In a story that keeps getting stranger and stranger, Steve Jobs announced in his August keynote at Macworld Boston that Apple Computer Inc. and arch rival Microsoft Corp. were letting bygones be bygones and entering into a partnership. Jobs explained to his stunned followers, "We have to let go of this notion that for Apple to win Microsoft has to lose. For Apple to win, Apple has to do a really good job....So the era of setting this up as a competition between Apple and Microsoft is over, as far as I'm concerned."
According to the terms of the agreement, Microsoft will invest $150 million in non-voting Apple stock, which Microsoft agreed not to sell for three years. Both companies also agreed to a broad patent cross-licensing agreement for all patents that exist and that are filed within the next five years. This agreement effectively resolves the long-standing patent-infringement suit filed by Apple claiming that Microsoft Windows violates Apple's patents.
Another portion of the agreement involved Microsoft's commitment to the Macintosh platform. Microsoft agreed to develop and ship future versions of Microsoft Office, Internet Explorer, and other Microsoft tools for the Mac platform for another five years. Although skeptics say that Microsoft made this agreement to stave-off antitrust charges, Microsoft claims that it was simply looking for another platform for Microsoft applications.
In return, Apple will bundle the Microsoft Internet Explorer browser with the Macintosh OS, making it the default browser in future OS software releases. However, as Jobs put it in his speech, "Since we believe in choice, we're going to be shipping other Internet browsers on the Macintosh as well." By "other Internet browsers," which met with laughter and applause from the audience, he was mostly referring to the competing Netscape Communications Corp. Navigator browser.
Finally, and potentially the most dangerous of all, the two companies agreed to work together to ensure compatibility between their respective Java virtual machines. This arrangement has the potential to shut Sun Microsystems Inc., Netscape, and others out of the Java decision-making process altogether. As Jobs put it, "Apple plus Microsoft equals 100 percent of the desktop computer market. And so, whatever Apple and Microsoft agree to do, it's a standard."
There will still be challenges in maintaining these warm and fuzzy feelings between the two companies. For starters, the Apple board will have to contend with new board member ý and Oracle CEO ý Larry Ellison who has never been known to keep his anti-Microsoft sentiments to himself. Second, Apple is the single-largest education company in the world, and the company plans to invest the Microsoft cash infusion to further strengthen its education and creative content offerings. Meanwhile, however, Microsoft is making a strong push to win over that very same market. One speculation is that Microsoft will take advantage of the cross-patent agreement to "borrow" any advancements Apple makes in the education sector and use the very same technology to run straight over Apple.
Dwight B. Davis and Robbin Young made a good point in their article, "Apple's Fall from Eden," (Windows Watcher Online, August 6, 1997): It looks like Apple will try to target its upcoming Rhapsody operating system to the same audience as Windows NT. If this happens, we can only expect a bloody battle in which Microsoft will unquestionably prevail. As Davis and Young put it, "A year from now, we may all be wondering whatever happened to the cozy relationship Apple and Microsoft struck up in the summer of 1997."
Just as last month's issue was going to press, we learned that Phil White had been replaced by Bob Finocchio as president and CEO of Informix Corp. At that time, the company's official statement was that White would remain on as chairman of the board, but Informix has since decided to boot White out of the company entirely. Finocchio has taken charge and announced plans to cut the workforce by anywhere between 420 and 650 employees. By the time you read this, the layoffs will probably be in effect. Finocchio said that, in general, most of the layoffs will happen in the sales and marketing departments.
On the positive side, Informix is making a major push with its enterprise Windows NT strategy. Although Informix will continue to support its Unix customers, it will now shift a significant amount of its resources to NT development. The company claims to have broken down the traditional scalability and reliability barriers of NT with the Informix Dynamic Scalable Architecture (DSA), making NT a more reliable platform for large-scale enterprise systems. The Informix NT strategy is focused on targeted markets (mostly in the packaged applications sector) as well as new channel partners and support programs. For example, Informix is now the embedded database solution for Baan Co. and Lawson Software.
Speaking of packaged applications, SAP America Inc. and Intel Corp. announced plans to form a jointly owned company, Pandesic LLC, which will develop an Internet-based e-commerce solution. Combining Intel's logistics-management expertise with SAP's business process software, the new company will produce an integrated business system that will let merchants add end-to-end capabilities for selling goods and services over the Internet. The solution will let you manage your e-commerce system in real time using integrated business processes.