Steve Jobs about Apple and Microsoft (1997):
We have to let go of this notion that for Apple to win Microsoft has to lose.
On July 9, 1997, Gil Amelio was ousted as CEO of Apple by the board of directors after overseeing a 12 year record low stock price and crippling financial losses. Jobs stepped in as the interim CEO to begin a critical restructuring of the company’s product line. He would eventually become CEO and is serving in that position to the present day.
At the 1997 Macworld Expo, Steve Jobs announced that Apple would be entering into partnership with Microsoft. Included in this was a five-year commitment from Microsoft to release Microsoft Office for Macintosh as well a US$150 million investment in Apple. It was also announced that Internet Explorer would be shipped as the default browser on the Macintosh. Microsoft chairman Bill Gates appeared at the expo on-screen, further explaining Microsoft’s plans for the software they were developing for Mac, and stating that he was very excited to be helping Apple return to success.
Transcript Macworld Expo, Boston, August-06-1997
Now I’d like to talk about meaningful partners. Apple lives in an ecosystem, and it needs help from other partners. It needs to help other partners. And relationships that are destructive don’t help anybody in this industry as it is today. So during the last several weeks, we have looked at some of the relationships, and one has stood out as a relationship that hasn’t been going so well but had the potential, I think, to be great for both companies. And I’d like to announce one of our first partnerships today, a very, very meaningful one. And that is one with Microsoft. [Mix of applause and boos.]
I’d like to take you through this. The discussions actually began because there were some patent disputes. And, rather than … [Laughter.]
I know. Rather than repeating history, I’m extremely proud of both companies that they have resolved these differences in a very, very professional way. And this has led, I think, to an overall relationship that we’re announcing today that has got several parts to it, and we’re extremely excited about.
First part of it is a patent settlement and cross-license. The two companies have received a full cross-license for all patents that exist and for patents that are filed within the next five years. It has been a very serious patent settlement. The second part of this is, Microsoft is committing to release Microsoft Office on Macintosh for the next five years. They are going to release the same number of major releases as they release on Windows during that time. Their first release, they’re going to target to have it out near the end of the year, it might slip a few months into next year, but they’re working real hard on it, and it looks very, very good.
Next, we have taken a look at browsers out there and Apple has decided to make Internet Explorer its default browser on the Macintosh. [Audience boos.] Since we believe in choice, we’re going to be shipping other Internet browsers, as well, on the Macintosh, and the user can, of course, change their default should they choose to. [Applause]
But we believe that Internet Explorer is a really good browser, and we think it’s going to make a fine default browser. Java. We are going to be collaborating with Microsoft on Java to ensure that we can get the best from each other and ensure that there’s compatibility between our virtual machines. We think that will serve everybody’s interests. And lastly, Microsoft is making an investment in Apple. Microsoft is buying $150 million worth of Apple stock at market price. It is non-voting shares. [Cheers]
And they’ve agreed not to sell them for at least three years. So what this means is that Microsoft is going to be part of the game with us as we restore this company back to health, have a vested interest in that stock price going up. We’re going to be working together on Microsoft Office, on Internet Explorer, on Java. And I think that it’s going to lead to a very healthy relationship. So it’s a package announcement today. We’re very, very happy about it. We’re very, very excited about it. And I happen to have a special guest with me today via satellite downlink. And if we could get him up on the stage right now …
[Gates appears on screen. Mix of applause and boos.]
Some of the most exciting work that I’ve done in my career has been the work that I’ve done with Steve on the Macintosh. Whether it’s the first introduction or doing products like Mac Excel, these have been major milestones, and it’s very exciting to renew our commitment to the Macintosh. We have over 8 million customers using Microsoft software on the Macintosh. We make it very easy for people who use Macintosh to take their, their documents and work with all kinds of machines. We’re very excited about the new release we’re building. This is called Mac Office 98. We do expect to get it out by the end of this year. And we’ve got some, some real exciting features. It’s a product that’s going to require no setup. It’s going to be an easy transition from people in the past. And I think it’s going to really set a new benchmark for doing a good job with performance, and exploiting unique Mac features. In many ways it’s more advanced than what we’ve done on the Windows platform. [Applause.]
