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Triumph of the Nerds
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00:01The story so far.
00:03In 1980, just four years after being founded in a California garage,
00:08Apple was the biggest maker of PCs in the world.
00:12Computer giant IBM was not amused and fought back, launching its own PC in 1981.
00:19Though built from copycat technology, IBM's PC was an enormous hit and spawned many imitators, the PC clones.
00:27But PCs were still a pain to use.
00:30A revolution was needed to make them friendlier.
00:33Now, view on.
01:24Ladies and gentlemen, welcome.
01:26Welcome to the launch of Windows 95.
01:31Yes, welcome Microsofties.
01:33Nice to have you all here.
01:35But now, let's welcome the chairman of Microsoft.
01:37Listen to this.
01:37This is a man, a man so successful, his chauffeur is Ross Perot, ladies and gentlemen.
01:44Please welcome Bill Gates.
01:51It's August 24th, 1995, in a suburb of Seattle in the Pacific Northwest.
01:57This is the biggest, noisiest product launch in the history of the personal computer.
02:01It's Windows 95 software, and Bill Gates is the star, chairman, chief nerd, and spiritual leader of Microsoft.
02:08But the truth is, this is the latest step in Bill's dream to have his software running on every PC
02:15in the world.
02:16We wanted people to be able to appreciate how Windows 95 makes computing faster, easier, and more fun.
02:25And for seven years, it was a lonely, lonely crusade.
02:30Reality police.
02:32This moves the whole PC industry up to a whole new level.
02:36Wait a minute.
02:38All this publicity is so Bill Gates can claim that Windows 95 is the latest and perhaps most significant improvement
02:43in the PC since it was invented.
02:46He can say that his new operating system makes PCs nicer to look at and easier to use than ever
02:51before.
02:51They'll no longer be just for geeks and nerds.
02:54They'll be so easy to use that even my mother will want one.
02:57But you know what?
02:58Most of the ideas in Windows 95 were invented 20 years ago.
03:06The 20-year journey to this software celebration hasn't been easy.
03:10It has involved huge gambles, passionate commitment, dramatic setbacks, and required the occasional crushing of rivals and allies.
03:20It's the triumph of Bill Gates' commercial vision.
03:23Success in the marketplace doesn't have to come from innovation or from being the best, if you have a ruthless
03:29ability to exploit your opportunities.
03:32And 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.
03:51In 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
04:04him to back one of my get-rich-quick schemes.
04:06I need to file the letter now, and let me show you how I do it.
04:10There will be a test on this.
04:12Okay, the commands are copy c colon backslash quick-rich.doc space a colon backslash begging and return.
04:30Well, not very easy to do.
04:33Here's a Windows PC about 12 years newer, and we'll do exactly the same thing.
04:37I've written a document, quick-rich.doc, and I put it in the begging file, and yes, I really do
04:46mean to do it, and that's it.
04:49Pictures 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
05:06of a story.
05:07That's what this program is about.
05:09It'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.
05:17It all began in 1971 in Palo Alto, just south of San Francisco, when Xerox, the copier company, set up
05:26the 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.
05:40Unless 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,
05:53more enjoyable, a lot more enjoyable, more interesting, more rewarding.
06:01And 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
06:09his researchers to sit on and brainstorm.
06:11These are a couple of the original beanbag chairs.
06:14The role of the beanbag chair in computer science is ease of use.
06:18Okay.
06:19It was said that of the top 100 computer researchers in the world, 58 worked at PARC.
06:25Strange is the staff never exceeded 50.
06:27You didn't get your butt low enough.
06:28But Taylor gave these nerd geniuses unlimited resources and protected them from commercial pressures.
06:34It's very comfortable.
06:35Yeah, let's see you get out of here.
06:36I feel my neural capacity already increasing.
06:39There you go.
06:39Oh, God.
06:41The atmosphere at PARC was electric.
06:44There was total intellectual freedom.
06:46There was no conventional wisdom.
06:49Almost every idea was up for challenge and got challenged regularly.
06:52The management said, go create the new world.
06:56We don't understand it.
06:58Here 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.
07:11This is a computer room in the basement of the Xerox Palo Alto Research Center.
07:16About 25 years ago, they built the Max timesharing system in here,
07:19and now it's loaded with all sorts of other computers.
07:23And there's one that we're really interested in here.
07:27Let's see.
07:28Here it is.
07:29Let me turn on the lights.
