms with other men on the road and women with other women - just to settle it down a bit. They applied the California lifestyle to the computer industry and the computer industry would never be the same again. In this bizarre promo to inspire their sales force, Apple stressed that the Mac's ease of use could liberate the pathetic prisoners of the IBM PC.

Promo
We'll fight them in the office and the classroom and the desktop with superior weapons.

With improvements to the hardware and the boom in desktop publishing, Mac production went into overdrive. By 1987, Apple was selling a million a year. IBM numbers! The Mac minted money - half its 2000 dollar price was pure profit! Apple arrogantly assumed their stuff was so good, consumers would always pay a premium for it. Big mistake. The Mac really ought to have won the battle for the desktop - OK it was more expensive than an IBM PC but if you what you wanted was a friendly easy to use system and surely everyone wanted that, then this was the only game in town - at least that's what the boys at Apple thought but they weren't reckoning on one man, Bill Gates. Gates saw that the Mac's GUI represented a long term threat to Microsoft's money machine, to DOS, the clunky operating system that sat inside every IBM PC. So Bill had his boys create a GUI that sat in top of DOS rather like building a fancy facade on an old building. They called it Windows and it wasn't much at first but it was good enough to defend the DOS franchise.

Jeff Raikes
February or March of 1984, which was just right after the Apple Macintosh had been introduced. And at that point in time we were firmly convinced that we needed to bet on graphic user interface. First with the Macintosh and then with Windows.

At Microsoft, it was a long and often frustrating struggle to find a GUI solution that challenged the MAC. I know the feeling! For years teams of Microsofties slaved in their windowless offices to build Windows - refreshed by an endless supply of free sodas.

Steve Ballmer
I was the development manager for Windows 1.0 and we kept slogging and slogging yeah I don't know about seven versions just a few versions to get things right for 1990, that's right.

Windows may at first have been a joke compared to the Mac. But Gates is persistent. Slowly it got better - and the guys at Apple got worried. As each new feature appeared on the Windows gui, the more they thought Microsoft was copying the features on the Mac. So finally they sued Microsoft, accusing them in a long legal battle of stealing the look and feel of Apple's gui.

John Sculley
The look and feel which is how it looks, the experience of using it was not patentable but it was copyrightable but there was no precedent law. This was going to be a precedent setting case.

Bill Gates
But it was a period of five years where, Microsoft er, our whole strategy would have been ruined because Windows was very important to us.

Larry Tesler
They weren't going to change anything and ehm they were going to get us to cave in or take us all the way to the Supreme Court on this thing.

Bill Gates
We assumed that the lawyers, the judges would all come to the right conclusion which eventually they did.

John Sculley
And Apple lost. But in that period of about six years that this case was going on it may have lulled us into a bit of complacency thinking that we were going to be insulated, you know, from the Windows attack.

The launch of Windows 3 in 1990 killed off Apple's hopes that the Macintosh would win the gui wars.

Bill Gates
Today we're introducing Microsoft Windows version 3...

The six years' labour to produce a GUI that made IBM PCs and all the clones as easy to use as the Mac finally came up trumps. In a year Windows 3 sold close to 30 million copies, consigning the Mac to a niche in the market.

Bill Gates
Ladies and gentlemen the Windows 3 development team.

Bill Gates strategy won out. In every stage in the PC's development he joined the leading hardware company and by carving out a dominant market share for his product made his software the industry standard.

Bill Gates
You know the original PC did our evangelism in the way we created tools for that and pulled that together. Take Windows did we bet our company on that - did that come together? Virtually everything we've done, when we've first come out with it there's a lot of scepticism but most of the things we really stuck with them and despite all that second guessing we were able to pull them off.

The launch of Windows means if nothing else, that Microsoft has finally won the battle for the graphical user interface. The great ideas of Xerox Parc which were turned into a great product by Apple are going to make Bill Gates even richer - why? Well he was smart. He was persistent. He took advantage of opportunities missed by others and he made clever decisions when his competitors were making stupid ones.

John Sculley
The problem was the industry wasn't measured by who has the best selling personal computer or who has the most innovative technology. The industry was measured by who had the most open system that was adopted by the most other companies and the Microsoft strategy ultimately turned out to be the better business strategy.

Steve Jobs
The only problem with Microsoft is they just have no taste, they have absolutely no taste, and what that means is - I don't mean that in a small way I mean that in a big way. In the sense that they they don't think of original ideas and they don't bring much culture into their product ehm and you say why is that important - well you know proportionally spaced fonts come from type setting and beautiful books, that's where one gets the idea - if it weren't for the Mac they would never have that in their products and ehm so I guess I am saddened, not by Microsoft's success - I have no problem with their success, they've earned their success for the most part. I have a problem with the fact that they just make really third rate products.

Steve Ballmer
I will admit quite frankly that I think Windows today is probably four years behind, three years behind where it would have been had we not danced with IBM for so long. Because the amount of split energy, split works, split IQ in the company really cost our end customer real innovation in our product line and so whenever I hear these criticisms which I gotta to say sting eh sometimes, I say to myself just you watch, just you watch Windows 95, Windows 9...there's no lack of focus there hasn't been here for the last three or four years since we didn't have this big spot with IBM. Even in the operating systems here now, you'll start to see clear, clear...and people will recognise clear leadership.

