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Documentary, The Triumph of the Nerds The Rise of Accidental Empires (1996) - Part 3 - Great Artists Steal
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00:00The story so far. In 1980, just four years after being founded in a California
00:08garage, Apple was the biggest maker of PCs in the world. Computer giant IBM was
00:14not amused and fought back, launching its own PC in 1981. Though built from
00:20copycat technology, IBM's PC was an enormous hit and spawned many imitators,
00:25the PC clones. But PCs were still a pain to use. A revolution was needed to make
00:32them friendlier. Now, view on.
00:55Music
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01:19Music
01:22Ladies and gentlemen, welcome to the launch of Windows 95.
01:31Yes, welcome Microsofties. Nice to have you all here. But now, let's welcome the
01:35chairman of Microsoft. Listen to this. This is a man, a man so successful, his
01:40chauffeur is Ross Perot, ladies and gentlemen. Please welcome Bill Gates.
01:45It's August 24th, 1995, in a suburb of Seattle in the Pacific Northwest. This is the biggest, noisiest
01:58product launch in the history of the personal computer. It's Windows 95 software and Bill Gates is the star,
02:04chairman, chief nerd and spiritual leader of Microsoft. But the truth is, this is the latest
02:10step in Bill's dream to have his software running on every PC in the world.
02:15We wanted people to be able to appreciate how Windows 95 makes computing faster, easier and more fun.
02:23And for seven years, it was a lonely, lonely crusade.
02:29Reality police.
02:31This moves the whole PC industry up to a whole new level.
02:36Wait a minute. All this publicity is so Bill Gates can claim that Windows 95 is the latest and perhaps most
02:42significant improvement in the PC since it was invented. He can say that his new operating system makes PCs
02:48nicer to look at and easier to use than ever before. They'll no longer be just for geeks and nerds.
02:53They'll be so easy to use that even my mother will want one. But you know what? Most of the ideas in Windows 95
02:59were invented 20 years ago.
03:03The 20 year journey to this software celebration hasn't been easy. It has involved huge gambles, passionate commitment,
03:13dramatic setbacks and required the occasional crushing of rivals and allies.
03:20It's the triumph of Bill Gates' commercial vision. Success in the marketplace doesn't have to come from innovation
03:26or from being the best, if you have a ruthless ability to exploit your opportunities.
03:31And the way Microsoft made the PC's graphical user interface its own is a textbook example of that ability.
03:43Time for another cringely crash course in elementary computing.
03:47In the early days of personal computing, the machines were pretty hard to use. In part that's because they were primitive,
03:53but it's also because computer guys tend to like things that are pretty hard to use.
03:57This is an IBM PC circa about 1983, and on it I've written a letter to my bank manager asking him to back one of my
04:05get-rich-quick schemes. I need to file the letter now, and let me show you how I do it.
04:10There will be a test on this. Okay, the commands are copy c colon backslash
04:19quickrich.doc space a colon backslash begging and return.
04:28Well, not very easy to do. Here's a Windows PC about 12 years newer, and we'll do exactly the same thing.
04:37I've written a document, quickrich.doc, and I put it in the begging file, and yes, I really do mean to do it, and that's it.
04:47Pictures rather than words making the PC easy and intuitive.
04:53This is called a graphical user interface, GUI, or GUI, where they come up with these names.
05:00The battle to bring GUIs to PCs and make them more user-friendly took 10 years and is a hell of a story.
05:07That's what this program is about. It's also about how Bill Gates ended up master of the GUI universe and a gazillionaire.
05:13I never said it was a fairy story.
05:18It 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.
05:31Xerox management had a sinking feeling that if people started reading computer screens instead of paper, Xerox was in trouble.
05:39Unless they could dominate the paperless office of the future.
05:45You 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, more interesting, more rewarding.
06:00And so we set to work on it.
06:03Bob Taylor ran PARC's computer science lab, and one of the first things he did was to buy beanbags for his researchers to sit on and brainstorm.
06:12These are a couple of the original beanbag chairs. The role of beanbag chair in computer science is ease of use.
06:18It was said that of the top 100 computer researchers in the world, 58 worked at PARC. Strange is the staff never exceeded 50.
06:28But Taylor gave these nerd geniuses unlimited resources and protected them from commercial pressures.
06:34It's very comfortable. Now let's see you get out of there.
06:36I feel my neural capacity already increasing. There you go. Oh, God.
06:41The atmosphere at PARC was electric. There was total intellectual freedom. There was no conventional wisdom.
06:49Almost every idea was up for challenge and got challenged regularly.
06:53The 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.
