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Un mariage secret! / A secret wedding! Steve Job & Bill Gates Entrevue / Interview (en anglais seulement) by Walt Mossberg - The Wall Street Journal Kara Swisher - The Wall Street Journal May 2007 |
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Nobody knew quite what to expect when, in a rare joint meeting Wednesday May 30, 2007,
Microsoft chairman Bill Gates and Apple CEO Steve Jobs sat down together for an interview
at the fifth annual All Things Digital Conference. The two technology pioneers and fierce
competitors, after all, hadn't exactly been sending each other mash notes lately. Gates had
complained to NEWSWEEK in January about Apple's television ad campaign that unfavorably
compare PCs to Macs, asking rhetorically if being cool meant you didn't have to tell the truth.
And just a few hours before their evening meeting at the Carlsbad, Calif., conference, Jobs
was taking swipes at Microsoft. When Apple wrote its iTunes application for Windows, he told
attendees earlier that day, "it was like offering glasses of ice water to people in hell."
But when the original PC and Mac guys finally appeared together to take questions from
The Wall Street Journal's Walt Mossberg and Kara Swisher, what unfolded was more love fest
than spitting match. Jobs and Gates have known each other for 30 years and worked both as
collaborators (particularly when Microsoft was a key developer for the original Macintosh in
the early 1980s) and rivals. Though there were a few barbs, what emerged was a mutual
respect and, yes, affection. Afterward, there was general agreement among spectators that
the conversation was not only a historic moment but an emotional milestone in the technology
industry's history. And, as you can see in this partial transcript courtesy of The Wall Street
Journal (the full transcript is available on the Journal's Web site), Gates and Jobs, at the
urging of their questioners, each offered a unique analysis of the tech world, intriguing
speculation about the future—and a few laughs, as well.
Kara Swisher: So let's get started. I wanted to ask, there's been a lot of
mano-a-mano/catfight kind of thing in a lot of the blogs and the press and stuff like that,
and we wanted to—the first question I was interested in asking is what you think each has
contributed to the computer and technology industry, starting with you, Jobs, for Gates, and
vice versa.
Steve Jobs: Well, you know, Gates built the first software company in the industry, and
I think he built the first software company before anybody really in our industry knew what a
software company was, except for these guys. And that was huge. That was really huge. And
the business model that they ended up pursuing turned out to be the one that worked really
well, you know, for the industry. I think the biggest thing was, Gates was really focused on
software before almost anybody else had a clue that it was really the software.
Swisher: Was important?
Jobs: That's what I see. I mean, a lot of other things you could say, but that's the
high-order bit. And I think building a company's really hard, and it requires your greatest
persuasive abilities to hire the best people you can and keep them at your company and keep
them working, doing the best work of their lives, hopefully. And Gates's been able to stay
with it for all these years.
Walter Mossberg: Gates, how about the contribution of Jobs and Apple?
Bill Gates: Well, first, I want to clarify: I'm not Fake Steve Jobs … What Jobs's done is
quite phenomenal, and if you look back to 1977, that Apple II computer, the idea that it would
be a mass-market machine, you know, the bet that was made there by Apple uniquely—there
were other people with products, but the idea that this could be an incredible empowering
phenomenon, Apple pursued that dream. Then one of the most fun things he did was the
Macintosh, and that was so risky. People may not remember that Apple really bet the company.
[The Apple] Lisa [computer] hadn't done that well, and some people were saying that general
approach wasn't good, but the team that Jobs built even within the company to pursue that,
even some days it felt a little ahead of its time—I don't know if you remember that Twiggy
disk drive.…
Jobs: One-hundred-twenty-eight K….
Swisher: Oh, the Twiggy disk drive, yes.
Gates: Jobs gave a speech once, which is one of my favorites, where he talked about,
in a certain sense, we build the products that we want to use ourselves. And so he's really
pursued that with incredible taste and elegance that has had a huge impact on the industry.
And his ability to always come around and figure out where that next bet should be has been
phenomenal. Apple literally was failing when Jobs went back and reinfused the innovation
and risk-taking that have been phenomenal. So the industry's benefited immensely from
his work. We've both been lucky to be part of it, but I'd say he's contributed as much as
anyone.
Jobs: We've also both been incredibly lucky to have had great partners that we started
the companies with and we've attracted great people. I mean, so everything that's been done
at Microsoft and at Apple has been done by just remarkable people, none of which are sitting
up here today.
Swisher: Well, not us.
Mossberg: Not us. So in a way, you're the stand-ins for all those other people.
Jobs: Yeah, in a way, we are. In a very tangible way.
Mossberg: So Gates mentioned the Apple II and 1977 and 30 years ago. And there were
a couple of other computers which were aimed at the idea that average people might be able
to use them, and looking back on it, a really average-average person might not have been
able to use them by today's standards, but it certainly broadened the base of who could use
computers. I actually looked at an Apple ad from 1978. It was a print ad. That shows you
how ancient it was. And it said: thousands of people have discovered the Apple computer.
Thousands of people. And it also said, you don't want to buy one of these computers where
you put a cartridge in. I think that was a reference to one of the Atari[s] or something.
Jobs: Oh, no.
