The Steve Jobs deal with Michael Dell that could have changed Apple and technology history

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In the ten years since Steve Jobs died on October 5, 2011, the iPhone, Mac, and iPad have all helped make Apple one of the most valuable companies in the world. Over a billion people today are making Apple’s technology a part of their everyday lives.

It’s a big change from 1997 when Jobs sought help after returning as interim CEO to an Apple that was months before bankruptcy and was known to receive a cash investment of $ 150 million from Microsoft and Bill Gates and Microsoft’s Internet Explorer popular Netscape Navigator browser gave a boost. Less known, however, is that Jobs also attempted to strike a deal with Michael Dell and his eponymous PC company, which could have changed the course of Apple and technology history forever.

In a memoir called Play Nice But Win released this week, Dell talks about his adolescent infatuation with the Apple II; about meeting Jobs, who was 10 years older than him, in a computer user group; and about the partnership that never existed: Jobs wanted Dell to license the Mac operating system – Mac OS X – and ship it to Dell’s fast-selling, low-cost Intel-based PCs. And although the media portrays the two as arch rivals, Dell says he and Jobs have become good friends and helped popularize consumer electronics devices like smartphones.

“Anyone who wants to do something great has to have a slightly different and unconventional approach,” said Dell, 56, in an interview when asked Legacy of Jobs. “You can’t follow the rules and make amazing things happen. Steve was certainly extraordinary in that regard.”

Meeting with Steve Jobs

Dell’s fascination with technology began when he was a kid, he tells me, playing with his father’s slide rules and adding machine – “it used to make this incredible sound every time it rolled through” – before getting a National Semiconductor- Computer bought when he was just 8 years old. “I loved math and I loved that idea of ​​a adding machine,” he says.

While he was taking a math class at his Houston public middle school, the school happened to get a teletype terminal. “It was just amazing to me that you could write programs. It was the beginning of the PC age, ”says Dell. “The idea of ​​having your own computer and being able to program it was just the coolest thing I could think of, and that’s what started me.”

Portfolio / penguin

This fascination led to the beginning of his “Steve Jobs story”. In 1979, when he was 14 years old, he begged his parents to buy him an Apple II, which he remembers was $ 1,298 at the time. After it arrived, Dell unpacked a “beautiful computer” that it called a “beautiful computer – it even smelled beautiful” – and then immediately took it apart to see how it worked.

“I think you have to take something apart to understand it,” he says. “I wanted to understand everything about how this machine worked. The great thing about the Apple II back then was that each of the chips was clearly labeled and you could understand exactly what it was. Chip worked. … I ate everything. “

At 15, Dell says he saw Jobs not only as a computer pioneer but also as an entrepreneur – after meeting the co-founder of Apple in the spring of 1980, when Jobs was 25 years old at the time and was part of the Houston-based computer user group Dell.

“Personal jobs were even more compelling than printed ones. When he walked into the room at our meeting, it was like the water parted, ”writes Dell in Play Nice But Win. “He spoke with passion about how the personal computer – his Personal computer – revolutionized the world. He spoke in lofty metaphors … He said – with his PCs – people would have the ability to accomplish the unimaginable. ”

Five years later, after Dell’s PC business took off in his dormitory, he met Jobs and called him a friend.

Fast forward to 1993. Jobs, ousted by Apple in 1985 after a dispute with the company’s board of directors, had started a new company called Next and called a nice (but expensive) workstation with its own operating system and software. created WebObjects for creating web-based applications. Dell says Jobs came to his Texas home several times this year to convince him to use the Next operating system on Dell PCs, arguing that it was better than Microsoft’s Windows software and that of Sun Microsystems could undermine the touted Unix workstation market. The problem, Dell told Jobs, was that there were no applications for it and no customer interest.

Still, Dell’s company worked a little with Next and used WebObjects to build its first online store in the mid-1990s.