07:03People came there specifically to work on five-year programs that were their dreams.
07:10This is a computer room in the basement of the Xerox Palo Alto Research Center.
07:15About 25 years ago, they built the MAX time-sharing system in here, and now it's loaded with all sorts of other computers.
07:22And there's one that we're really interested in here. Let's see. Here it is. Let me turn on the lights.
07:31Okay. Here we have it. This is a Xerox Alto computer built around 1973.
07:39Some people would argue that this is the first personal computer.
07:42It really isn't because, for one thing, it wasn't ever for sale.
07:46And the parts alone cost about $10,000. But it has all the elements of quite a modern personal computer.
07:51And 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.
07:58And ironically, none of those things has a Xerox name on us.
08:02What's the mail this morning?
08:04This promotional film made in the mid-'70s to flaunt Xerox PARC research shows just how revolutionary the Alto was.
08:12It was friendly and intuitive.
08:14This is an experimental office system. It's in use now.
08:17It had the first GUI using a mouse to point to information on the screen.
08:21It was linked to other PCs by a system called Ethernet, the first computer network.
08:26And what you saw on the screen was precisely what you got on your laser printer.
08:31It was way ahead of its time.
08:33Thank you, Fred.
08:34Everybody wanted to make a real difference. We really thought we were changing the world.
08:37And that at the end of this project, or the set of projects, personal computing would burst on the scene exactly the way we had envisioned it.
08:48And take everybody by total surprise.
08:52But the brilliant researchers at PARC could never persuade Xerox management that their vision was accurate.
08:58Head office in New York ignored the revolutionary technologies they owned 3,000 miles away.
09:03They just didn't get it.
09:06And none of the main body of the company was prepared to accept the answers.
09:11So there was a tremendous mismatch between the management and what the researchers were doing in that these guys had never fantasized about what the future of the office was going to be.
09:23And when it was presented to them, they had no mechanisms for turning those ideas into real-life products.
09:29And that was really the frustrating part of it because you were talking to people who didn't understand the vision.
09:37And yet the vision was getting created every day within the Palo Alto Research Center.
09:42And there was no one to receive that vision.
09:44But a few miles down the road from Palo Alto was a man ready to share the vision.
09:53The most dangerous man in Silicon Valley sits in an office in this building.
09:57People love him and hate him, often at the same time.
10:00For 10 years, by sheer force of will, he made the personal computer industry follow his direction.
10:06With this guy, we're not talking about someone driven by the profit motive and a desire for an opulent retirement at the age of 40.
10:13No, we're talking holy war.
10:15We're talking rivers of blood and fields of dead martyrs to the cause of greater computing.
10:20We're talking about a guy who sees the personal computer as his tool for changing the world.
10:25We're talking about Steve Jobs.
10:27Hi, I'm Steve Jobs.
10:35When I wasn't sure what the word charisma meant, I met Steve Jobs and then I knew.
10:41Steve Jobs is on my eternal heroes list.
10:47There's nothing he can ever do to get off it.
10:50He wanted you to be great.
10:53And he wanted you to create something that was great.
10:57And he was going to make you do that.
11:03He's also obnoxious.
11:06And this comes from his high standards.
11:08He has extremely high standards and he has no patience with people who don't either share those standards or perform to them.
11:20And I'm also one of these people that I don't really care about being right.
11:25You know, I just care about success.
11:30Steve Jobs had co-founded Apple Computer in 1976.
11:35The first popular personal computer, the Apple II, was a hit and made Steve Jobs one of the biggest names in a brand new industry.
11:44At the height of Apple's early success in December 1979, Jobs, then all of 24, had a privileged invitation to visit Xerox PARC.
11:54And they showed me really three things.
11:57But I was so blinded by the first one that I didn't even really see the other two.
12:03One of the things they showed me was object-oriented programming.
12:08They showed me that.
12:09But I didn't even see that.
12:11The other one they showed me was really a networked computer system.
12:14They had over 100 Alto computers, all networked, using email, et cetera, et cetera.
12:18I didn't even see that.
12:20I was so blinded by the first thing they showed me, which was the graphical user interface.
12:26I thought it was the best thing I had ever seen in my life.
12:29Now, remember, it was very flawed.
12:31What we saw was incomplete.
12:33They'd done a bunch of things wrong.
12:35But we didn't know that at the time.
12:36It's still, though, they had the germ of the idea was there and they'd done it very well.
12:41And within, you know, 10 minutes, it was obvious to me that all computers would work like this someday.
12:51It was a turning point.
12:53Jobs decided this was the way forward for Apple.
