Dr. Dobb's Journal April 1997
Some of the recent decisions made at the top levels at Apple Computer have been charged with high drama and empire-shaking significance. Judge them as you will: as wise or unwise, as bold or desperate, as fraught with poetic justice, or as the inevitable triumph of symbols over substance, of demos over deliverables. But don't for a moment doubt that these decisions are of monumental importance for Apple. It's all about survival. This is computer history in the making.
"NeXT isn't Apple, but Steve is Steve."
-- Jean-Louis Gassée, 1992.
When Apple announced, just before Christmas, that it was purchasing Steve Jobs' NeXT Software, the news caught everyone off guard. At least, I have yet to meet anyone who claims to have seen it coming. Both inside and outside Apple, the expectation had been that Apple would buy or license the BeOS operating system from Jean-Louis Gassée's Be Inc.
The magazines missed it: MacUser and MacWorld ran cover stories heralding Apple's new Be operating system. Mac Tech Journal believed it had scored a coup by getting the rights to bundle a beta CD of BeOS in its MacWorld Expo show issue. And here in Dr. Dobb's Journal, I wrote favorably of BeOS, urging Apple to adopt it.
Apple employees missed it: One senior evangelist told me that he and everyone he knew had been in the dark until the moment of the announcement. He'd been a Be booster, but, practical evangelist that he is, he knows how to read the handwriting on the wall when the wall falls on him, and is now a NeXT convert. (Sorry if I mix religious metaphors here, but it doesn't seem so inappropriate given the new polytheism at Apple.)
We all had good reason to believe that Apple was going the Be route. First, Apple had to do something. CEO Gilbert Amelio had pronounced Apple's upgrade to System 8 dead in the water and there was no in-house alternative in sight. The only option was to go outside, and Apple was indeed openly pursuing an acquisition strategy. Late last year, it was deep in discussions with several companies, but as the year drew to a close and the January MacWorld Expo, where Apple would be expected to announce some sort of plan, approached, the company was clearly expending most of its OS-researching efforts in negotiations with Gassée at Be.
And BeOS looked like a good fit. Mac clone maker Power Computing had even jumped the gun and licensed BeOS to put on its machines.
Then, just before Christmas, came the NeXT announcement. Be was out, NeXT was in, Jobs was back as a consultant. A great story, certainly, but did it make sense technically?
I spent two days and more doing little else than reading the news and developer reaction online. At first, I was puzzled. BeOS really did look like a good fit with the MacOS, filling the gaps and presenting a plausible scenario for the melding of the two OSes. With NextStep or OpenStep (the cross-platform version of the NeXT OS), I just couldn't see the fit. NextStep and the MacOS seemed like pieces from two different jigsaw puzzles. And what was the benefit of the melding, anyway? Frankly, I wasn't so sure it was a question of what NextStep had to offer to the MacOS so much as what the MacOS had to offer NextStep.
It took me about a day to figure out what is obvious in retrospect. Clearly, I was laboring under a misconception. There was no problem of melding NextStep and the MacOS into one coherent new MacOS, because Apple had no intention of doing any such thing. This was not an operating-system upgrade plan, it was an operating-system replacement plan.
That was about as much as I had figured out by the time I wrote last month's column, and I took it to mean that the Mac was history. As it turns out, that may not be quite right. The Mac will survive, but only as a software component, a compatibility box in the new Rhapsody OS, which will be based on NextStep. If you insist that "the Mac" means dedicated hardware running the MacOS, the Mac is history. The broad-brush plan was laid out at MacWorld Expo in January, as I will report shortly.
But how had the NeXT deal come about? How did it happen that everyone was caught napping? Here, based on the news reports, rumors, and secondhand smoke from the legendary Steve Jobs reality-distortion effect, is that instant legend as it is currently being told.
Apple had considered NextStep early on in its evaluation of outside operating systems, but not in great depth. By November, attention was so focused on BeOS that most Apple employees were assuming that the decision was essentially made, and that only the numbers were still being negotiated. It's certainly true that hard negotiations were under way over the price of the BeOS. Although rumors flying just after the deal fell through had Gassée blowing the deal by being too greedy, it seems clear that the price he was asking -- and even the seat on the Apple board that he wanted -- was not outrageous. Particularly not given Apple's, shall we say, lack of leverage? shall we say, desperation? Apple would probably have given Gassée something very close to what he was asking for, if an alternative hadn't appeared at the last moment.
The alternative, buying NeXT, seemed to come from out of nowhere. Apparently, "nowhere" was the office of John Landwehr.