07:32Okay.
07:33Here we have it.
07:34This is a Xerox Alto computer built around 1973.
07:39Some people would argue that this is the first personal computer.
07:43It really isn't because, for one thing, it wasn't ever for sale,
07:46and the parts alone cost about $10,000.
07:48But it has all the elements of quite a modern personal computer.
07:52And without it, we wouldn't have the Macintosh.
07:54We wouldn't have Windows.
07:55We wouldn't have most of the things we value in computing today.
07:58And ironically, none of those things has a Xerox name on it.
08:02What's the mail this morning?
08:04This promotional film made in the mid-'70s to flaunt Xerox PARC research
08:08shows just how revolutionary the Alto was.
08:11It was friendly and intuitive.
08:14This is an experimental office system.
08:16It'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,
08:24the 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.
08:35We really thought we were changing the world.
08:37And that at the end of this project, or the set of projects,
08:44personal 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
08:57that their vision was accurate.
08:58Head office in New York ignored the revolutionary technologies they owned 3,000 miles away.
09:04They just didn't get it.
09:06And none of the main body of the company was prepared to accept the answers.
09:12So there was a tremendous mismatch between the management and what the researchers were doing
09:18in 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,
09:24they had no mechanisms for turning those ideas into real-life products.
09:29And that was really the frustrating part of it
09:34because 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.
09:47But 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,
10:03he made the personal computer industry follow his direction.
10:06With this guy, we're not talking about someone driven by the profit motive
10:10and 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.
10:26We're talking about Steve Jobs.
10:34Hi, I'm Steve Jobs.
10:36When I wasn't sure what the word charisma meant, I met Steve Jobs, and then I knew.
10:45Steve Jobs is on my eternal heroes list.
10:48There's nothing he can ever do to get off it.
10:49He wanted you to be great.
10:54And 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.
11:09He has extremely high standards,
11:10and 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.
11:24You 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,
11:39and 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,
11:49Jobs, then all of 24, had a privileged invitation to visit Xerox PARC.
11:54And they showed me, really, three things.
11:58But I was so blinded by the first one that I didn't even really see the other two.
12:05One of the things they showed me was object-oriented programming.
12:08They showed me that, but 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, etc., etc.
12:19I didn't even see that.
12:21I 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.
12:32What 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.
12:43And 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 asked, but the truth is demanded that his entire programming team get a
13:06demo of the small talk system.
13:09And the then head of the science center asked me to give the demo because Steve specifically asked for me
13:16to give the demo.
13:17And I said, no way.
13:18I had a big argument with the Xerox executives telling them that they were about to give away the kitchen
13:26sink.
13:28And I said, I would only do it if I were ordered to do it, because then, of course, it
13:33would 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
13:54a desk.
13:54The visitors from Apple saw a computer that was designed to be easy to use, a machine that anybody could
14:01operate and find friendly, even the French.
14:06I think mostly what we got in that hour and a half was inspiration.
14:12And basically just sort of a bolstering of our convictions that a more graphical way to do things would make
14:22this 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
14:32it 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 defeat from the greatest victory in the computer industry.
14:46Xerox could have owned the entire computer industry today.
14:50Could have been, you know, a company ten times its size.
14:52Could have been IBM.
14:54Could have been the IBM of the 90s.
14:55Could have been the Microsoft of the 90s.
14:57For 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.
15:15The Lisa didn't work properly and its price tag was heading toward $10,000.
15:20Way too much for the average PC buyer.
15:23Jobs' domineering style drove everyone nuts, too.
15:27So the board ousted him from his own pet project.
15:30You know, I brooded for a few months.
15:32But it was not very long after that that it really occurred to me that if we didn't do something
15:38here,
15:39the 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
15:48that it was.
15:51Jobs got his answer from Jeff Raskin, Apple employee number 31.
15:56Raskin's idea was a $600 computer, as easy to use as a toaster, codenamed Macintosh, after America's favorite Apple.
16:05Jobs liked the price, but not Raskin's design ideas.
16:09So 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, and, you know, we were on a mission from
16:20God, you know, to save Apple.
16:23While Jobs pursued his Mac mission, he needed a more orthodox chief executive to run the company,
16:29a respectable face who could sell to corporate America.
16:32He chose Pepsi-Cola executive John Scully.
16:35Scully refused.
16:37Leave Pepsi for a four-year-old company that had been set up in a garage?
16:40Are you serious?