12:56He came back and, I almost said ask, but the truth is, demanded that his entire programming team get a demo of the Smalltalk system.
13:08And the then head of the Science Center asked me to give the demo because Steve specifically asked for me to give the demo.
13:17And I said, no way.
13:19I had a big argument with the Xerox executives telling them that they were about to give away the kitchen sink.
13:27And I said I would only do it if I were ordered to do it because then, of course, it would be their responsibility.
13:34And that's what they did.
13:36The mouse is a pointing device that moves a cursor around the display screen.
13:41Adele and her colleagues showed the Apple programmers an Alto machine running a graphical user interface.
13:48A selected window displays above other windows, much like placing a piece of paper on top of a stack on a desk.
13:55The 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.
14:04Choose one.
14:06I think mostly what we got in that hour and a half was inspiration and basically just sort of a bolstering of our convictions that a more graphical way to do things would make this business computer more accessible.
14:25After an hour looking at demos, they understood our technology and what it meant more than any Xerox executive understood it after years of showing it to them.
14:34Basically, they were copier heads that just had no clue about a computer or what it could do.
14:39And so they just grabbed, uh, grabbed defeat from the greatest victory in the computer industry.
14:45Xerox could have owned the entire computer industry today.
14:48Um, could have been, you know, a company ten times its size.
14:52Could have been IBM.
14:53Could have been the IBM of the nineties.
14:55Could have been the Microsoft of the nineties.
14:56For Steve Jobs, the road to Damascus passed through Palo Alto.
15:01He persuaded the Apple board to invest in technology copying what he'd seen at Xerox PARC, his instrument of change.
15:08They hired a hundred engineers and started developing a new PC codenamed LISA.
15:13But there were problems.
15:14The LISA didn't work properly and its price tag was heading toward $10,000.
15:19Way too much for the average PC buyer.
15:22Jobs' domineering style drove everyone nuts too.
15:26So the board ousted him from his own pet project.
15:29You know, I, I brooded for a few months.
15:31But it, it was, it was not very long after that that it really occurred to me that if we didn't do something here,
15:38the Apple II was running out of gas.
15:41And we needed to do something with this technology fast or else Apple might cease to exist as the company that it was.
15:49Jobs got his answer from Jeff Raskin, Apple employee number 31.
15:55Raskin's idea was a $600 computer, as easy to use as a toaster, codenamed Macintosh, after America's favorite Apple.
16:04Jobs liked the price, but not Raskin's design ideas.
16:08So Steve took over the Macintosh project, determined to make it a cheaper LISA.
16:13And so I formed a small team to do the Macintosh.
16:17And, you know, we, we were on a mission from God, you know, to save Apple.
16:22While Jobs pursued his Mac mission, he needed a more orthodox chief executive to run the company.
16:28A respectable face who could sell to corporate America.
16:31He chose Pepsi Cola executive John Scully.
16:34Scully refused.
16:36Leave Pepsi for a four-year-old company that had been set up in a garage?
16:40Are you serious?
16:41But it was hard saying no to Steve Jobs.
16:44And then he looked up at me and just stared at me with this stare that only Steve Jobs has.
16:51And he said, do you want to sell sugar water for the rest of your life?
16:56Or do you want to come with me and change the world?
17:00And I just gulped.
17:02Because I knew I would wonder for the rest of my life, you know, what I would have missed.
17:08Yeah.
17:09Well, or you...
17:10For the young Mac team, average age 21, this was the start of the toughest but most exhilarating assignment of their lives.
17:17Relentlessly driven by Jobs' ego.
17:21Oh, look at this.
17:22And who's this fresh-faced young guy here?
17:24That's me 11 years ago.
17:26Had more hair, I guess.
17:28A little thinner.
17:29Oh, I love these people.
17:31They're like family to me, really.
17:34And we were united by this common bond of trying to do this incredible thing with the Mac.
17:39Jobs wanted the Mac to revolutionize the PC market.
17:43So he insisted that the team deliver perfection.
17:47Steve was upset that the Mac took too long to boot, to boot up when you first turned it on.
17:52So he tried motivating Larry Kenyon by telling him, well, you know how many millions of people are going to buy this machine?
17:58There's going to be millions of people.
18:00And let's imagine that you can make it boot five seconds faster.
18:04Well, that's five seconds times a million every day.
18:07That's 50 lifetimes.
18:09If you can shave five seconds off that, you're saving 50 lives.
18:15And so, you know, it was a nice way of thinking about it.
18:18And we did get it to go faster.
18:20And then this is one of the very first Macintosh wire wraps.
18:24This is wire wrap board number four.
18:26As the Mac progressed, new features were being continually added.