Bill Gates
We just keep making them better. We get millions of phone calls we get to go out there and talk to customers there's nothing cast in concrete. If people decide that there's something we should change we change it, it's a lot better than most industries in that sense. I think the way that applications user interfaces have advanced over the last decade Microsoft has been at the forefront of a very high percentage of that, and you know, I think it's great stuff.

On August 24th 1995, Gates delivered the coup de grace to his software rivals. Windows 95 combines a PC's operating system and its graphical interface into one package. With a worldwide promotional campaign costing $300 million, it looks set to become the industry standard - supplanting Microsoft's old warhorse DOS. Cue the triumph of Bill. A software nerd is the richest man in the world. But even as Bill Gates bestrides the PC world like a colossus, ahead lie bigger battles, battles that will make the trouncing of the Mac and mastering the IBM PC look like a tea party. The Gates fortune was built on setting the industry standard for PC operating systems. Fine as long as PC's are stand alone boxes on your desk. But now they are being linked - into a worldwide network, the much hyped information superhighway.The PC on the internet is a mailbox, a telephone and a television.

Of course at the centre of this will be the idea of digital convergence that is taking all the information - books, art, movies and being able to provide that on demand on what the PC will have evolved into.

The Internet is the next wave of the information revolution where there is as yet no industry standard, a world where even Bill Gates seems unsure.

Bill Gates
You know, if you take the way the Internet is changing month by month, if somebody can predict what's going to happen three months from now, nine months from now even today eh my hat's off to them, I think we've got a phenomena here that is moving so rapidly that nobody knows exactly where it will go.

Bill Gates isn't resting on his laurels. He's making new alliances, like investing in Steven Spielberg's new movie studio, Dreamworks. He's in cable TV with broadcaster NBC and in competition with Rupert Murdoch and Mickey Mouse. These tycoons are a far cry from the nerds Bill has so far outsmarted - guys like Gary Kildall who became businessmen by accident. Even Bill's victory over IBM was really with a corporate outpost a long way from the attention of Big Blue Headquarters. No - Bill's new rivals are hotshots, not hippies. And one of them is the guy I'm visiting. He hopes the Internet will go somewhere other than to Bill Gates' bottom line. He's betting it will soon consign the PC itself to the trashcan - and do the same to Microsoft. Larry Ellison is the boss of Oracle, a booming business that sells software to companies who share information among hundreds of users. In Atherton, the most exclusive suburb in Silicon Valley, the bachelor billionaire has built himself a 10 million dollar samurai mansion. Naturally!

Larry Ellison
I want to have a large pond about 5 acres of water surrounded by several little buildings like a village.

With his ceremonial carp Larry contemplates the coming battle with Microsoft.

Larry Ellison
President, Oracle
People make a terrible mistake of thinking IBM is the present and Microsoft is the future and I think IBM is the past and Microsoft is the present and the future has not happened so we don't know what company, what technology is going to be dominant. These are temple guardians from the Koma Kura period ah and they you know you would have one on either side of your door and the job was to scare employees of Microsoft away and keep them from entering the Temple. We shouldn't spend all of our time wringing our hands about Microsoft you know Microsoft world domination that eh there still room enough for innovation - there's going to be change and Microsoft's future is not assured. Anything good for the Internet. Yeah IÍm very supportive of it because the Internet does not require a PC.

Larry believes the PC will be replaced with a cheap device he calls an information appliance. It will be a glorified television which will access information and computing simply by connecting to giant computers via the Internet. Just like turning on a tap - and the PC will go the way of the well and the bucket.

Larry Ellison
I hate the PC with a passion. Me going down to the store and buying Windows 95, I've got to get into my car drive down to a store buy a cardboard box full of bits you know encoded on a piece of plastic CDROM and you bring it home and read a manual install this thing - you must be kidding you know, put the stuff on the net - it's bits, don't put bits in cardboard, cardboard in trucks, trucks to stores, me go to the store, you know, pick the stuff out, it's insane. OK I love the Internet - I want information you know it flows across the wire.

So, the way ahead is wired - Larry, Bill, everybody agrees on that. And we have the nerds of the seventies to thank for making it possible, whether the PC itself survives or not. As we take up their challenge, it's worth finding out how these pioneers made out. Steve Jobs sold all his Apple stock in disgust when he was fired, but has made another fortune from his stake in a movie animation studio. He has no doubts about his contribution to humanity.

Steve Jobs
If you talk to people that use the Macintosh they love it but you don't hear people loving products very often you know really but you could feel it in there, there was something really wonderful there.

Apple, the company Jobs took from a garage to the Fortune 500 is in trouble. It is now a fading force in the PC marketplace. Apple's other millionaire founder Steve Wozniak spends much of his time teaching computing to 11 and 12 year olds. IBM created the mass market for the PC but no longer sets industry standards. And most of the guys who built IBM's first PC have left Big Blue. And Ed Roberts who built the Altair, the very first PC, he turned his back on computing and returned to his first love, medicine. Funny, isn't how things turn out? After all the first PC revolution caught us all pretty much by surprise. Even Microsoft with 2000 millionaires and at least two billionaires never expected to be as successful as they are today. Cringely's universal law says society takes 30 years to adopt new technology into daily life - the phone, movies. Even television took that long before our rear ends became couch-shaped. So far the PC has had 20 years. So what comes next? Well, I'm off to find out. See you in ten years!

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