16:42But it was hard saying no to Steve Jobs.
16:46And then he looked up at me and just stared at me with this stare that only Steve Jobs has.
16:52And he said, do you want to sell sugar water for the rest of your life?
16:57Or do you want to come with me and change the world?
17:01And I just gulped, because I knew I would wonder for the rest of my life, you know, what I
17:07would have missed.
17:08Yeah.
17:09Well, or usually...
17:10For the young Mac team, average age 21, this was the start of the toughest but most exhilarating assignment of
17:17their lives,
17:18relentlessly 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. Had more hair, I guess. A little thinner.
17:30Oh, I love these people. They'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.
17:40Jobs 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
17:57buy 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.
18:10If 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.
18:50Within a couple of years, more than two million units had been shipped,
18:53overtaking 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, I'm going to do the one, the one that's really going to be the
19:58winner.
20:00While 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.
20:13Jobs 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.
20:25When was your first date with Macintosh?
20:29We've been working with the Mac for almost two years now.
20:33And we put some of our really good people on it.
20:36And even before we finished our work on the IBM PC, Steve Jobs came and talked about what he wanted
20:45to do,
20:46that he thought he could do sort of a lease a bit cheaper.
20:49We said, boy, we'd love to help out.
20:51The lease had all its own applications, but of course they required a lot of memory,
20:55and we thought we could do better.
20:57And so Steve signed a deal with us to actually provide bundled applications for the first Mac.
21:03And so we were big believers in the Mac and what Steve was doing there.
21:09Most people don't remember, but until the Mac, Microsoft was not in the applications business.
21:13It 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.
21:26And 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.
21:35But while Bill was having his own GUI revelation, Jobs believed that Apple's true enemy was IBM.
21:42Will Big Blue dominate the entire computer industry?
21:47The entire information age was George Orwell Wright about 1984.
21:56Despite Steve Jobs' showmanship, the IBM PC was hurting Apple's business.
22:02And most pundits considered that Apple was going to be out of business.
22:08You know, in a few short months, Business Week ran an article on their cover saying it's over, IBM has
22:14won.
22:17The Mac team saw themselves as Apple's pirates, but the gang was now being called on to save the ship
22:23as the Apple II was losing precious market share.
22:27In the case of the Macintosh team, they were behind schedule in getting the Mac out, which is not unusual
22:34in high technology.
22:37And 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.
23:02We were working until we finished.
23:04We 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.
23:12And the last release we made at 6 a.m. that morning.
23:23It 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.
23:32John Scully had even authorized a $15 million advertising campaign to coincide with the Mac's public unveiling, January 24, 1984.
23:42I remember how nervous Steve was before the introduction of the Macintosh.
23:49And the rehearsal the night before was a total disaster.
23:54Nothing 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, the Apple II in 1977 and the IBM PC in
24:211981.
24:23Today, 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.
24:38And it has turned out insanely great.
24:43You've just seen some pictures of Macintosh.
24:46Now I'd like to show you Macintosh in person.
24:50Macintosh.
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.
25:25On 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 Cobb.
25:44I was standing off stage and as he came off, he said, this is, you know, the proudest, happiest moment
25:50of my life.
25:51And it was all over his face.
25:52It clearly was because he had launched a revolution.
26:03Ultimately, it comes down to taste.
26:06It comes down to trying to expose yourself to the best things that humans have done.
26:12And then try to bring those things in to what you're doing.
26:16I 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
26:36poets and artists and zoologists and historians
26:40who also happened to be the best computer scientists in the world.
26:46With 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.
26:59Please.
27:00With one will, one resolve, one cause.
27:05Despite the hype, by late 1984, the Mac's sales were disastrous.
27:10Oh, God.
27:12Ha!
27:12We shall prevail.
27:18This 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.
27:28But it sold for $2,500, a thousand more than the IBM.
27:33And despite Jobs' best efforts in recruiting software makers like Bill Gates, applications were scarce.
27:40It didn't do very much.
27:41We had MacPaint and MacWrite were our only applications.
27:46And the market started to figure this out.
27:50By the end of the year, people said, well, maybe the IBM PC isn't as easy to use or is
27:58not as attractive as the Macintosh,
28:01but 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, and that
28:12became 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.
28:30The Mac needed its killer application.
28:35Whizzywig, another bunch of initials from the world of the nerds.
28:39What you see is what you get.
28:40So what's the big deal?