Mossberg: You want a computer you can write your own programs on. And obviously,
people still do.
Jobs: We had some very strange ads back then. We had one where it was in a kitchen a
nd there was a woman that looked like the wife, and she was typing in recipes on the
computer with the husband looking on approvingly in the back. Stuff like that.
Mossberg: How did that work for you?
Jobs: I don't think well.
Mossberg: I know you started Microsoft prior to 1977. I think Apple started the year
before, in '76.
Jobs: … '76.
Mossberg: Microsoft in ...
Gates: … '74 was when we started writing BASIC. Then we shipped the BASIC in '75.
Mossberg: Some people here, but I don't think most people, know that there was
actually some Microsoft software in that Apple II computer. You want to talk about what
happened there, how that occurred?
Gates: Yeah. There had been the Altair and a few other companies—actually, about 24—
that had done various machines, but the '77 group included the PET, TRS-80 ...
Mossberg: Commodore?
Gates: Yeah, the Commodore PET, TRS-80 and the Apple II. The original Apple II BASIC,
the Integer BASIC, we had nothing to do with. But then there was a floating-point one where—
and I mostly worked with Woz on that.
Jobs: Let me tell the story. My partner we started out with, this guy named Steve Wozniak.
Brilliant, brilliant guy. He writes this BASIC that is, like, the best BASIC on the planet. It does
stuff that no other BASIC's ever done. You don't have to run it to find your error messages.
It finds them when you type it in and stuff. It's perfect in every way, except for one thing,
which is it's just fixed-point, right? It's not floating-point. So we're getting a lot of input that
people want this BASIC to be floating-point. And, like, we're begging Woz, please, please
make this floating-point.
Mossberg: Who's we? How many people are in Apple?
Jobs: Well, me. We're begging Woz to make this floating-point and he just never does it.
You know, and he wrote it by hand on paper. I mean, you know, he didn't have an assembler
or anything to write it with. It was all just written on paper and he'd type it in. He just never
got around to making it floating-point.
Swisher: Why?
Jobs: This is one of the mysteries of life. I don't know, but he never did. So, you know,
Microsoft had this very popular, really good floating-point BASIC that we ended up going
to them and saying "help."
Mossberg: And how much was the—I think you were telling us earlier ...
Gates: Oh, it was $31,000.
Mossberg: That Apple paid you for the ...
Gates: For the floating-point BASIC. And I flew out to Apple, I spent two days there
getting the cassette. The cassette tapes were the main ways that people stored things at
the time, right? And, you know, that was fun. I think the most fun is later when we worked
together.
Mossberg: What was the most fun? Tell the story about the most fun that was later.
Swisher: Or maybe later, not the most fun.
Mossberg: Let them talk.
Swisher: Teasing.
Gates: Well, you know, Jobs can probably start it better. The team that was assembled
there to do the Macintosh was a very committed team. And there was an equivalent team on
our side that just got totally focused on this activity. Jeff Harbers, a lot of incredible people.
And we had really bet our future on the Macintosh being successful, and then, hopefully,
graphics interfaces in general being successful, but first and foremost, the thing that would
popularize that being the Macintosh. So we were working together. The schedules were
uncertain. The quality was uncertain. The price. When Jobs first came up, it was going to be
a lot cheaper computer than it ended up being, but that was fine.
Swisher: So you worked in both places?
Gates: Well, we were in Seattle and we'd fly down there.
Mossberg: But Microsoft, if I remember correctly from what I've read, wasn't Microsoft
one of the few companies that were allowed to even have a prototype of the Mac at the time?
Jobs: Yeah. What's interesting, what's hard to remember now is that Microsoft wasn't in
the applications business then. They took a big bet on the Mac because this is how they got
into the apps business. Lotus dominated the apps business on the PC back then.
Gates: Right. We'd done just MultiPlan, which was a hit on the Apple II, and then Mitch
[Kapor of Lotus Development] did an incredible job betting on the IBM PC and 1-2-3 came
in and, you know, ruled that part of the business. So the question was, what was the next
paradigm shift that would allow for an entry? We had Word, but WordPerfect was by far
the strongest in word processing…..
Mossberg: And Word was kind of a DOS text ...
Gates: All of these products I'm saying were DOS-based products.
Mossberg: Right.
Gates: Because Windows wasn't in the picture at the time.
Mossberg: Right.
Gates: That's more early '90s that we get to that. So we made this bet that the
paradigm shift would be graphics interface and, in particular, that the Macintosh would
make that happen with 128K of memory, 22K of which was for the screen buffer, 14K was
for the operating system. So it was ...
Mossberg: Fourteen K?
Gates: Yeah.
Mossberg: The original Mac operating system was 14K?
Gates: Fourteen K that we had to have loaded when our software ran. So when the shell
would come up, it had all the 128K.
Jobs: The OS was bigger than 14K. It was in the 20s somewhere.
Mossberg: I see.
Jobs: We ship these computers now with, you know, a gigabyte, 2 gigabytes of memory,
and nobody remembers 128K.
Mossberg: I remember that. I remember paying a lot of money for computers with 128K
in those days. So the two companies worked closely on the Mac project because you were
maybe not the only but the principal or one of the principal software creators for it, is that
right?