18:30Jobs said the Mac had to be insanely great and pushed his engineers to the limit.
18:35He had to because by early 1983, Apple was in trouble.
18:42And this is what was giving Apple such a headache.
18:45IBM's first PC launched in August 1981.
18:48It was a runaway success.
18:49Within a couple of years, more than two million units had been shipped, overtaking Apple and making Big Blue the biggest player in the market.
18:58When IBM personal computer owners look for good software, where can they turn?
19:04To IBM.
19:05What was driving IBM PC sales was software.
19:09Business programs, entertainment, productivity, education.
19:13But software for an IBM wouldn't run on the Mac.
19:16If the Macintosh was to succeed, Jobs needed killer applications.
19:21Enter 25-year-old software supremo, Bill Gates.
19:26At that time, his company, Microsoft, had 100 workers and was growing like crazy,
19:31thanks to DOS, the operating system that drove the IBM PC.
19:35But DOS sure wasn't a GUI.
19:38Gates and his aggressive number two, Steve Ballmer, were immediately intrigued by the Mac.
19:43Jobs talked to Bill at some industry conference and said,
19:46hey, we're doing, I think Lisa was sort of in development.
19:49He said, but I'm going to do the graphical interface machine here at Apple.
19:53Not just that Lisa thing, Bill.
19:55I'm going to do the one, the one that's really going to be the winner.
19:59While the Mac was being developed, Jobs staged an event, a parody of a TV game show,
20:05to whip up enthusiasm among software developers.
20:08And now, ladies and gentlemen, the Macintosh software dating game.
20:12Jobs got the three top software bosses of the time to sing the Mac's praises.
20:17One of them was Bill Gates.
20:19Steve didn't realize he was opening the door to the man who'd proved to be Apple's main rival.
20:24When was your first date with Macintosh?
20:28We've been working with the Mac for almost two years now.
20:32And we put some of our really good people on it.
20:35Even before we finished our work on the IBM PC,
20:40Steve Jobs came and talked about what he wanted to do.
20:44That he thought he could do sort of a lease a bit cheaper.
20:48We said, boy, we'd love to help out.
20:50The lease had all its own applications.
20:52But, of course, they required a lot of memory.
20:54And we thought we could do better.
20:56And so Steve signed a deal with us to actually provide bundled applications for the first Mac.
21:02And so we were big believers in the Mac and what Steve was doing there.
21:07Most people don't remember, but until the Mac, Microsoft was not in the applications business.
21:12It was dominated by Lotus.
21:14And Microsoft took a big gamble to write for the Mac.
21:17And so we got started in early 1982 on our Macintosh software effort.
21:25And I think at that point in time, you know, it really clicked with Bill that, you know,
21:30graphic user interface was going to be the way of the future.
21:34But while Bill was having his own gooey revelation, Jobs believed that Apple's true enemy was IBM.
21:43Will Big Blue dominate the entire computer industry?
21:47The entire information age?
21:51Was George Orwell right about 1984?
21:56Despite Steve Jobs' showmanship, the IBM PC was hurting Apple's business.
22:01And most pundits considered that Apple was going to be out of business.
22:07You know, in a few short months, Business Week ran an article on their cover saying it's over, IBM has won.
22:16The Mac team saw themselves as Apple's pirates.
22:20But the gang was now being called on to save the ship as the Apple II was losing precious market share.
22:26In the case of the Macintosh team, they were behind schedule in getting the Mac out, which is not unusual in high technology.
22:35And so just getting that product to market was extremely important.
22:45After many delays, a date for the launch of the Mac was announced.
22:49The pressure of the deadline was mounting, but Steve was still a perfectionist.
22:54No design issue was too small and it was never too late to do it right.
23:00It was a pressure cooker.
23:01We were working until we finished.
23:03We couldn't go to sleep or anything.
23:05I was up for three days before in that very last push.
23:08And finally, just the stars aligned and the last release we made at 6 a.m. that morning.
23:15It was now all or nothing because Lisa had turned out an expensive flop.
23:28The fate of the whole company seemed to rest on the launch of the Mac.
23:31John Scully had even authorized a $15 million advertising campaign to coincide with the Mac's public unveiling, January 24, 1984.
23:41I remember how nervous Steve was before the introduction of the Macintosh.
23:48And the rehearsal the night before was a total disaster.
23:53Nothing seemed to go right.
23:55Steve was upset at everybody.
23:57We wondered how in the world we were ever going to get through the introduction the following day.
24:01But when that moment came, Steve was a master showman.
24:10There have only been two milestone products in our industry.
24:15The Apple II in 1977 and the IBM PC in 1981.