Landwehr was a product manager at NeXT. Like most NeXT employees, he believed in his heart that his company's operating system and other software were far superior to anything else available, and that all NeXT needed to take the industry by storm was the kind of marketing muscle that a really big company could give them. Landwehr had a particular big company in mind. NextStep's advanced technology and radical ease of use made it a particularly good fit, he thought, for Apple Computer. He had a story to tell Apple.
Landwehr was not someone who could pick up the phone and pitch his operating system -- or his entire company -- to the CEO of the world's third largest computer company, no matter how desperate that company might be, but he was determined to get the message through. After hammering away at the NeXT chain of command, he finally broke through to NeXT's vice president of Worldwide Sales and Services, Mitch Mandich.
Mandich listened, and acted. Not directly, perhaps, but he acted. What he did was to pass on the job of calling Apple back down the chain of command to a senior marketing manager, who passed it further down the chain to Garrett Rice, NeXT's channel marketing manager.
Rice called someone at Apple, and the phone tag worked its way up Apple's chain of command all the way to the top technical decision maker, chief technical officer Ellen Hancock.
In the week of November 18, the buck-passing and phone tag ended, when Hancock took Rice's call.
Shortly thereafter, Apple executives were sitting in a NeXT conference room, listening to a pitch from NeXT personnel. Some of NeXT's personnel; NeXT's CEO was conspicuous by his absence. But then, by chance, while the meeting was going on, the CEO called in.
At this stage in the company's history, it had only a part-time CEO. Steve Jobs had purchased a division of LucasFilms several years earlier and turned it into a company called Pixar. Pixar did computer animation; in particular, it did the animation work that made Toy Story one of the biggest box-office smashes in history, and that, in turn, made CEO Steve Jobs a billionaire. NeXT was Job's other major venture, and while it was considerably less successful than Pixar, it still got a significant share of his attention. He'd been away that morning, so he had called in.
The timing was fortuitous. Up to this point, Jobs had heard nothing about any interest from Apple, knew nothing of the meeting. Maybe you'd better get over here, he was told. Yes, he thought, maybe he'd better get over there.
Before long, the negotiations with Apple had been taken over by NeXT's best salesman, its founder and CEO, Steven Paul Jobs. What exactly Jobs said to Hancock and Amelio has yet to come out, but we can guess that it was compelling. This is the man who overcame John Sculley's reluctance to leave a fast-track position at Pepsico to head an upstart computer company by telling him that he could spend the rest of his life selling sugar water or "you can come with me and change the world. Which is it going to be?" There is definitely an argument to be made in favor of NextStep over BeOS, and Jobs surely made it and made it compelling.
So what is the argument? What exactly does Apple expect to get out of NeXT, what does it expect to do with what it bought? And what did it buy? Here are the particulars:
The package: Apple bought the whole company. All NeXT products, services, and technology research are now part of Apple Computer. The price was $400 million, which also cancels the roughly $50 million of NeXT debt. (Don't believe the numbers in the December Red Herring magazine.)
The people: In its announcing press release, Apple singled out, among the NeXT people who are now Apple employees, Avie Tevanian, former NeXT vice president of Engineering, who will "lead [Apple's] next generation OS development efforts" and report directly to Ellen Hancock; NeXT sales VP Mitch Mandich, who will be reporting to Apple's chief operating officer, Marco Landi; and NeXT's former chief financial officer, Dominique Trempont.
And of course Steve Jobs. Jobs, as part of the deal, has come back to Apple as a part-time consultant helping to chart Apple's next generation OS strategy, and reporting directly to CEO Amelio. No stock, no seat on the board, no Apple employees reporting to him. His influence could be negligible, or it could be enormous.
The OS: The current release of NextStep is a robust, field-tested, multithreaded, object-oriented OS with memory protection, preemptive multitasking, and a modern virtual memory system. Symmetric multiprocessing, one of the items on Amelio's shopping list, is in the works. The software runs flawlessly on Intel hardware, among other platforms, and has been ported to PowerPC, if not yet in a ready-for-shrinkwrap form.
WebObjects: Apple's press release mentioned WebObjects, NeXT's Internet and intranet application development and deployment environment, as a key element of the deal. The Sharper Image, Ford, Nissan, Lufthansa, Bell South, and the U.S. Postal Service are all using WebObjects for mission-critical applications.
Enterprise savvy: Apple explicitly acknowledged its own failings in corporate markets by praising the NeXT corporate sales force. They know how to talk to corporate buyers. They use phrases like "business logic." They understand CORBA. Wow.