28:42Well, it turns out that it's very hard to print on paper exactly the same image that you see on
28:47the computer screen.
28:4880% 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
29:02type, as befitting myself.
29:04And then when I tell it to print, what comes out is a Bob, but certainly not the Bob that
29:09I'd intended.
29:12Until someone invented a way to print exactly what was on the screen, GUI would be, well, a lot of
29:18hooey.
29:20Apple's problem was the dot matrix printer.
29:23It gave everything a typewriter quality.
29:27But 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,
29:40what 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
29:50drive laser printers.
29:52Within two or three weeks, we had canceled our internal project.
29:56A 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
30:05at Apple.
30:08The investment paid off.
30:20The power of precise laser-printed images and a user-friendly GUI gave birth to a brand new business, desktop
30:27publishing.
30:29The spreadsheet had made us all accountants.
30:32Now, using breakthrough software, we could create fancy artwork, snappy-looking notepaper, even counterfeit money.
30:40The Mac had found its killer application, and would soon become the PC of choice for any creative business.
30:48It changed my life.
30:50Just that one instant when I picked up the mouse, my whole life changed to building a career as a
30:57computer artist.
31:01The success of desktop publishing came too late for Apple's founder.
31:06In 1985, Mac sales were still flat, but Jobs refused to believe the numbers.
31:11He simply behaved as if the Mac was a hot seller from the start.
31:15The grandiose plans of what Macintosh were going to be was just so far out of whack with the truth
31:22of 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
31:34John Scully.
31:35John Scully, whom Jobs saw as his own creation, presented the board with his strategy to save the company.
31:42The 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.
31:53If you want him to run it, that's fine with me.
31:57But 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 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,
32:18the decision was that we would go forward with my plans, and Steve left.
32:28Um, what can I say? I hired the wrong guy.
32:32That was Scully?
32:33Yeah.
32:35And he destroyed everything I'd spent ten years working for,
32:42starting with me, but that wasn't the saddest part.
32:45I 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,
32:57and so there was a certain relief that the terrorist would be gone.
33:03And 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,
33:11without the founder, without the charisma?
33:14Apple never recovered from losing Steve.
33:17Steve was the heart and soul and driving force.
33:20It would be quite a different place today.
33:22They lost their soul.
33:36The years after Steve Jobs left were the most profitable for Apple Computer.
33:41Apple people worked hard.
33:42They 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.
33:50Maybe too sexy.
33:51There 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
33:58just to settle it down a bit.
33:59They applied the California lifestyle to the computer industry,
34:03and the computer industry would never be the same again.
34:06Leading the forces of freedom is Macintosh.
34:10In this bizarre promo to inspire their sales force,
34:14Apple stressed that the Mac's ease of use could liberate the pathetic prisoners of the IBM PC.
34:20We'll fight him in the office and the classroom and the desktop with superior weapons.
34:28With improvements to the hardware and the boom in desktop publishing,
34:32Mac production went into overdrive.
34:34By 1987, Apple was selling a million a year.
34:38IBM numbers.
34:41Let's go get them.
34:46The Mac minted money.
34:48Half its $2,000 price was pure profit.
34:58Hello, I am Macintosh.
35:01Apple arrogantly assumed their stuff was so good,
35:04consumers 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,
35:20and 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,
35:29Bill Gates.
35:30Gates saw that the Mac's GUI represented a long-term threat
35:34to Microsoft's money machine, to DOS,
35:37the clunky operating system that sat inside every IBM PC.
35:40So Bill had his boys create a GUI that sat on top of DOS,
35:44rather like building a fancy facade on an old building.
35:48They called it Windows, and it wasn't much at first,
35:50but it was good enough to defend the DOS franchise.
35:54February or March of 1984,
35:56which was just right after the Apple Macintosh had been introduced,
36:00and at that point in time, we were firmly convinced
36:04that we needed to bet on graphic user interface,
36:07first with the Macintosh and then with Windows.
36:12At Microsoft, it was a long and often frustrating struggle
36:16to find a GUI solution that challenged the Mac.
36:19I know the feeling.
36:27For years, teams of Microsofties
36:30slaved in their windowless offices to build Windows,
36:33refreshed by an endless supply of free sodas.
36:37I was the development manager for Windows 1.0,
36:41and 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
36:48before 1990, that'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, and 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.
37:07So finally, they sued Microsoft,
37:10accusing them in a long legal battle
37:12of stealing the look and feel of Apple's GUI.