In 1997, Jobs returned to a troubled Apple after acquiring Next for $ 429 million, and he suggested another business proposition to Dell (when Jobs was evaluating Apple’s Mac clone licensing project, which he eventually closed). Jobs and his team had ported the Mac software based on Next’s Mach operating system and ran it on the Intel x86 chips that powered Dell PCs. Jobs offered to license the Mac OS to Dell, telling him he could give PC buyers a choice between Apple’s software or Microsoft’s Windows operating system installed on their computer.

steve-jobs-with-imac-getty-images

After Michael Dell failed to partner, Jobs took Apple in his own direction and announced new computers, such as the colorful iMac in 1998.

John G. Mabanglo / Getty Images

“He said look at this – we have this Dell desktop and it is running Mac OS,” says Dell. “Why don’t you license the Mac OS?”

Dell thought this was a great idea and said Jobs would pay a license fee for every PC sold with Mac OS. But Jobs had a counter offer: He feared that the licensing program could undermine Apple’s own Mac computer sales because Dell computers were less expensive. Instead, according to Dell, Jobs suggested loading the Mac OS alongside Windows on every Dell PC and letting customers decide which software to use – and then paying Apple for every Dell PC sold.

Dell smiles as he tells the story. “The royalties he was talking about would be hundreds of millions of dollars, and the bill just didn’t work because most of our customers, especially larger business customers, didn’t really want the Mac operating system,” he writes. “Steve’s suggestion would have been interesting if we’d just said,” Okay, we’ll pay you every time we use the Mac OS “- but pay him for every time we do not use it … well, nice try Steve! “

Another problem: Jobs would not guarantee access to the Mac OS three, four or five years later, “even under the same bad conditions”. This could leave customers using Mac OS unhappy as the software evolved, leaving Dell Inc. unable to ensure they were supported.

However, Dell admits that the deal was a moment in history that could have been.

“It could have changed the way Windows and Mac OS did on PCs,” says Dell. “But obviously they went in a different direction.”

This other direction led Jobs to evolve the next-inspired Mac OS and redesign the Mac product line, including the addition of the candy-colored iMac in mid-1998. In October 2001, Jobs introduced the iPod Music Player, followed by the iPhone in January 2007, a move that solidified the company’s expansion into the consumer electronics market. Apple Computer Inc. changed its name to Apple Inc. on the day the iPhone was announced. The iPad appeared three years later.

“The archenemy of Apple”

Dell and Jobs argued over the years, but remained friends throughout – even after Dell quoted an industry conference in late October 1997 that led to it being viewed as “Apple’s archenemy.” Jobs, then only a few months at Apple, was still trying to get the company financially on track.

Dell was then asked what he would do to fix Apple if he were its CEO. After parrying the question twice, Dell finally replied in frustration, “What would I do? I would close the company and give the money back to the shareholders.” Dell says the comment is “stupid” and “unprofessional”.

The quote went viral and Jobs was clearly ticked. Dell writes: “He sent me an email that said, ‘CEOs should have class. I can see that you do not hold that opinion. ‘ So I called him. I explained the context in which I said what I said and what was on my mind at that moment. And he agreed to it. He seemed understanding. ”

But a few weeks later, Jobs used the quote to motivate his team. Jobs hosted a corporate event to showcase Apple’s new order-related manufacturing and distribution system and online store. He projected a large photo of Dell onto the screen behind him and elicited “funny boos” from the Apple employees. Jobs took a stab at Dell’s expense and told his team that Dell was “rude” and basically jealous of Apple’s efforts because Dell had pioneered contract manufacturing.

This is how Dell thinks of history today. “It’s hard to imagine today that Steve is gone and a hugely successful Apple is peacefully coexisting with a very successful Dell, but back then, ten years before the iPhone, Apple was truly an outsider who really fought for his life, just like us at that time had done in several places, “writes Dell. “It was seldom mentioned that the company was mentioned that didn’t start with phrases like“ in trouble ”or“ near bankruptcy. ”So Steve’s gloves were off at that point it was us. Even if Apple and Dell were really apples and oranges. “

“I would probably have done the same thing if I were in his place,” Dell tells me, adding this addendum to the story in Play Nice But Win: “If the company you founded is fighting for its life, you do anything it takes.”

Even so, the real or imagined Apple-Dell rivalry didn’t get in the way of their friendship, says Dell, commenting on Jobs’ legacy. “We need dreamers and idealists – people who have an incredible and difficult vision of how the future will come together – to move things forward.”


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