24:22Today, one year after Lisa, we are introducing the third industry milestone product, Macintosh.
24:33Many of us have been working on Macintosh for over two years now.
24:37And it has turned out insanely great.
24:42You've just seen some pictures of Macintosh.
24:45Now I'd like to show you Macintosh in person.
25:09The Macintosh was undoubtedly the first affordable personal computer with a genuine graphical user interface.
25:15It was also the first computer to be a monument to one man's ego.
25:21Forget the brilliant work done at Xerox PARC and the innovations borrowed from the Lisa.
25:26On the day, only one man was claiming paternity for the Mac.
25:30So it is with considerable pride that I introduce a man who's been like a father to me, Steve Jobs.
25:44I was standing off stage.
25:46And as he came off, he said, this is the proudest, happiest moment of my life.
25:50And it was all over his face.
25:52It clearly was.
25:53Because he had launched a revolution.
25:55Ultimately, it comes down to taste.
26:05It comes down to trying to expose yourself to the best things that humans have done.
26:11And then try to bring those things in to what you're doing.
26:15I mean, Picasso had a saying.
26:17He said, good artists copy, great artists steal.
26:20And we have, you know, always been shameless about stealing great ideas.
26:27And 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,
26:40who also happened to be the best computer scientists in the world.
26:44With delusions of grandeur running rampant, Apple created a Hollywood style TV commercial.
26:52It symbolized how the friendly Mac would free us from the Orwellian tyranny of clunky IBM PCs.
26:58Please.
27:00One win, one resolve, one cause.
27:05Despite the hype, by late 1984, the Mac sales were disastrous.
27:10Oh, God.
27:12We shall prevail.
27:15This is a highly sophisticated office computer.
27:21In ad after ad, Apple desperately pointed out that the Mac was far easier to use than the IBM PC.
27:27But it sold for $2,500, a thousand more than the IBM.
27:32And despite Jobs' best efforts in recruiting software makers like Bill Gates, applications were scarce.
27:40It didn't do very much.
27:41We had Mac Paint and MacWrite were our only applications.
27:45And the market started to figure this out.
27:49By 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,
28:00but it actually does something which we want to be able to do, spreadsheets, word processing, and database.
28:05And so we started to see the sales of the Mac tail off towards the end of 1984.
28:10And that became a problem the following year.
28:17Cringely's third law of personal computing was right again.
28:21To succeed, a PC must have an application which alone justifies buying the whole box.
28:27The IBM PC had Lotus 1-2-3.
28:29The Mac needed its killer application.
28:32Whizzywig, another bunch of initials from the world of the nerds.
28:38What you see is what you get.
28:40So what's the big deal?
28:41Well, it turns out that it's very hard to print on paper exactly the same image that you see on the computer screen.
28:48Eighty percent of our brain is devoted to processing visual data, but that's not the same for computers.
28:54I've been here writing a letter to my mom, and I'm signing it Bob in 72-point times Roman italic type, as befitting myself.
29:04And when I tell it to print, what comes out is a Bob, but certainly not the Bob that I'd intended.
29:11Until someone invented a way to print exactly what was on the screen, GUI would be, well, a lot of hooey.
29:19Apple's problem was the dot matrix printer.
29:23It gave everything a typewriter quality.
29:26But salvation was at hand, and once again, it owed a lot to Xerox PARC.
29:31One 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.
29:41He started a company called Adobe to market his invention.
29:46And what we had figured out how to do that no one else had figured out how to do is drive laser printers.
29:51Within two or three weeks, we had canceled our internal project.
29:55A bunch of people wanted to kill me over this, but we did it.
29:58And I had cut a deal with Adobe to use their software, and we bought 19.9% of Adobe at Apple.
30:05The investment paid off.
30:20The power of precise laser printed images and a user friendly GUI gave birth to a brand new business, desktop publishing.
30:27The spreadsheet had made us all accountants.
30:32Now, using breakthrough software, we could create fancy artwork, snappy looking notepaper, even counterfeit money.
30:39The Mac had found its killer application and would soon become the PC of choice for any creative business.
30:47It changed my life.
30:49Just that one, that one instant when I picked up the most.
30:54My whole, my whole life changed to building a career as a computer artist.
30:58God, that felt good.
31:00The success of desktop publishing came too late for Apple's founder.
31:05In 1985, Mac sales were still flat, but Jobs refused to believe the numbers.
31:10He simply behaved as if the Mac was a hot seller from the start.
31:14The 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.
31:23And the truth of what the product was doing was not horrible.
31:26It was salvageable.