37:16The look and feel, which is how it looks,
37:20the experience of using it,
37:22was not patentable, but it was copyrightable.
37:26But there was no precedent law.
37:28This was going to be a precedent-setting case.
37:30But it was a period of five years
37:34where Microsoft, our whole strategy would have been ruined
37:39because Windows was very important to us.
37:41They weren't going to change anything.
37:47And they were going to get us to cave in
37:50or take us all the way to the Supreme Court on this thing.
37:52We assumed that the lawyers, the judges,
37:55would all come to the right conclusion,
37:57which eventually they did.
37:59And Apple lost.
38:00But in that period of about six years
38:05that this case was going on,
38:08it may have lulled us into a bit of complacency,
38:12thinking that we were going to be insulated
38:15from the Windows attack.
38:24The launch of Windows 3 in 1990
38:27killed off Apple's hopes
38:28that the Macintosh would win the GUI wars.
38:36Today we're introducing Microsoft Windows version 3.
38:40The six-year labor to produce a GUI
38:43that made IBM PCs and all the clones
38:45as easy to use as the Mac finally came up trumps.
38:49In a year, Windows 3 sold close to 30 million copies,
38:53consigning the Mac to a niche in the market.
38:56Ladies and gentlemen,
38:57the Windows 3 development team.
39:02Bill Gates' strategy won out.
39:04At every stage in the PC's development,
39:07he joined the leading hardware company
39:08and by carving out a dominant market share for his product,
39:12made his software the industry standard.
39:15You know, the original PC.
39:17Did our evangelism and the way we created tools for that
39:20pull that together?
39:23Take Windows.
39:23Did we bet our company on that?
39:25Did that come together?
39:26Virtually everything we've done,
39:28when we first come out with it,
39:29there's a lot of skepticism.
39:30But most of the things,
39:31we really stuck with them
39:34and despite all that second-guessing,
39:37we're able to pull them off.
39:39The problem was,
39:40the industry wasn't measured by
39:41who has the best-selling personal computer
39:43or who has the most innovative technology.
39:46The industry was measured by
39:48who had the most open system
39:50that was adopted by the most other companies.
39:53And the Microsoft strategy ultimately
39:56turned out to be the better business strategy.
39:58The only problem with Microsoft
40:00is they just have no taste.
40:02They have absolutely no taste.
40:04And what that means is,
40:05I don't mean that in a small way,
40:07I mean that in a big way,
40:08in the sense that
40:16they don't think of original ideas
40:18and they don't bring much culture
40:20into their product.
40:23And you say,
40:24well, why is that important?
40:25Well, you know,
40:25proportionally spaced fonts
40:26come from typesetting
40:28and beautiful books.
40:29That's where one gets the idea.
40:30If it weren't for the Mac,
40:32they would never have that in their products.
40:37And so I guess I am saddened,
40:41not by Microsoft's success.
40:42I have no problem with their success.
40:44They've earned their success
40:46for the most part.
40:48I have a problem with the fact
40:49that they just make
40:50really third-rate products.
40:52I will admit, quite frankly,
40:55that I think Windows today
40:57is probably four years behind,
40:59three years behind,
41:00where it would have been
41:02had we not danced with IBM for so long.
41:05Because the amount of split energy,
41:07split work, split IQ in the company
41:10really cost our end customer
41:13real innovation in our product line.
41:16And so whenever I hear these
41:18criticisms, which I've got to say
41:19sting sometimes,
41:21I say to myself,
41:22just you watch,
41:24just you watch Windows 95,
41:25Windows 95.
41:26There's no lack of focus.
41:27There hasn't been here
41:28for the last three, four years
41:30since we didn't have
41:31this big split with IBM.
41:33And I think even in the operating
41:35systems area,
41:36now you'll start to see clear,
41:38clear,
41:38and people will recognize,
41:40clear leadership.
41:41We just keep making them better.
41:44We get millions of phone calls.
41:46We get to go out there
41:47and talk to customers.
41:48And there's nothing
41:49cast in concrete.
41:50If people decide
41:51there's something
41:52that we should change,
41:53we change it.
41:54It's a lot better
41:55than most industries
41:56in that sense.
41:57I think the way that
41:59applications user interfaces
42:01have advanced
42:01over the last decade,
42:02Microsoft has been
42:04at the forefront
42:05of a very high percentage
42:07of that.
