For Apple, what a difference a decade makes

Editor’s Note: This story is reprinted from Computerworld. For more Mac coverage, visit Computerworld’s Macintosh Knowledge Center.

Apple could wow the technology world again tomorrow, most likely releasing a long-awaited redesign of its popular iMac line along with a slew of other technology innovations. Analysts and the press now stalk Apple’s every move and sift through every word from Apple PR with a fine-toothed comb, looking for information on the company’s plans. Apple’s stock price keeps hitting new highs on what seems like a weekly basis, and its retail stores are filled to capacity.

In other words, things are going well for Steve Jobs and company.

Times weren’t always this good for Apple. Aug. 7 also marks another milestone: The 10th anniversary of Steve Jobs at his first event at Apple as the returning iCEO (the “I” standing for interim). When Macworld ‘97 took place in Boston, Apple was a mess. It had been just over a month since Jobs again took the wheel at Apple after Gil Amelio had been given his walking papers. Jobs had started the process of killing off the Newton and clone operations at Apple. The company was nearly bankrupt and had lost its direction. Nobody knew what the future held — and what was to be shown that day was anything but reassuring.

To the Mac faithful, Apple was (and, to many, still is) seen as the anti-Microsoft, and the deal unveiled on Aug. 7, 1997, was seen as a deal with the devil. When Microsoft’s then-CEO, Bill Gates, appeared on a giant screen above Steve Jobs and the Macworld attendees that day, the Macintosh community’s reality was flipped upside down. Microsoft was bailing out Apple with a $140 million cash infusion that at the time represented more than 5 percent of the company’s resources. The deal was likely made to help Microsoft fend off a rash of monopoly suits as much as it represented a strategic investment in a long-time partner. The deal, like many in the years since Jobs’ return, turned out to be a boon for Apple. More than just infusing the company with operating capital, the partnership helped restore faith in the troubled Macintosh platform as Apple moved forward with cuts to various parts of its business and an overhaul of operations.

Microsoft got plenty in the deal, too. At the time, Microsoft’s Internet Explorer was trying to usurp Netscape as the Web browser of choice, and a major component of the Apple deal was to make IE the default browser on every new Macintosh system. A few years later, Netscape was all but history. Microsoft also worked out a deal that called for Macintosh systems to include Microsoft’s version of Java — to be jointly developed by Microsoft and Apple — striking a big blow to Sun Microsystems. Microsoft didn’t have as much success in cornering the Java market, and its Java Virtual Machine implementation in Mac was slow and buggy.

Another big part of the arrangement was the cross-licensing of patents. This was another huge win for Microsoft, which was still in court at that time fighting patent disputes with Apple. With that battle behind them, Microsoft’s lawyers could more fully concentrate on the monopoly cases involving Netscape and Sun and the eventual successful appeal.

The deal hadn’t been finalized until 2 a.m. on the day of the announcement, and Jobs’ and Gates’ remarks at Macworld were scripted just hours before the event.

Apple and Microsoft are in two entirely different places now. Microsoft’s share price has been relatively flat, and the company isn’t doing much in the way of innovation except in gaming (XBox 360). The new Vista operating system is getting a mediocre reception as it looks to succeed XP with some security improvements and UI eye-candy that had more than one reviewer crowing that Vista was “copying Mac OS X.” Anecdotally, many users are switching away to either OS X or Linux. For its part, Microsoft has promised more frequent operating system updates that incorporate more gradual changes, but Gates is now about a year from leaving the company altogether and seemed almost apathetic about Vista during his global release tour.

Apple, on the other hand, is riding high and on the offensive in the mobile phone, handheld music/video player and computer markets. Its stock price has skyrocketed over the past few years. Apple’s market cap is now worth more than those of Dell, Adobe Systems and Sun put together, and many analysts have sky-high predictions for the future.

Always the strangest of Apple bedfellows, Microsoft’s Mac products have consistently been very solid applications and an invaluable asset to the platform in the business world. For Apple fans, it has always been hard to swallow that the most successful piece of software on the platform is made by the competition (talk about your old-school halo effect!). Anyone rallying to the Mac cause has to accept this fact.

Microsoft was the first company to ship a major native browser for OS X, beating Netscape and even Apple by months. Microsoft Office was also one of the first major suites ported to OS X—beating the Adobe and Macromedia suites. Windows Media Player and Microsoft Messenger were also early successes on OS X.

Lately, however, Microsoft has fallen behind on the Mac platform. IE for Mac was killed in 2003 and isn’t even available for download anymore. Office 2008, the first Intel-native version of the software suite, was just pushed back again, this time until the new year. Also, Microsoft opted to buy and kill Virtual PC for the Mac rather than port it to Intel — giving up the virtualization monopoly on the Mac Platform to Parallels and VMware. Microsoft also stopped developing Windows Media Player for Mac — instead pointing Mac Users to the Flip4Mac plug-in for QuickTime. With Steve Ballmer taking over the helm at Microsoft, things are likely to become even less cordial. In fact, with Office Live moving to the Web and Windows Virtual Machines becoming so powerful and stable, it is hard to imagine a scenario where Office 2010 would be released to the Mac platform.

In contrast to Microsoft’s attitude of benign neglect of the Mac platform, Apple seems to be innovating away on the Windows platform. Besides the iTunes and QuickTime applications (and Bonjour for PC, if you’re counting), Apple recently released its Safari browser for PC as well — doing a reverse of Microsoft’s IE play on the Mac. Apple is also rumored to be releasing a new version of its iWork and iLife suites. Wouldn’t it be interesting if they also landed on the Windows side?

Seth Weintraub is a global IT management consultant specializing in the technology needs of creative organizations, including The Paris Times, Omnicom and currently the Federation Internationale de l’Automobile. He has set up and managed cross-platform networks on four continents and is an expert in content management systems and large-scale PC and Macintosh Infrastructure.

Editor’s Note: This article was reposted at 12:45 p.m. Eastern on August 7, 2007, to correct the OS X status of Microsoft Outlook.

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