Jobs: Well, Apple did the Mac itself, but we got Gates and his team involved to write these
applications. We were doing a few apps ourselves. We did MacPaint, MacDraw and stuff like
that, but Gates and his team did some great work.
Swisher: Now, in terms of moving forward after you left and your company grew more
and more strong, what did you think was going to happen to Apple after sort of the disasters
that occurred after Jobs left?
Gates: Well, Apple, they hung in the balance. We continued to do Macintosh software.
Excel, which Jobs and I introduced together in New York City, that was kind of a fun event,
that went on and did very well. But then, you know, Apple just wasn't differentiating itself
well enough from the higher-volume platform.
Mossberg: Meaning Windows, right?
Gates: DOS and Windows.
Mossberg: OK. But especially Windows in the '90s began to take off.
Gates: By 1995, Windows became popular. The big debate wasn't sort of Mac versus
Windows. The big debate was character mode interface versus graphics mode interface.
And when the [Intel] 386 came and we got more memory and the speed was adequate
and some development tools came along, that paradigm bet on GUI paid off for everybody
who'd gotten in early and said, you know, this is the way that's going to go.
Mossberg: But Apple wasn't able to leverage its products?
Gates: After the 512K Mac was done, the product line just didn't evolve as fast—Jobs
wasn't there—as it needed to. And we were actually negotiating a deal to invest and make
some commitments and things with [former Apple CEO] Gil Amelio. No, seriously.
Swisher: Don't be mean to him.
Gates: I'm sorry?
Swisher: Just saying the word Gil Amelio, you can see his ...
Gates: So I was calling him up on the weekend and all this stuff, and next thing I knew,
Jobs called me up and said, don't worry about that negotiation with Gil Amelio. You can just
talk to me now. And I said, "Wow."
Jobs: Gil was a nice guy, but he had a saying. He said, "Apple is like a ship with a hole in
the bottom leaking water and my job is to get the ship pointed in the right direction."
Mossberg: Meanwhile, through all this—I want to get back to the thing we saw in 1997
at Macworld there—but Windows was just going great guns. I mean, Windows 95, to
whatever extent earlier versions of Windows had not had all the features, all the GUI
stuff that the Mac had, and Windows 95 really was an enormous, enormous leap.
Gates: Yeah. Windows 95 is when graphics interface became mainstream and when the
software industry realized, wow, this is the way applications are going to be done. And it
was amazing that it was ridiculed sort of in '93, '94, was not mainstream, and then in '95,
the debate was over. It was kind of just a commonsense thing. And it was a combination
of hardware and software maturity getting to a point that people could see it.
Mossberg: So I don't want to go through every detail, the whole history of how you
came back, but ...
Jobs: Thank you.
Mossberg: But you in that video we all saw, you said you had decided that it was
destructive to have this competition with Microsoft. Now, obviously, Apple was in a lot of
trouble, and I presume that there was some tactical or strategic reason for that, as well as
just wanting to be a nice guy, right?
Jobs: You know, Apple was in very serious trouble. And what was really clear was that
if the game was a zero-sum game where for Apple to win, Microsoft had to lose, then Apple
was going to lose. But a lot of people's heads were still in that place.
Swisher: Why was that, from your perspective?
Jobs: Well, a lot of people's heads were in that place at Apple and even in the customer
base because, you know, Apple had invented a lot of this stuff and Microsoft was being
successful and Apple wasn't, and there was jealousy and this and that. There was just a
lot of reasons for it that don't matter. But the net result of it was, was there were too
many people at Apple and in the Apple ecosystem playing the game of: for Apple to win,
Microsoft has to lose. And it was clear that you didn't have to play that game because
Apple wasn't going to beat Microsoft. Apple didn't have to beat Microsoft. Apple had to
remember who Apple was because they'd forgotten who Apple was. So to me, it was pretty
essential to break that paradigm. And it was also important that, you know, Microsoft was
the biggest software developer outside of Apple developing for the Mac. So it was just crazy
what was happening at that time. And Apple was very weak, and so I called Gates up and
we tried to patch things up.
Gates: And since that time, we've had a team that's fairly dedicated to doing the Mac
applications and they've always been treated kind of in a unique way so that they can have
a pretty special relationship with Apple. And that's worked out very well. In fact, every
couple years or so, there's been something new that we've been able to do on the Mac and
it's been a great business for us.
Jobs: And it's actually—the relationship between the Mac development team at Microsoft
and Apple is a great relationship. It's one of our best developer relationships.
Swisher: And do you look at yourselves as rivals now? Today as the landscape has
evolved—and we'll talk about the Internet landscape and everything else and other
companies that have [gone] forward, but how do you look at yourselves in this landscape
today?
Mossberg: Because, I mean, you are competitors in certain ways, which is the
American way right?way right?
Swisher: We watch the commercials, right?
Mossberg: And you get annoyed at each other from time to time.
Swisher: Although you know what? I have to confess, I like PC guy.
Mossberg: Yeah, he's great.
Swisher: Yeah, I like him. The young guy, I want to pop him.