42:08And, you know,
42:09I think it's great stuff.
42:13On August 24, 1995,
42:16Gates delivered the coup de grace
42:18to his software rivals.
42:19Windows 95 combines
42:21the PC's operating system
42:23and its graphical interface
42:24into one package.
42:26With a worldwide promotional campaign
42:28costing $300 million,
42:29it looks set to become
42:31the industry standard,
42:33supplanting Microsoft's
42:34old warhorse, DOS.
42:36Thanks.
42:36Thanks, Lord.
42:37All of you for an incredible job.
42:40Cue the triumph of Bill.
42:42A software nerd
42:43is the richest man
42:45in the world.
42:48But even as Bill Gates
42:50bestrides the PC world
42:52like a colossus,
42:53ahead lie bigger battles,
42:55battles that will make
42:56the trouncing of the Mac
42:57and mastering the IBM PC
42:59look like a tea party.
43:05The Gates fortune was built
43:08on setting the industry standard
43:09for PC operating systems.
43:11Fine as long as PCs
43:13are stand-alone boxes
43:14on your desk.
43:17But now they are being linked
43:19into a worldwide network,
43:21the much-hyped
43:22information superhighway.
43:24The PC on the Internet
43:25is a mailbox,
43:26a telephone,
43:27and a television.
43:28Of course,
43:29at the center of this
43:30will be the idea
43:31of digital convergence,
43:33that is,
43:34taking all the information,
43:36books, art,
43:37movies,
43:38and being able
43:39to provide them
43:40on demand
43:41on what the PC
43:42will evolve into.
43:44The Internet
43:45is the next wave
43:46of the information revolution
43:47where there is as yet
43:48no industry standard,
43:50a world where even
43:51Bill Gates seems unsure.
43:54You know,
43:54if you take the way
43:55the Internet
43:55is changing month by month,
43:57if somebody can predict
43:58what's going to happen
43:59three months from now,
44:00nine months from now,
44:00even today,
44:02my hat's off to them.
44:03I think we've got
44:03a phenomena here
44:04that is moving so rapidly
44:06that nobody knows
44:08exactly where it will go.
44:13Bill Gates isn't
44:14resting on his laurels.
44:16He's making new alliances
44:17like investing
44:18in Steven Spielberg's
44:19new movie studio,
44:20DreamWorks.
44:21It would be silly
44:22if we were going to get
44:24into the interactive business.
44:25He's in cable TV
44:26with broadcaster NBC
44:27and in competition
44:29with Rupert Murdoch
44:30and Mickey Mouse.
44:32These tycoons
44:33are a far cry
44:34from the nerds
44:35Bill has so far outsmarted.
44:37Guys like Gary Kildall
44:39who became businessmen
44:40by accident.
44:41Even Bill's victory
44:42over IBM
44:43was really
44:43with a corporate outpost
44:44a long way
44:45from the attention
44:46of big blue headquarters.
44:52No, Bill's new rivals
44:54are hot shots,
44:55not hippies.
44:55And one of them
44:56is the guy I'm visiting.
44:58He hopes the Internet
44:59will go somewhere
45:00other than to Bill Gates'
45:01bottom line.
45:02He's betting it will soon
45:03consign the PC itself
45:05to the trash can
45:06and do the same
45:07to Microsoft.
45:08Bob Cringley
45:09to see Larry Ellison.
45:18Larry Ellison
45:20is the boss
45:20of Oracle,
45:22a booming business
45:22that sells software
45:23to companies
45:24who share information
45:25among hundreds of users.
45:27This is my favorite fish,
45:28it's Halloween fish.
45:29In Atherton,
45:30the most exclusive suburb
45:31in Silicon Valley,
45:33the bachelor billionaire
45:34has built himself
45:35a $10 million samurai mansion,
45:37naturally.
45:39I want to have
45:39a large pond
45:40with five acres of water
45:42surrounded by several
45:43little buildings,
45:43like a village.
45:44Oh.
45:45With his ceremonial car,
45:47Larry contemplates
45:48the coming battle
45:49with Microsoft.
45:50People make a terrible mistake
45:52of thinking IBM
45:53is the present
45:53and Microsoft
45:54is the future.
45:55I think IBM is the past
45:56and Microsoft
45:57at the present
45:57and the future
45:58has not happened
45:59so we don't know
45:59what company,
46:00what technology
46:00is going to be dominant.
