A great new battle is about to be joined

In early March, Apple invited some 50 to 60 analyst/journalist types to an off-site briefing. Over two days, Apple’s senior business and technical management described a new system software strategy for the ’90s. That briefing, compared with Microsoft’s strategy, nicely highlights some of the similarities and differences in the ways in which the two companies are approaching the digital world.

HERD MENTALITY VS. FLYING WEDGE

In the accompanying article, Microsoft’s strategy is likened to a flying wedge of unity, purpose and vision. This is because wherever ideas originate within the company, they ultimately have to be sold to one man — Bill Gates — and Gates is a very focused individual.

This fact does not mean that Microsoft cannot alter its course or even completely change its mind about something. The company has a remarkable ability to embrace new ideas and new insights and let the past be past.

Apple, by contrast, has always flirted with chaos. It is a fair job to get a collection of creative groups and opinionated individuals all heading more or less in the same direction at the same time. One of the points of the Apple system briefing was to demonstrate that at least the majority of the herd is now charging in the same direction with the same objectives in mind.

SCULLEY’S THREE-PHASE STRATEGY

Apple chairman John Sculley explained Apple’s recently announced foray into consumer electronics as the third stage of a three-phase strategy for growing Apple in the 1990s:

1. Compelling computer products. The first stage has been to build momentum in Apple’s core business by establishing Apple as a supplier of compelling personal computer products with (for the first time) highly competitive price/performance.

Although there is obviously more to do, Sculley believes that Apple has successfully launched this step.

2. Open the corporate market. The next step is to gain a stronger presence in large organizations. To accomplish this, Apple is doing what it thinks it should do to appeal to the traditional MIS crowd: mini and mainframe connectivity, data security and the IBM alliance.

However, Apple realizes that there is nothing it can do to unseat Microsoft in this market. No matter how hard it tries, it will always be the minority player.

3. Merger of computers, consumer electronics. As we discussed in the first issue of Digital Media, Apple’s best hope for getting out from under Microsoft’s shadow is an end-run into the new computer/consumer electronics “dream market.”

Apple has strengths that could give it an edge in this quest: its lead in rich graphical computer applications, its affinity for “user-friendly” hardware/software packages, and brand recognition will have considerable consumer appeal. However, it will need to form alliances with the consumer electronics giants. As is evident from the accompanying article, it is going to face formidable competition from Microsoft in making these alliances.

LONG LIVE THE MACINTOSH

Several years ago, Apple set up two competing system software teams. The Blue team was committed to the evolution of the current Macintosh system software. The Pink team was charged with developing an entirely new, object-oriented operating system.

The Pink team has now been sent off to Taligent, the Apple/IBM joint system software venture. The Blue team is left in undisputed charge back at Apple. Taligent was barely mentioned in the system briefing. We heard, instead, about plans for the continued evolution of the Macintosh for as far into the future as anyone could see.

Modular software. The biggest change will be a move away from a single “one size fits all” Macintosh operating system to modular system software. There will be a relatively small, compact core of system software, plus a library of add-on modules that support a variety of sophisticated functions.

This was probably inevitable. As we move towards an increasingly wide range of personal computer configurations and capabilities, it no longer makes sense to burden every computer with support for functions it will never be called on to perform. Why, for example, should a lightweight notebook computer, which is going to be used for word processing and spreadsheets, give up disk space and memory to support full-motion video on a 24-bit color monitor?

However, it means that the once relatively homogeneous Macintosh world is going to start looking more like the PC world. In order to determine whether a given software program will run on a particular Macintosh, you will have to know the hardware and system software configuration of that Mac.

It may also mean modular pricing for Apple system software. Right now, you either have to pay $10 to get QuickTime for your Macintosh or you have to buy an application program that includes QuickTime. In the future, you may pay appreciably more for important system software add-ons — which will make it even less likely that any two Macintoshes are identically equipped.

Different software for consumer devices. So far, this sounds as if Apple is moving in more or less the same direction as Microsoft. However, when it comes to consumer products, the two companies diverge.

Microsoft, you may recall, is proposing a stripped-down version of Windows as the operating system for consumer devices. Apple contends that the user interface and packaging requirements for consumer devices are so different that a different operating system will be required.

Apple expects that the user will be able to move data across the full range of devices from hand-held consumer boxes to robust, networked business computers. It also expects that most software written for the consumer machines will run on Macs (but, most often, not vice-versa).

We are not entirely clear what this will mean in practical terms. In the best of all worlds, we will be able to move both data and programs across the full range of devices as easily in the Apple world as in the Microsoft one — and have the added benefit of a consumer-device operating system that is optimized for these devices.

In the worst of all worlds, we will see a proliferation of Apple operating systems (Taligent, Macintosh, consumer products), each developed by a different division (or different company), with somewhat creaky bridges between them.

WHITHER KALEIDA?

Kaleida, the Apple/IBM joint venture to establish open multi-vendor software and data standards for new media, was mentioned even less than Taligent. Apple did re-affirm that QuickDraw remains Apple (not Kaleida) property. Instead, Apple said that it will transfer to Kaleida “certain QuickTime technologies” to help get Kaleida off the ground.

In general, the relationship between the Apple Advanced Technology Group (ATG), the Apple Consumer Division and Kaleida is still confusing. We do not expect to see real clarification until after Apple and IBM have settled on a Kaleida management team and assigned specific people and projects to Kaleida. We keep waiting for this to happen and are concerned about what might be causing the delay.

APPLE VS. MICROSOFT

We expect to see fierce jockeying for position between Microsoft and Apple/Kaleida in the coming year. They are both courting the same Japanese and domestic partners.

The Japanese consumer electronics companies, after some period of uncertainty about what they might have to gain from such alliances, now appear to be very interested. (The consumer electronics market is faltering. It is amazing how a little pain on the bottom line can concentrate the mind.)

Apple has interesting technologies and capabilities, but Microsoft has dominance of the PC market and a focused, single-minded intensity that Apple cannot match. Moreover, because it will be offering a stripped-down version of its existing operating system software, rather than a new purpose-built operating system, Microsoft may actually be first into the market.

If you were Sony, Matsushita, Nintendo, Sharp, Toshiba or Fujitsu, what would you do? Do you ally yourself with one? Do you experiment with both? Do you do it yourself? Do you sit things out for a while until the technology takes more shape? If the past is any indication, Sony, Matshushita, Nintendo et. al. will have no problem trying a little bit of this and a little bit of that. Apple and Microsoft will be vying to do the best little bits.

Jonathan Seybold