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Saturday, October 25, 1997 by Dave Winer.

Yesterday, with Microsoft's help, I dropped a juicy tidbit on the web, a copy of a memo from Bill Gates to John Sculley, from the summer of 1985, over twelve years ago.


I wanted it to be on the web. It had already been made public in a book and a magazine. I felt that web journalists could do something interesting with the document, that's why I asked for it.

Some people have speculated that this was a Microsoft-orchestrated posting. It was not. I asked for it, in public, in a DaveNet piece, released on Thursday.

Now I'm going to turn the jets in another direction. Here's an invitation to other people who write about computers on the web to take it from here. It would be great if other people would dig into the story and look at the questions it raises.

1985 Permalink to 1985

In 1985 Microsoft had a substantial investment in Mac software. Word and Excel were out. They had shipped a BASIC for the Mac. I think there was a Flight Simulator for the Mac.

But the Mac was in trouble. The top of the line was a 512K machine with no easy or reliable expansion. The Mac market was choking with limited memory. The limits wouldn't open until early 1986 when Apple shipped the Mac Plus. It was expandable, you could add a hard disk and you could add several megabytes of RAM. In 1987 the Mac II shipped, opening the Mac to larger screens and color.

As Gates says in the memo, they had lobbied Apple for compatibility at a disk level, with the 3.5 inch format that was just coming out for the PC. I saw it the same way. I wrote a memo to Apple execs in late 1983, before the Mac shipped, asking them to get in synch with the new disk format for the Data General/One, the first PC laptop.

According to Gates's memo, the Macintosh XL (Lisa) had just been cancelled. Apple was promoting Lotus Jazz heavily, but Jazz was a dud. This must have frustrated Gates, Lotus was competing with Excel, which (as we know now) would go on to be the market leader in spreadsheets. Lotus was the leader in spreadsheets in 1985.

1985 was the year of the Macintosh Office. Apple was in deep trouble. Jobs was forced out. Sales of the Mac had reduced to a trickle. Apple was surviving on Apple II sales. Mac-only developers were going out of business in 1985. Gates must have seen that in the sales of Word and Excel.

Things looked grimmer in the summer of 1985 than they actually were. The Mac Plus was in the pipe. When it shipped, the market would boom. It wasn't clear to me at the time, nor is it clear now, that Apple would have done as well if it had licensed the OS.

As Carlton's book makes agonizingly clear, at the top level Apple was a bozo company. I wonder if the tables had been turned, if Gates had been the CEO of Apple in 1985, if the Mac OS would have been licensed. I believe Apple could have taken and held control of the OS world if someone more aggressive and winning-oriented had been running Apple, instead of Sculley.

Licensing was the small picture, a tactic. The big problem was there was no one home at the top level of Apple, no one who had the Gatesian drive to win, no one with the commitment to help Apple's engineers create products that customers wanted. Any strategy would have been preferable to the no-strategy flip-flops of Apple of the mid-late 80s.

Microsoft was a much smaller company than Apple in 1985, it was smaller than Lotus too. Even so, Gates was thinking big. No doubt if Apple had followed the plan in the letter, Microsoft would have prospered. But it was also generous of Gates to make this offer. "You be the platform vendor," he said to Apple. "I'll make apps."

It was also a brave memo. Gates disses IBM, the technology leader that was losing its way. IBM was Microsoft's most important customer. What else did Gates know at that time? Did he know that IBM was going to try to break the clone business with the Micro-Channel Architecture?

Dave Winer

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