46:03These are temple guardians
46:04from the Kamakura period
46:07and they,
46:08you know,
46:09you'd have one
46:09on either side
46:10of your door
46:10and the job
46:10was to scare employees
46:12of Microsoft away
46:13and keep them
46:14from entering the temple.
46:15We shouldn't spend
46:16all of our time
46:17wringing our hands
46:18about, you know,
46:19Microsoft, you know,
46:20Microsoft world domination
46:21that there's still room
46:24left for innovation.
46:25There's going to be change
46:26and Microsoft's future
46:28is not assured.
46:29That's, well,
46:30anything good
46:31for the Internet,
46:31you know,
46:32we're very supportive of
46:33because the Internet
46:34does not require a PC.
46:35Larry believes
46:36the PC will be replaced
46:37with a cheap device
46:38he calls
46:39an information appliance.
46:41It will be
46:41a glorified television
46:43which will access
46:43information
46:44and computing
46:45simply by connecting
46:46to giant computers
46:47via the Internet.
46:49Just like turning
46:50on a tap
46:50and the PC
46:51will go the way
46:52of the well
46:52and the bucket.
46:54I hate the PC
46:55with a passion.
46:57Me going down
46:58to the store
46:58and buying Windows 95
46:59and I get in my car,
47:00drive down to a store,
47:02buy a cardboard box
47:04full of bits,
47:05you know,
47:06encoded on a piece
47:07of plastic,
47:08a CD-ROM,
47:09bring it home,
47:09read a manual
47:10and install this thing.
47:11You must be kidding.
47:12You know,
47:13put the stuff
47:14on the net.
47:15It's bits.
47:16Don't put bits
47:17in cardboard,
47:18cardboard in trucks,
47:19trucks to stores,
47:21me go to the store,
47:22you know,
47:22pick this stuff out.
47:23It's insane.
47:25Okay,
47:25I love the Internet.
47:27I want information,
47:29you know.
47:29It flows across the wire.
47:33So the way ahead
47:34is wired.
47:35Larry,
47:36Bill,
47:36everybody agrees on that.
47:38And we have the nerds
47:39of the 70s
47:40to thank for making it possible,
47:41whether the PC itself
47:43survives or not.
47:44As we take up
47:45their challenge,
47:46it's worth finding out
47:47how these pioneers
47:48made out.
47:50Steve Jobs
47:51sold all his Apple stock
47:52in disgust
47:53when he was fired,
47:54but has made another fortune
47:55from his stake
47:56in a movie animation studio.
47:58He has no doubts
47:59about his contribution
48:00to humanity.
48:02If you talk to people
48:03that use the Macintosh,
48:04they love it.
48:05I mean,
48:06you don't hear people
48:06loving products
48:08very often,
48:09you know,
48:09really.
48:10But you could feel it
48:12in there.
48:12There was something
48:13really wonderful there.
48:15Apple,
48:16the company Jobs
48:17took from a garage
48:18to the Fortune 500,
48:19is in trouble.
48:20It is now a fading force
48:22in the PC marketplace.
48:26Apple's other
48:26millionaire founder
48:27Steve Wozniak
48:28spends much of his time
48:30teaching computing
48:31to 11- and 12-year-olds.
48:36IBM created the mass market
48:38for the PC,
48:39but no longer sets
48:40industry standards.
48:43And most of the guys
48:44who built IBM's first PC
48:46have left Big Blue.
48:50And Ed Roberts,
48:51who built the Altair,
48:52the very first PC,
48:56he turned his back
48:57on computing
48:58and returned
48:58to his first love,
49:00medicine.
49:02Funny, isn't it,
49:03how things turn out?
49:05After all,
49:06the first PC revolution
49:07caught us all
49:07pretty much by surprise.
49:09Even Microsoft,
49:10with 2,000 millionaires
49:12and at least
49:12two billionaires,
49:13never expected
49:14to be as successful
49:15as they are today.
49:18Cringely's universal law
49:19says society
49:20takes 30 years
49:21to adapt new technology
49:23into daily life.
49:24The phone,
49:25movies,
49:25even television
49:26took that long
49:27before our rear ends
49:28became couch-shaped.
49:30So far,
49:31the PC has had 20 years.
49:33So what comes next?
49:34Well, I'm off to find out.
49:36See you in 10 years.
49:38See you in 10 years.
50:09See you in 10 years.
50:11See you in 10 years.
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