Jobs: The art of those commercials is not to be mean, but it's actually for the guys
to like each other. Thanks. PC guy is great. Got a big heart.
Gates: His mother loves him.
Jobs: His mother loves him.
Swisher: I'm telling you, I like PC guy totally much better.
Jobs: Wow.
Swisher: I do. I don't know why. He's endearing. The other guy's a jackass.
Jobs: PC guy's what makes it all work, actually.
Mossberg: All right.
Jobs: It's worth thinking about.
Swisher: So how do you look at yourselves?
Mossberg: I mean, let me just ask you, Gates. Obviously, Microsoft is a much
larger company, you're in many more markets, many more types of products than
Apple is. You know, when you were running the company or when Jobs
[or Microsoft CEO Steve] Ballmer is running the company, you think obviously about
Google, you think about, I don't know, Linux in the enterprise, you think about
Sony in the game area. How often is Apple on your radar screen at Microsoft in a
business sense?
Gates: Well, they're on the radar screen as an opportunity. In a few cases like the
Zune, if you go over to that group, they think of Apple as a competitor. They love the fact
that Apple's created a gigantic market, and they're going to try and come in and
contribute something to that.
Jobs: And we love them because they're all customers.
Mossberg: I have to tell you, I was actually told by [Microsoft executive] J Allard,
I'm serious, that because of the nature of the processor, the development platform they
used to develop a lot of the software for the Xbox 360 was Macs. And he claimed that at
one point, they had, like, placed the biggest order for whatever the Mac tower was at the
time of anybody, and it was Microsoft.
Gates: I don't know if it was the biggest, but, yeah, we had the same processor
essentially that the Mac had. This is one of those great ironies is they were switching away
from that processor while the Xbox 360 was adopting it. But for good reasons, actually,
in both cases. Because we're not in a portable application and that was one of the things
that that processor road map didn't have. But yes, it shows pragmatism, but we try and do
things that way. So that was the development system for the early people getting their
software ready for the introduction of Xbox 360.
Jobs: And we never ran an ad on that.
Mossberg: I see. Admirable restraint. That's wonderful restraint.
Jobs: There were hundreds of them.
Gates: Jobs is so known for his restraint.
Swisher: How do you look at Microsoft from an Apple perspective? I mean, you
compete in computers and ...
Mossberg: I mean, you can say you don't compete, you know, the era of destructive
whatever, whatever you said in 1997, but you think—you're consciously aware of what
they're doing with Windows, you followed Vista closely, I think.
Jobs: You know, what's really interesting is—and we talked about this earlier today—
if you look at the reason that the iPod exists and the Apple is in that marketplace, it's
because these really great Japanese consumer-electronics companies who kind of own
the portable music market, invented it and owned it, couldn't do the appropriate software,
couldn't conceive of and implement the appropriate software. Because an iPod's really just
software. It's software in the iPod itself, it's software on the PC or the Mac, and it's software
in the cloud for the store. And it's in a beautiful box, but it's software. If you look at what a
Mac is, it's OS X, right? It's in a beautiful box, but it's OS X. And if you look at what an iPhone
will hopefully be, it's software. And so the big secret about Apple, of course—not-so-big
secret maybe—is that Apple views itself as a software company and there aren't very many
software companies left, and Microsoft is a software company. And so, you know, we look at
what they do and we think some of it's really great, and we think a little bit of it's competitive
and most of it's not. You know, we don't have a belief that the Mac is going to take over
80 percent of the PC market. You know, we're really happy when our market share goes up
a point and we love that and we work real hard at it, but Apple's fundamentally a software
company and there's not a lot of us left and Microsoft's one of them.
Mossberg: But you may be fundamentally a software company, but you've been known,
at least to your customers and to most journalists as the company that kind of pays a lot of
attention to integrating software and hardware. Microsoft has made some recent moves to
be a little more like that, obviously not in your core biggest businesses, but with Xbox and
Zune and, you know, the Surface computing device we saw today is another example.
These aren't markets that hold up in size to Windows or Office, but they're some of your
more recent initiatives. Are the companies' approaches to this merging a little or ...
Jobs: Alan Kay had a great quote back in the '70s, I think. He said, "People that love
software want to build their own hardware."
Mossberg: Well, Gates loves software.
Jobs: Oh, I can resist that.
Gates: The question is, are there markets where the innovation and variety you get is
a net positive? The negative is that in the early stage, you really want to do the two
together so you want to do prototyping and things like that, you know, really as one thing.
And then take the phone market. We think we're on 140 different kinds of hardware.
We think it's beneficial to us that even if we did a few ourselves, it wouldn't give us what
we have through those partnerships. Likewise, if you take the robotics market, very
undeveloped. We have over 140 tiny-volume robots using Microsoft software. And the
creativity, building toys, security things, medical things, we love the innovation and the
ecosystem that's going to grow up—who knows when, but we're patient—around that
and we'll have a great asset with this robotic software platform. So there are things like
PC, phone, and robot where the Microsoft choice is to go for the variety. Apple, it's great.
For them, they do what works super well for them. And there's a few markets like Xbox 360,
Zune, and this year we have two new ones, the Surface thing and this RoundTable, which is
the meeting-room thing, where we'll actually, through subcontractors, but the P&L on the
risk and all that for the hardware, the design is completely a Microsoft thing.