We’re also excited about Internet Explorer. And we’ve got a very dedicated team that’s down in California that works on that product. And the code is really specially developed for the Macintosh. It’s not just a port of what we’ve done in the Windows environment. [Applause.] And so we’re pleased to be supporting Apple. We think Apple makes a huge contribution to the computer industry. We think it’s going to be a lot of fun helping out, and we look forward to the feedback from all of you as we move forward doing more Macintosh software. Thanks. [Applause]
Thank you, Bill. You know, where we are right now, is we’re shepherding some of the greatest assets in the computer industry. And if we want to move forward, and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win Microsoft has to lose. [Applause.] We have to embrace a notion that for Apple to win, Apple has to do a really good job. And if others are going to help us, that’s great, because we need all the help we can get. And if we screw up and we don’t do a good job, it’s not somebody else’s fault. It’s our fault. So I think that’s a very important perspective. I think if we want Microsoft Office on the Mac, we better treat the company that puts it out with a little bit of gratitude. We’d like their software. So the era of setting this up as a competition between Apple and Microsoft is over as far as I’m concerned. This is about getting Apple healthy, and this is about Apple being able to make incredibly great contributions to the industry, to get healthy and prosper again. The last perspective I’d like to leave with you on this is sometimes points of view can really make you look at things differently. Like for me, when I was looking at the statistics and it hit me that Apple is the largest education company in the world, that was like a bolt of lightning. That’s huge. What an incredible base to build off of. Another bolt of lightning is that Apple plus Microsoft equals 100 percent of the desktop computer market. And so, whatever Apple and Microsoft agree to do, it’s a standard. And I think that you’ll see us work with Microsoft more because they’re the only other player in the desktop industry and I think that you’ll want to see Microsoft work with Apple more because Apple is the only other player in the desktop industry. So I hope we have even more cooperation in the future because the industry wants it.
Lastly, I want to just talk a little about Apple and the brand and what it means, I think, to a lot of us. You know, I think you always had to be a little different to buy an Apple computer. When we shipped the Apple II, you had to think different about computers. Computers were these things you saw in movies, they occupied giant rooms. They weren’t these things you had on your desktop. You had to think differently because there wasn’t any software at the beginning. You had to think differently when a first computer arrived at a school where there had never been one before and it was an Apple II. I think you had to think really differently when you bought a Mac. It was a totally different computer, worked in a totally different way, used a totally different part of your brain. And it opened up a computer world for a lot of people who thought differently. You were buying a computer with an installed base of one. You had to think differently to do that. And I think you still have to think differently to buy an Apple computer. And I think the people that do buy them do think differently and they are the creative spirits in this world. They are the people that are not just out to get a job done, they are out to change the world. And they’re out to change the world using whatever great tools they can get. And we make tools for those kinds of people. So hopefully what you’ve seen here today are some beginning steps that give you some confidence that we, too, are going to think differently, and serve the people that have been buying our products since the beginning. Because a lot of times people think that they’re crazy. But in that craziness, we see genius, and those are the people we’re making tools for. Thank you very much.
Steve Jobs realized later that the image of Gates looming over him and the audience was a mistake. “I wanted him to come to Boston,” Jobs told Walter Isaacson, author of the biography “Steve Jobs”. “That was my worst and stupidest staging event ever. It was bad because it made me look small, and Apple look small, and if everything was in Bill’s hands.” Gates was also embarrassed when he saw the videotape of the event. “I didn’t know that my face was going to be blown up to looming proportions,” he said.
Walter Isaacson: Steve Jobs, Simon&Schuster, New York, 2011, Page 326.
History of Apple. (2008, October 16). In Wikipedia, The Free Encyclopedia. Retrieved 22:02, October 19, 2008, from http://en.wikipedia.org/w/index.php?title=History_of_Apple&oldid=245772530
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