When Two Worlds Collide

Gates Meets Jobs and Jobs Meets Gates
by: Jerry Liao

They thought it would never happen but it did. At the All Things Digital conference (D5) in San Diego, Mr. Mac Steve Jobs and Mr. Microsoft Bill Gates shared the stage for the first time in more than two decades. Technology buffs who attended and witnessed the event said that the meeting was long overdue and they were expecting a head-to-head technology discussion between two of the greatest minds of the industry.

The much anticipated battle didn’t happen, instead the discussion turned out to be more of a love-in between old pals.

Asked what Gates’ contribution to computing had been, Jobs said: “Well, you know, Bill 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, Bill was really focused on software before almost anybody else had a clue that it was really the software.”

When asked what he thinks is the contribution of Steve and Apple, Gates said: “What Steve’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 uniquelythere were other people with products, but the idea that this could be an incredible empowering phenomenon, Apple pursued that dream.”

The question whether in five years time, will the personal computer still going to be the linchpin of all this stuff? Bill said: “Well, you can say that it will be predicted that it won’t be. You know, the network computer took this over about, whatever, five years ago we disappeared. The mainstream is always under attack. The thing that people don’t realize is that you’re going to have rich local functionality, I mean, at least our bet, whereas you get things like speech and vision, as you get more natural form factors, it’s a question of using that local richness together with the richness that’s elsewhere. And as you look at the device, say, that’s connecting to the TV set or connecting in the car, there are lighter-weight hardware Internet connections, but when you come to the full screen rich, you know, edit the document, create things, you know, I think we’re nowhere near where we could be on making that stronger.”

Then Steve said: “So people are figuring out how to do more in a browser, how to get a persistent state of things when you’re disconnected from a browser, how do you actually run apps locally using, you know, apps written in those technologies so they can be pretty transparent, whether you’re connected or not. But it’s happening fairly slowly and there’s still a lot you can do with a rich client environment. At the same time, the hardware is progressing to where you can run a rich client environment on lower and lower cost devices, on lower and lower power devices. And so there’s some pretty cool things you can do with clients.”

“What I’m saying is, I think the marriage of some really great client apps with some really great cloud services is incredibly powerful and right now, can be way more powerful than just having a browser on the client. I’m saying the marriage of these services plus a more sophisticated client is a very powerful marriage.”

Then Bill added: “Yeah. Architecturally, the question is, do you run just in the cloud and all you have downloaded locally is the browser? And that is the same question for the phone as it is for the full-screen device. There will always be different screen sizes because these are, you know, the 5-inch screen does not really compete with the 20-inch screen, does not compete with the big living room screen. Those are things that there will be some type of computing behind all of those things, all connected to the Internet, but the idea that locally you have the responsiveness of immediate interaction without the latency or bandwidth limitations that you get if you try and do it all behind, that’s what leads to the right balance.”

And in the area of entertainment, both gentleman has something to say about it:

Bill: “Well, the big milestone is where the delivery platform is the Internet and so you bring the richness and the interactivity. I think you can get a little bit of a glimpse of the future of TV more from looking at community-type things like Xbox Live, where people are talking to each other, finding friends, you know, watching things together, talking about those things.”

Steve: “I think people want to enjoy their entertainment when they want it and how they want it, on the device that they want it on. So ultimately, that’s going to drive the entertainment companies into all sorts of different business models. And that’s a good thing. I mean, if you’re a content company, that’s a great thing. More people wanting to, you know, enjoy your content more often in more different ways, that’s why you’re in business, but the transitions are hard sometimes.”

The interview went on but the most interesting answer I think was when co-host Walter Mossberg and Kara Swisher’s asked Steve about Apple’s late-’90s competition with Microsoft, Steve said: “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. 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.”

The message of Steve here says a lot about how companies should do to beat or at least stay afloat with its competition. Its not about beating your competition, it’s about knowing your own company’s strength.

The bottomline here is Steve needs Bill and Gates needs Jobs. Both Microsoft and Apple are better off with each other strong in the market rather than losing one or the other. The market is big for the iPod and Zune. An even bigger market for the PC and Mac. At the end of the day, both Steve and Bill are enjoying their status in the industry today. So why change the formula?

The transcript of the entire interview can be found at: http://d5.allthingsd.com/20070531/d5-gates-jobs-transcript/

*****

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