________________________________
Microsoft chairman Bill Gates and Apple CEO Steve Jobs sat down together for an interview
at the fifth annual All Things Digital Conference. The two technology pioneers and fierce
competitors, after all, hadn't exactly been sending each other mash notes lately. Gates had
complained to NEWSWEEK in January about Apple's television ad campaign that unfavorably
compare PCs to Macs, asking rhetorically if being cool meant you didn't have to tell the truth.
And just a few hours before their evening meeting at the Carlsbad, Calif., conference, Jobs
was taking swipes at Microsoft. When Apple wrote its iTunes application for Windows, he told
attendees earlier that day, "it was like offering glasses of ice water to people in hell."
But when the original PC and Mac guys finally appeared together to take questions from
The Wall Street Journal's Walt Mossberg and Kara Swisher, what unfolded was more love fest
than spitting match. Jobs and Gates have known each other for 30 years and worked both as
collaborators (particularly when Microsoft was a key developer for the original Macintosh in
the early 1980s) and rivals. Though there were a few barbs, what emerged was a mutual
respect and, yes, affection. Afterward, there was general agreement among spectators that
the conversation was not only a historic moment but an emotional milestone in the technology
industry's history. And, as you can see in this partial transcript courtesy of The Wall Street
Journal (the full transcript is available on the Journal's Web site), Gates and Jobs, at the
urging of their questioners, each offered a unique analysis of the tech world, intriguing
speculation about the future—and a few laughs, as well.
Kara Swisher: So let's get started. I wanted to ask, there's been a lot of
mano-a-mano/catfight kind of thing in a lot of the blogs and the press and stuff like that,
and we wanted to—the first question I was interested in asking is what you think each has
contributed to the computer and technology industry, starting with you, Jobs, for Gates, and
vice versa.
Steve Jobs: Well, you know, Gates built the first software company in the industry, and
I think he built the first software company before anybody really in our industry knew what a
software company was, except for these guys. And that was huge. That was really huge. And
the business model that they ended up pursuing turned out to be the one that worked really
well, you know, for the industry. I think the biggest thing was, Gates was really focused on
software before almost anybody else had a clue that it was really the software.
Swisher: Was important?
Jobs: That's what I see. I mean, a lot of other things you could say, but that's the
high-order bit. And I think building a company's really hard, and it requires your greatest
persuasive abilities to hire the best people you can and keep them at your company and keep
them working, doing the best work of their lives, hopefully. And Gates's been able to stay
with it for all these years.
Walter Mossberg: Gates, how about the contribution of Jobs and Apple?
Bill Gates: Well, first, I want to clarify: I'm not Fake Steve Jobs … What Jobs's done is
quite phenomenal, and if you look back to 1977, that Apple II computer, the idea that it would
be a mass-market machine, you know, the bet that was made there by Apple uniquely—there
were other people with products, but the idea that this could be an incredible empowering
phenomenon, Apple pursued that dream. Then one of the most fun things he did was the
Macintosh, and that was so risky. People may not remember that Apple really bet the company.
[The Apple] Lisa [computer] hadn't done that well, and some people were saying that general
approach wasn't good, but the team that Jobs built even within the company to pursue that,
even some days it felt a little ahead of its time—I don't know if you remember that Twiggy
disk drive.…
Jobs: One-hundred-twenty-eight K….
Swisher: Oh, the Twiggy disk drive, yes.
Gates: Jobs gave a speech once, which is one of my favorites, where he talked about,
in a certain sense, we build the products that we want to use ourselves. And so he's really
pursued that with incredible taste and elegance that has had a huge impact on the industry.
And his ability to always come around and figure out where that next bet should be has been
phenomenal. Apple literally was failing when Jobs went back and reinfused the innovation
and risk-taking that have been phenomenal. So the industry's benefited immensely from
his work. We've both been lucky to be part of it, but I'd say he's contributed as much as
anyone.
Jobs: We've also both been incredibly lucky to have had great partners that we started
the companies with and we've attracted great people. I mean, so everything that's been done
at Microsoft and at Apple has been done by just remarkable people, none of which are sitting
up here today.
Swisher: Well, not us.
Mossberg: Not us. So in a way, you're the stand-ins for all those other people.
Jobs: Yeah, in a way, we are. In a very tangible way.
Mossberg: So Gates mentioned the Apple II and 1977 and 30 years ago. And there were
a couple of other computers which were aimed at the idea that average people might be able
to use them, and looking back on it, a really average-average person might not have been
able to use them by today's standards, but it certainly broadened the base of who could use
computers. I actually looked at an Apple ad from 1978. It was a print ad. That shows you
how ancient it was. And it said: thousands of people have discovered the Apple computer.
Thousands of people. And it also said, you don't want to buy one of these computers where
you put a cartridge in. I think that was a reference to one of the Atari[s] or something.
Jobs: Oh, no.
Mossberg: You want a computer you can write your own programs on. And obviously,
people still do.