31:27But the gap between the two was just so unthinkable that somebody had to do something, and that somebody was John Scully.
31:35John Scully, whom Jobs saw as his own creation, presented the board with his strategy to save the company.
31:41The plan did not include Steve Jobs.
31:45The board had to make a choice, and I said, look, it's Steve's company.
31:50I was brought in here to help, you know.
31:53If you want him to run it, that's fine with me.
31:56But, you know, we've got to at least decide what we're going to do, and everyone's got to get behind it.
32:01But he took it as a personal attack, started attacking Scully, which, you know, backed himself into a corner,
32:09because he was sure that the board would support him and not Scully.
32:12And 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.
32:24Um, what can I say? I hired the wrong guy.
32:31That was Scully?
32:33Yeah.
32:34And, uh, he destroyed everything I'd spent ten years working for.
32:40Um, starting with me, but that wasn't the saddest part.
32:45Uh, I would have gladly left Apple if Apple would have turned out like I'd wanted it to.
32:51People in the company had very mixed feelings about it.
32:54Everyone had been terrorized by Steve Jobs at some point or another, and so there was a certain relief that the terrorist would be gone.
33:02And on the other hand, I think there was incredible respect for Steve Jobs by the very same people.
33:07And we were all very worried what would happen to this company without the visionary, without the founder, without the charisma.
33:14Uh, Apple never recovered from losing Steve.
33:17Steve was the heart and soul and driving force.
33:20It would be quite a different place today.
33:22Uh, they lost their, uh, their soul.
33:36The years after Steve Jobs left were the most profitable for Apple Computer.
33:41Apple people worked hard, they played hard.
33:43They made the computer business look like a beach party.
33:46And with a median age of 27, the company was very sexy, too.
33:49Maybe too sexy.
33:50There was so much sleeping around that they came up with a travel policy back then,
33:54that men would share rooms with other men on the road and women with other women, just to settle it down a bit.
33:59They applied the California lifestyle to the computer industry, and the computer industry would never be the same again.
34:05Leading the forces of freedom is Macintosh.
34:10In 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.
34:20We'll fight them in the office, and the classroom, and the desktop, with superior weapons.
34:28With improvements to the hardware and the boom in desktop publishing, Mac production went into overdrive.
34:34By 1987, Apple was selling a million a year, IBM numbers.
34:39Let's go get them.
34:46The Mac minted money. Half its $2,000 price was pure profit.
34:58Hello, I am Macintosh.
35:01Apple arrogantly assumed their stuff was so good, consumers would always pay a premium for it.
35:07Big mistake.
35:11The Mac really ought to have won the battle for the desktop.
35:14Okay, it was more expensive than an IBM PC.
35:17But if what you wanted was a friendly, easy-to-use system, and surely everyone wanted that,
35:22then this was the only game in town.
35:24At least that's what the boys at Apple thought.
35:26But they weren't reckoning on one man, Bill Gates.
35:29Gates saw that the Mac's GUI represented a long-term threat to Microsoft's money machine,
35:35to DOS, the clunky operating system that sat inside every IBM PC.
35:40So Bill had his boys create a GUI that sat on top of DOS, rather like building a fancy facade on an old building.
35:47They called it Windows, and it wasn't much at first, but it was good enough to defend the DOS franchise.
35:53February or March of 1984, which was just right after the Apple Macintosh had been introduced.
36:00And at that point in time, we were firmly convinced that we needed to bet on graphic user interface,
36:06first with the Macintosh and then with Windows.
36:10At Microsoft, it was a long and often frustrating struggle to find a GUI solution that challenged the Mac.
36:19I know the feeling.
36:28For years, teams of Microsofties slaved in their windowless offices to build Windows,
36:33refreshed by an endless supply of free sodas.
36:37I mean, I was the development manager for Windows 1.0.
36:41And, you know, we kept slogging and slogging.
36:44And, yeah, it took us, I don't know, about seven versions.
36:46But it took us a few versions to get things right before 1990.
36:49That's right.
36:51Windows may at first have been a joke compared to the Mac.
36:54But Gates is persistent.
36:56Slowly, it got better.
36:57And the guys at Apple got worried.
37:00As each new feature appeared on the Windows GUI,
37:02the more they thought Microsoft was copying the features on the Mac.
37:06So, finally, they sued Microsoft,
37:09accusing them in a long legal battle of stealing the look and feel of Apple's GUI.
37:16The look and feel, which is how it looks, the experience of using it,
37:22was not patentable, but it was copyrightable.
37:25But there was no precedent law.
37:27This was going to be a precedent-setting case.