The crowd was jammed against the doors that morning in January, eager to hear the keynote address, to hear Apple's plans for NeXT, to see -- it was rumored -- Steve Jobs himself walk back onto the stage at a MacWorld Expo. It had been 11 years.
When the doors opened and the crowd had rushed in, filling the seats and all the floor-sitting and standing room in the hall, the monitors showed a clip from the movie Independence Day. In the clip, Macintosh users saved the world from annihilation by alien invaders. If you want to save the world, you've got to have the right computer, was the message. Then Jeff Goldblum, one of the stars of Independence Day, took the stage, told some jokes, and introduced Gil Amelio.
It was a typically dramatic Apple show, and it was very effective. With two notable exceptions, the keynote never reached that level of interest again. For three hours, Amelio laid out Apple's future plans and introduced employees to demonstrate new technologies. The presentation was oddly lacking in focus and direction. Although winging it is Amelio's style, there was something else throwing him off: Steve Jobs was apparently late. As the time dragged on, Amelio and an endless stream of demo runners kept the crowd fidgeting until, finally, Jobs arrived.
When Jobs walked on stage, the crowd rose as one and broke into thunderous applause that stretched on for some time. Journalists and other industry watchers may have been a little cynical, but many of the people in that audience were actual users. Apple still meant something to them. To some die-hards, it still meant innovation. To many who hadn't used Windows, it still meant the state of the art in ease of use and setup, and for many who had used Windows, too, of course. To some who were probably just living in the past, it meant a different kind of company, one willing to take risks, to bring different values to the table. And to everyone present, cynical press included, Apple still meant an alternative to a one-OS world. And despite his 11-year absence from the company, no individual symbolized all that was Apple like Steve Jobs. Whatever the cynicism of the press, the reservations of those who had escaped from the Jobs reality-distortion field, the exemployees still nursing the psychic wounds of a Jobs tongue-lashing, to the users present, the man who had just walked onstage was a hero, the one person who could save their beloved Apple.
That adulation, deserved or not, is a real and powerful force. It's exactly the kind of force that Steve Jobs knows how to use, probably better than any other secular leader on the planet today.
Jobs had some concrete things to say about the virtues of NeXT's software. But his appearance was most significant as theater. Later, when Amelio brought Jobs back to the stage along with cofounder Steve Wozniak, the audience rose to its feet again. The Return of Steve Jobs (with cameo appearance by Steve Wozniak) was surely the computer industry event of the year.
The importance of the theatrics should not be underestimated. Apple's current woes are partially the result of the company shooting itself in the foot repeatedly, and partly a result of the vultures smelling blood. Apple has to get over its foot-shooting habit, but it also needs somebody to shoo off the vultures. It needs some radical PR surgery, of the kind that a man with his own personal reality-distortion field can produce.
So, The Return of Steve Jobs, purely as theater, may count for as much as half of what it takes to turn Apple around.
The other half is to be found in decisive management -- apparently now in place in the persons of Gilbert Amelio and Ellen Hancock -- and, Apple had better hope, in Rhapsody.
Rhapsody is the next Apple OS; not, as many in the press thought right up to the day of the keynote, the next MacOS, but the next Apple OS.
When I stood in line for Amelio's keynote address, computer journalists were still talking about the problems of integrating NeXT into the MacOS. MacWEEK's cover story the day the show opened was "NeXT chapter for MacOS."
Which, of course, misses the whole point.
The point being that Apple's OS strategy, the key to resolving all of Apple's woes, is to separate the two problems of: 1. upgrading the current OS with competitive "gotta have it" features and greater stability; and 2. the need to field a "stable, modern, fully preempted and memory-protected multitasking environment, with built-in capabilities for symmetric multiprocessing."
The whole point being that Apple is pursuing a two-OS strategy.
Rhapsody, which Apple predicts will be in developers' hands this year, will be based on NextStep (or OpenStep) and will run on PowerPC. It will, although not in the initial release, run Mac applications and deliver a thoroughly Mac-like user experience, in a compatibility box called the "blue box." This OS-within-an-OS will continue to be upgraded with features from the ill-fated Copland, or System 8, release. The rest of the OS will be NextStep with whatever Mac elements can be readily grafted on: some Mac user interface features, some Apple technologies like QuickTime.
Assuming that Apple understands that it doesn't have much time to get something into developers' hands, I think we can expect Rhapsody to look a lot more like NeXT than like Mac.
DDJ