Jobs: We had some very strange ads back then. We had one where it was in a kitchen a
nd there was a woman that looked like the wife, and she was typing in recipes on the
computer with the husband looking on approvingly in the back. Stuff like that.
Mossberg: How did that work for you?
Jobs: I don't think well.
Mossberg: I know you started Microsoft prior to 1977. I think Apple started the year
before, in '76.
Jobs: … '76.
Mossberg: Microsoft in ...
Gates: … '74 was when we started writing BASIC. Then we shipped the BASIC in '75.
Mossberg: Some people here, but I don't think most people, know that there was
actually some Microsoft software in that Apple II computer. You want to talk about what
happened there, how that occurred?
Gates: Yeah. There had been the Altair and a few other companies—actually, about 24—
that had done various machines, but the '77 group included the PET, TRS-80 ...
Mossberg: Commodore?
Gates: Yeah, the Commodore PET, TRS-80 and the Apple II. The original Apple II BASIC,
the Integer BASIC, we had nothing to do with. But then there was a floating-point one where—
and I mostly worked with Woz on that.
Jobs: Let me tell the story. My partner we started out with, this guy named Steve Wozniak.
Brilliant, brilliant guy. He writes this BASIC that is, like, the best BASIC on the planet. It does
stuff that no other BASIC's ever done. You don't have to run it to find your error messages.
It finds them when you type it in and stuff. It's perfect in every way, except for one thing,
which is it's just fixed-point, right? It's not floating-point. So we're getting a lot of input that
people want this BASIC to be floating-point. And, like, we're begging Woz, please, please
make this floating-point.
Mossberg: Who's we? How many people are in Apple?
Jobs: Well, me. We're begging Woz to make this floating-point and he just never does it.
You know, and he wrote it by hand on paper. I mean, you know, he didn't have an assembler
or anything to write it with. It was all just written on paper and he'd type it in. He just never
got around to making it floating-point.
Swisher: Why?
Jobs: This is one of the mysteries of life. I don't know, but he never did. So, you know,
Microsoft had this very popular, really good floating-point BASIC that we ended up going
to them and saying "help."
Mossberg: And how much was the—I think you were telling us earlier ...
Gates: Oh, it was $31,000.
Mossberg: That Apple paid you for the ...
Gates: For the floating-point BASIC. And I flew out to Apple, I spent two days there
getting the cassette. The cassette tapes were the main ways that people stored things at
the time, right? And, you know, that was fun. I think the most fun is later when we worked
together.
Mossberg: What was the most fun? Tell the story about the most fun that was later.
Swisher: Or maybe later, not the most fun.
Mossberg: Let them talk.
Swisher: Teasing.
Gates: Well, you know, Jobs can probably start it better. The team that was assembled
there to do the Macintosh was a very committed team. And there was an equivalent team on
our side that just got totally focused on this activity. Jeff Harbers, a lot of incredible people.
And we had really bet our future on the Macintosh being successful, and then, hopefully,
graphics interfaces in general being successful, but first and foremost, the thing that would
popularize that being the Macintosh. So we were working together. The schedules were
uncertain. The quality was uncertain. The price. When Jobs first came up, it was going to be
a lot cheaper computer than it ended up being, but that was fine.
Swisher: So you worked in both places?
Gates: Well, we were in Seattle and we'd fly down there.
Mossberg: But Microsoft, if I remember correctly from what I've read, wasn't Microsoft
one of the few companies that were allowed to even have a prototype of the Mac at the time?
Jobs: Yeah. What's interesting, what's hard to remember now is that Microsoft wasn't in
the applications business then. They took a big bet on the Mac because this is how they got
into the apps business. Lotus dominated the apps business on the PC back then.
Gates: Right. We'd done just MultiPlan, which was a hit on the Apple II, and then Mitch
[Kapor of Lotus Development] did an incredible job betting on the IBM PC and 1-2-3 came
in and, you know, ruled that part of the business. So the question was, what was the next
paradigm shift that would allow for an entry? We had Word, but WordPerfect was by far
the strongest in word processing…..
Mossberg: And Word was kind of a DOS text ...
Gates: All of these products I'm saying were DOS-based products.
Mossberg: Right.
Gates: Because Windows wasn't in the picture at the time.
Mossberg: Right.
Gates: That's more early '90s that we get to that. So we made this bet that the
paradigm shift would be graphics interface and, in particular, that the Macintosh would
make that happen with 128K of memory, 22K of which was for the screen buffer, 14K was
for the operating system. So it was ...
Mossberg: Fourteen K?
Gates: Yeah.
Mossberg: The original Mac operating system was 14K?
Gates: Fourteen K that we had to have loaded when our software ran. So when the shell
would come up, it had all the 128K.
Jobs: The OS was bigger than 14K. It was in the 20s somewhere.
Mossberg: I see.
Jobs: We ship these computers now with, you know, a gigabyte, 2 gigabytes of memory,
and nobody remembers 128K.
Mossberg: I remember that. I remember paying a lot of money for computers with 128K
in those days. So the two companies worked closely on the Mac project because you were
maybe not the only but the principal or one of the principal software creators for it, is that
right?