37:29But it was a period of five years where, you know, Microsoft,
37:34our whole strategy would have been ruined because Windows was very important to us.
37:40They weren't going to change anything.
37:42And they were going to get us to cave in or take us all the way to the Supreme Court on this thing.
37:51We assumed that the lawyers, the judges would all come to the right conclusion,
37:57which eventually they did.
37:59And Apple lost.
38:00But in that period of about six years that this case was going on,
38:07it may have lulled us into a bit of complacency,
38:12thinking that we were going to be insulated, you know, from the Windows attack.
38:18The launch of Windows 3 in 1990 killed off Apple's hopes that the Macintosh would win the GUI wars.
38:35Today we're introducing Microsoft Windows version 3.
38:40The six-year labor to produce a GUI that made IBM PCs and all the clones as easy to use as the Mac,
38:47finally came up trumps.
38:49In a year, Windows 3 sold close to 30 million copies, consigning the Mac to a niche in the market.
38:55Ladies and gentlemen, the Windows 3 development team.
38:59Bill Gates' strategy won out.
39:04At every stage in the PC's development, he joined the leading hardware company
39:08and by carving out a dominant market share for his product, made his software the industry standard.
39:14You know, the original PC did our evangelism and the way we created tools for that,
39:20you know, pull that together.
39:22Take Windows, did we bet our company on that? Did that come together?
39:25Virtually everything we've done when we first come out with it, there's a lot of skepticism.
39:30But most of the things, we really stuck with them and despite all that second-guessing,
39:37we're able to pull them off.
39:38The problem was the industry wasn't measured by who has the best-selling personal computer
39:43or who has the most innovative technology.
39:46The industry was measured by who had the most open system that was adopted by the most other companies.
39:53And the Microsoft strategy ultimately turned out to be the better business strategy.
39:58The only problem with Microsoft is they just have no taste.
40:01They have absolutely no taste.
40:03And what that means is, I don't mean that in a small way, I mean that in a big way,
40:08in the sense that they don't think of original ideas and they don't bring much culture into their product.
40:22And you say, well, why is that important?
40:24Well, you know, proportionally spaced fonts come from typesetting and beautiful books.
40:28That's where one gets the idea.
40:30If it weren't for the Mac, they would never have that in their products.
40:33And so I guess I am saddened, not by Microsoft's success.
40:42I have no problem with their success.
40:44They've earned their success for the most part.
40:47I have a problem with the fact that they just make really third-rate products.
40:52I will admit, quite frankly, that I think Windows today is probably four years ago
40:58three years behind where it would have been had we not danced with IBM for so long.
41:05Because the amount of split energy, split work, split IQ in the company
41:10really cost our end customer real innovation in our product line.
41:15And so whenever I hear these criticisms, which I've got to say sting sometimes,
41:21I say to myself, just you watch, just you watch Windows 95, Windows 90.
41:26There's no lack of focus.
41:27There hasn't been here for the last three, four years since we didn't have this big split with IBM.
41:32And I think even in the operating systems area, now you'll start to see clear, clear,
41:38and people will recognize clear leadership.
41:41And we just keep making them better.
41:43We get millions of phone calls.
41:45We get to go out there and talk to customers.
41:48And there's nothing cast in concrete.
41:50If people decide there's something that we should change, we change it.
41:54It's a lot better than most industries in that sense.
41:57I think the way that applications user interfaces have advanced over the last decade,
42:02Microsoft has been at the forefront of a very high percentage of that.
42:07And, you know, I think it's great stuff.
42:14On August 24th, 1995, Gates delivered the coup de grace to his software rivals.
42:20Windows 95 combines the PC's operating system and its graphical interface into one package.
42:26With a worldwide promotional campaign costing $300 million,
42:30it looks set to become the industry standard, supplanting Microsoft's old warhorse, DOS.
42:36Thanks, thanks all of you for an incredible job.
42:40Cue the triumph of Bill.
42:42A software nerd is the richest man in the world.
42:49But even as Bill Gates bestrides the PC world like a colossus, ahead lie bigger battles.
42:55Battles that will make the trouncing of the Mac and mastering the IBM PC look like a tea party.
43:06The Gates fortune was built on setting the industry standard for PC operating systems.
43:12Fine as long as PCs are stand-alone boxes on your desk.
43:17But now they are being linked into a worldwide network, the much-hyped information superhighway.
43:24The PC on the Internet is a mailbox, a telephone, and a television.
43:28Of course, at the center of this will be the idea of digital convergence.
43:33That is, taking all the information, books, art, movies, and being able to provide them on demand on what the PC will evolve into.
43:44The 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.
