Apple ended 1996 on a high note with the triumphant return of ousted co-founder Steve Jobs, now cast in the role of corporate saviour. But with the Mac World trade show due to kick off in San Francisco next week, the reinvention of Apple is far from over.
Just before Christmas, Apple chairman Gil Amelio called a hurried press conference at corporate headquarters in Cupertino, which put an end to months of speculation about the future direction of the company?s operating systems strategy.
It had been widely expected that, following the collapse of its internal Copeland project, Apple would turn to Californian start-up Be Software for replacement next generation technology. An announcement of a buy-out or at the very least a licensing deal for the Be OS was presumed to be the planned centrepiece of next week?s Mac World conference and exhibition.
But in the week before Christmas astonishing rumours began to circulate in Silicon Valley: Steve Jobs, the mercurial pioneer who had co-founded Apple, been ousted in a management tussle and spent years bad-mouthing the company, might be about to return.
The rumours scarcely had time to sink in before Amelio made them official. Jobs would indeed be returning to Apple as special advisor to the chairman. More than that, Apple would pay out $400 million - $350 million in cash and $50 million in retired debt - to acquire Next Software, the company Jobs set up when he left.
The Be deal was off once and for all, apparently felled by demands for a seat on the Apple board from its chairman Jean Louis Gassee and continued wrangling over the asking price. "We picked Plan A instead of Plan Be," joked Amelio at the press conference, where he was joined on stage by Jobs, who clearly revelled in his role as the centre of attention.
"The time has come for new innovation," he declared. "And where better than Apple for this to spring from? I still have very deep feelings for Apple and it gives me great joy to play a role in architecting its future."
Those "deep feeling" have not prevented Jobs from voicing his criticism of Apple?s prospects in recent months. In the 11 years since his forced departure from the company he set up in his parents' garage, he has done little to conceal his bitterness and his flair for ebullient marketing has ensured that his views have always been heard.
So how did he end up back in the Apple fold? The answer to that really lies not with Jobs or Amelio, but with Apple chief technology officer Ellen Hancock and her decision to return a phone call from some middle managers at Next Software.
Hancock joined Apple last year with a reputation as a highly conservative, bureaucratic manager, hardly surprising with a track record that included 28 years at IBM. Her style did not appear to sit well with the relaxed, campus-style Apple corporate culture and at first she seemed an unlikely candidate.
But Apple needed more discipline and Hancock was not afraid to make brave decisions, the most significant of which was to look at the progress of its Copeland operating system project and put it out of its misery straight away. In so doing, she set in motion a search for replacement technology and that effectively meant looking outside Apple.
"Contrary to the Apple way we were not going to be too proud to look outside the company for technology," explained Hancock. The hot prospect quickly became Be, branchild of former Apple research and development chief Gassee. But as takeover negotiations became bogged down over price, Hancock?s attentions drifted away.
With the Be talks stalled, increasingly desperate options were considered, including, according to some senior Apple executives, licensing Sun?s Solaris or even Microsoft?s NT. But Hancock was not keen on the idea of licensing technology that would become the central plank of Apple?s future - Apple had to own it.
The breakthrough came in mid-November when Hancock returned a speculative phone call from two Next engineers who suggested that if she was on the look-out for an operating system, why didn?t she consider Nextstep? To the surprise of the engineers, Hancock immediately set in motion talks between the two companies.
All parties insist that Jobs was unaware of his employees' call to Hancock, but the circumstances were certainly fortuitous for Next, whose Nextstep object oriented software was highly regarded in the industry, but not widely used. The company was privately held by Jobs and his employees, with small stakes held by Canon and Ross Perot.
The harsh reality was that Nextstep was loved by its customers, but there just weren?t enough of them to make the company into the Apple rival that Jobs had initially envisaged. Its hardware division was closed down in the early 1990s after its terminals proved too expensive.
New York investment bankers Goldman Sachs had been hired by Jobs to prepare a flotation for the firm, which was reporting revenues of around $50 million a year. But a potential Apple acquisition was a far more attractive option: it would provide liquidity and give Nextstep a mass audience that it had been denied until now.
But to everyone?s surprise, the mercurial Jobs proved to be no problem at all. He did not demand a seat on the Apple board, nor was he interested in becoming head of Apple?s software development. Instead he accepted the ill-defined post of special advisor to Amelio, a position which he is keen to emphasise is part time.
But will it work? Jobs is notorious for his hands-on management style and his phenomenally high expectations. He is also known for being rebellious, outspoken and essentially difficult to work with or for. With his track record, clashes of style and personality with the conservative Hancock and Amelio cannot be ruled out.
To date, the official line is: no problem. "So far I have only seen the nice Steve," said Hancock. "Of course, I?ve read about the other side, but I think things are going to work out fine. Steve is the visionary. I consider myself a general manager. I?m good at seeing that projects get out the door."
In practice, the Jobs factor may not be as significant as it might first appear. Apple is a very different company to the one he left. Most of his former colleagues are gone, so there is no power base of old retainers. Most importantly, Apple has spent more time without Jobs at the helm than it did with him there.
There are other considerations that need to be tackled though. To date there has been no detail given about the technicalities of the merger and its implications for the future of the Mac OS. Some of these will become clearer at Mac World, promised Amelio, who refused to be pressured into making any further comments.
One of the advantages that Nextstep has over the Be OS is that there is an existing catalogue of available applications written for it. In addition, Nextstep can run Mac OS applications using a third party product called Executor from New Mexico developer ARDI, although at present this emulates only System 6 and would require work to bring it up to System 7.5.
But users will also need to know if the combined Next/Apple operating system will run on currently available Macs. Given that it?s going to take at least a year to get the merged operating system out the door, any equivocation on this issue is likely to result in a drying up of purchases of Apple hardware for the foreseeable future.
When Amelio, Hancock and Jobs take to the stage at Mac World next week, they are assured of a rapturous reception from the Mac faithful. But the real challenge for the triumverate is only just beginning. "The key is to convince developers of innovative new software products that they can make those products run best or only on you operating system," admitted Jobs.
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