Jobs: Well, Apple did the Mac itself, but we got Gates and his team involved to write these
applications. We were doing a few apps ourselves. We did MacPaint, MacDraw and stuff like
that, but Gates and his team did some great work.
Swisher: Now, in terms of moving forward after you left and your company grew more
and more strong, what did you think was going to happen to Apple after sort of the disasters
that occurred after Jobs left?
Gates: Well, Apple, they hung in the balance. We continued to do Macintosh software.
Excel, which Jobs and I introduced together in New York City, that was kind of a fun event,
that went on and did very well. But then, you know, Apple just wasn't differentiating itself
well enough from the higher-volume platform.
Mossberg: Meaning Windows, right?
Gates: DOS and Windows.
Mossberg: OK. But especially Windows in the '90s began to take off.
Gates: By 1995, Windows became popular. The big debate wasn't sort of Mac versus
Windows. The big debate was character mode interface versus graphics mode interface.
And when the [Intel] 386 came and we got more memory and the speed was adequate
and some development tools came along, that paradigm bet on GUI paid off for everybody
who'd gotten in early and said, you know, this is the way that's going to go.
Mossberg: But Apple wasn't able to leverage its products?
Gates: After the 512K Mac was done, the product line just didn't evolve as fast—Jobs
wasn't there—as it needed to. And we were actually negotiating a deal to invest and make
some commitments and things with [former Apple CEO] Gil Amelio. No, seriously.
Swisher: Don't be mean to him.
Gates: I'm sorry?
Swisher: Just saying the word Gil Amelio, you can see his ...
Gates: So I was calling him up on the weekend and all this stuff, and next thing I knew,
Jobs called me up and said, don't worry about that negotiation with Gil Amelio. You can just
talk to me now. And I said, "Wow."
Jobs: Gil was a nice guy, but he had a saying. He said, "Apple is like a ship with a hole in
the bottom leaking water and my job is to get the ship pointed in the right direction."
Mossberg: Meanwhile, through all this—I want to get back to the thing we saw in 1997
at Macworld there—but Windows was just going great guns. I mean, Windows 95, to
whatever extent earlier versions of Windows had not had all the features, all the GUI
stuff that the Mac had, and Windows 95 really was an enormous, enormous leap.
Gates: Yeah. Windows 95 is when graphics interface became mainstream and when the
software industry realized, wow, this is the way applications are going to be done. And it
was amazing that it was ridiculed sort of in '93, '94, was not mainstream, and then in '95,
the debate was over. It was kind of just a commonsense thing. And it was a combination
of hardware and software maturity getting to a point that people could see it.
Mossberg: So I don't want to go through every detail, the whole history of how you
came back, but ...
Jobs: Thank you.
Mossberg: But you in that video we all saw, you said you had decided that it was
destructive to have this competition with Microsoft. Now, obviously, Apple was in a lot of
trouble, and I presume that there was some tactical or strategic reason for that, as well as
just wanting to be a nice guy, right?
Jobs: You know, Apple was in very serious trouble. And what was really clear was that
if the game was a zero-sum game where for Apple to win, Microsoft had to lose, then Apple
was going to lose. But a lot of people's heads were still in that place.
Swisher: Why was that, from your perspective?
Jobs: Well, a lot of people's heads were in that place at Apple and even in the customer
base because, you know, Apple had invented a lot of this stuff and Microsoft was being
successful and Apple wasn't, and there was jealousy and this and that. There was just a
lot of reasons for it that don't matter. But the net result of it was, was there were too
many people at Apple and in the Apple ecosystem playing the game of: for Apple to win,
Microsoft has to lose. And it was clear that you didn't have to play that game because
Apple wasn't going to beat Microsoft. Apple didn't have to beat Microsoft. Apple had to
remember who Apple was because they'd forgotten who Apple was. So to me, it was pretty
essential to break that paradigm. And it was also important that, you know, Microsoft was
the biggest software developer outside of Apple developing for the Mac. So it was just crazy
what was happening at that time. And Apple was very weak, and so I called Gates up and
we tried to patch things up.
Gates: And since that time, we've had a team that's fairly dedicated to doing the Mac
applications and they've always been treated kind of in a unique way so that they can have
a pretty special relationship with Apple. And that's worked out very well. In fact, every
couple years or so, there's been something new that we've been able to do on the Mac and
it's been a great business for us.
Jobs: And it's actually—the relationship between the Mac development team at Microsoft
and Apple is a great relationship. It's one of our best developer relationships.
Swisher: And do you look at yourselves as rivals now? Today as the landscape has
evolved—and we'll talk about the Internet landscape and everything else and other
companies that have [gone] forward, but how do you look at yourselves in this landscape
today?
Mossberg: Because, I mean, you are competitors in certain ways, which is the
American way right?way right?
Swisher: We watch the commercials, right?
Mossberg: And you get annoyed at each other from time to time.
Swisher: Although you know what? I have to confess, I like PC guy.
Mossberg: Yeah, he's great.
Swisher: Yeah, I like him. The young guy, I want to pop him.
Jobs: The art of those commercials is not to be mean, but it's actually for the guys
to like each other. Thanks. PC guy is great. Got a big heart.
Gates: His mother loves him.
Jobs: His mother loves him.