43:53You 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, my hat's off to them.
44:03I think we've got a phenomena here that is moving so rapidly that nobody knows exactly where it will go.
44:13Bill Gates isn't resting on his laurels. He's making new alliances, like investing in Steven Spielberg's new movie studio, DreamWorks.
44:22It would be silly if we were going to get into the interactive business.
44:25He's in cable TV with broadcaster NBC and in competition with Rupert Murdoch and Mickey Mouse.
44:32These tycoons are a far cry from the nerds Bill has so far outsmarted.
44:37Guys like Gary Kildall, who became businessmen by accident.
44:41Even Bill's victory over IBM was really with a corporate outpost a long way from the attention of big blue headquarters.
44:52No, Bill's new rivals are hotshots, not hippies. And one of them is the guy I'm visiting.
44:58He hopes the internet will go somewhere other than to Bill Gates' bottom line.
45:02He's betting it will soon consign the PC itself to the trash can and do the same to Microsoft.
45:08Bob Grinchley to see Larry Ellison.
45:10Larry Ellison is the boss of Oracle, a booming business that sells software to companies who share information among hundreds of users.
45:27This is my favorite fish is Halloween fish.
45:29In Atherton, the most exclusive suburb in Silicon Valley, the bachelor billionaire has built himself a $10 million samurai mansion, naturally.
45:38I want to have a large pond with five acres of water surrounded by several little buildings, like a village.
45:44Oh.
45:45With his ceremonial car, Larry contemplates the coming battle with Microsoft.
45:50People make a terrible mistake of thinking IBM is the present and Microsoft is the future.
45:54I 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.
46:01These are temple guardians from the Kamakura period and they, you know, you'd 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.
46:15We shouldn't spend all of our time wringing our hands about, you know, Microsoft, you know, Microsoft world domination, that there's still room left for innovation.
46:25There's going to be change and Microsoft's future is not assured.
46:29Well, anything good for the internet, you know, we're very supportive of it because the internet does not require a PC.
46:35Larry believes the PC will be replaced with a cheap device he calls an information appliance.
46:41It will be a glorified television which will access information and computing simply by connecting to giant computers via the internet.
46:48Just like turning on a tap and the PC will go the way of the well and the bucket.
46:54I hate the PC with a passion.
46:57Me going down to the store and buying Windows 95, I got to get in my car, drive down to a store, buy a cardboard box full of bits, you know, encoded on a piece of plastic, a CD-ROM, bring it home, read a manual and install this thing.
47:11You must be kidding.
47:12You know, put the stuff on the net.
47:15It's bits.
47:16Don't put bits in cardboard, cardboard in trucks, trucks to stores.
47:20Me, you know, me go to the store, you know, pick this stuff out.
47:23It's insane.
47:24Okay.
47:25I love the internet.
47:27I want information.
47:28You know, it comes, it flows across the wire.
47:31The wire.
47:32So the way ahead is wire.
47:35Larry, Bill, everybody agrees on that.
47:38And we have the nerds of the 70s to thank for making it possible, whether the PC itself survives or not.
47:44As we take up their challenge, it's worth finding out how these pioneers made out.
47:49Steve 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.
47:58He has no doubts about his contribution to humanity.
48:01If you talk to people that use the Macintosh, they love it.
48:05I mean, you don't hear people loving products very often.
48:09You know, really.
48:10But you could feel it in there.
48:12There was something really wonderful there.
48:14Apple, the company Jobs took from a garage to the Fortune 500, is in trouble.
48:20It is now a fading force in the PC marketplace.
48:25Apple's other millionaire founder, Steve Wozniak, spends much of his time teaching computing,
48:30to 11- and 12-year-olds.
48:35IBM created the mass market for the PC, but no longer sets industry standards.
48:43And most of the guys who built IBM's first PC have left Big Blue.
48:50And Ed Roberts, who built the Altair, the very first PC,
48:56he turned his back on computing and returned to his first love,
48:59medicine.
49:02Funny, isn't it, how things turn out?
49:05After all, the first PC revolution caught us all pretty much by surprise.
49:09Even Microsoft, with 2,000 millionaires and at least 2 billionaires,
49:13never expected to be as successful as they are today.
49:15Cringely's Universal Law says society takes 30 years to adapt new technology into daily life.
49:24The phone, movies, even television took that long before our rear ends became couch-shaped.
49:30So far, the PC has had 20 years.
49:32So what comes next?
49:34Well, I'm off to find out.
49:36See you in 10 years.
49:37See you in 10 years.
49:42I'll see you in 10 years.
49:43Oh, my God.
50:13Oh, my God.
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