Swisher: I'm telling you, I like PC guy totally much better.
Jobs: Wow.
Swisher: I do. I don't know why. He's endearing. The other guy's a jackass.
Jobs: PC guy's what makes it all work, actually.
Mossberg: All right.
Jobs: It's worth thinking about.
Swisher: So how do you look at yourselves?
Mossberg: I mean, let me just ask you, Gates. Obviously, Microsoft is a much
larger company, you're in many more markets, many more types of products than
Apple is. You know, when you were running the company or when Jobs
[or Microsoft CEO Steve] Ballmer is running the company, you think obviously about
Google, you think about, I don't know, Linux in the enterprise, you think about
Sony in the game area. How often is Apple on your radar screen at Microsoft in a
business sense?
Gates: Well, they're on the radar screen as an opportunity. In a few cases like the
Zune, if you go over to that group, they think of Apple as a competitor. They love the fact
that Apple's created a gigantic market, and they're going to try and come in and
contribute something to that.
Jobs: And we love them because they're all customers.
Mossberg: I have to tell you, I was actually told by [Microsoft executive] J Allard,
I'm serious, that because of the nature of the processor, the development platform they
used to develop a lot of the software for the Xbox 360 was Macs. And he claimed that at
one point, they had, like, placed the biggest order for whatever the Mac tower was at the
time of anybody, and it was Microsoft.
Gates: I don't know if it was the biggest, but, yeah, we had the same processor
essentially that the Mac had. This is one of those great ironies is they were switching away
from that processor while the Xbox 360 was adopting it. But for good reasons, actually,
in both cases. Because we're not in a portable application and that was one of the things
that that processor road map didn't have. But yes, it shows pragmatism, but we try and do
things that way. So that was the development system for the early people getting their
software ready for the introduction of Xbox 360.
Jobs: And we never ran an ad on that.
Mossberg: I see. Admirable restraint. That's wonderful restraint.
Jobs: There were hundreds of them.
Gates: Jobs is so known for his restraint.
Swisher: How do you look at Microsoft from an Apple perspective? I mean, you
compete in computers and ...
Mossberg: I mean, you can say you don't compete, you know, the era of destructive
whatever, whatever you said in 1997, but you think—you're consciously aware of what
they're doing with Windows, you followed Vista closely, I think.
Jobs: You know, what's really interesting is—and we talked about this earlier today—
if you look at the reason that the iPod exists and the Apple is in that marketplace, it's
because these really great Japanese consumer-electronics companies who kind of own
the portable music market, invented it and owned it, couldn't do the appropriate software,
couldn't conceive of and implement the appropriate software. Because an iPod's really just
software. It's software in the iPod itself, it's software on the PC or the Mac, and it's software
in the cloud for the store. And it's in a beautiful box, but it's software. If you look at what a
Mac is, it's OS X, right? It's in a beautiful box, but it's OS X. And if you look at what an iPhone
will hopefully be, it's software. And so the big secret about Apple, of course—not-so-big
secret maybe—is that Apple views itself as a software company and there aren't very many
software companies left, and Microsoft is a software company. And so, you know, we look at
what they do and we think some of it's really great, and we think a little bit of it's competitive
and most of it's not. You know, we don't have a belief that the Mac is going to take over
80 percent of the PC market. You know, we're really happy when our market share goes up
a point and we love that and we work real hard at it, but Apple's fundamentally a software
company and there's not a lot of us left and Microsoft's one of them.
Mossberg: But you may be fundamentally a software company, but you've been known,
at least to your customers and to most journalists as the company that kind of pays a lot of
attention to integrating software and hardware. Microsoft has made some recent moves to
be a little more like that, obviously not in your core biggest businesses, but with Xbox and
Zune and, you know, the Surface computing device we saw today is another example.
These aren't markets that hold up in size to Windows or Office, but they're some of your
more recent initiatives. Are the companies' approaches to this merging a little or ...
Jobs: Alan Kay had a great quote back in the '70s, I think. He said, "People that love
software want to build their own hardware."
Mossberg: Well, Gates loves software.
Jobs: Oh, I can resist that.
Gates: The question is, are there markets where the innovation and variety you get is
a net positive? The negative is that in the early stage, you really want to do the two
together so you want to do prototyping and things like that, you know, really as one thing.
And then take the phone market. We think we're on 140 different kinds of hardware.
We think it's beneficial to us that even if we did a few ourselves, it wouldn't give us what
we have through those partnerships. Likewise, if you take the robotics market, very
undeveloped. We have over 140 tiny-volume robots using Microsoft software. And the
creativity, building toys, security things, medical things, we love the innovation and the
ecosystem that's going to grow up—who knows when, but we're patient—around that
and we'll have a great asset with this robotic software platform. So there are things like
PC, phone, and robot where the Microsoft choice is to go for the variety. Apple, it's great.
For them, they do what works super well for them. And there's a few markets like Xbox 360,
Zune, and this year we have two new ones, the Surface thing and this RoundTable, which is
the meeting-room thing, where we'll actually, through subcontractors, but the P&L on the
risk and all that for the hardware, the design is completely a Microsoft thing.
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Steve Jobs and Bill Gates
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