“What is the biggest business blunder in the past half-century? That’s easy: Steve Jobs’s decision not to license the Macintosh operating system, which cost Apple $559 billion (going by peak market values). Apple had, and probably still has, a better OS than Microsoft’s. Instead of leading a $23 billion also-ran, Jobs could have been Bill Gates, with a company worth $582 billion. But Jobs failed to foresee the Mac OS’s decline and to take appropriate action: Give in to the inevitable and license the thing,” Lester Thurow writes for Fast Company.
“You can’t really blame him. Those who invent something are always the last to part with it. Fortunately for Microsoft, Gates did not invent the original DOS operating system, but bought it. What is bought is easily sold (or, in the case of Windows, leased),” Thurow writes.
Full article here.
MacDailyNews Take: Actually, the best time for Apple to license the Mac OS (mid – late ’80’s) came at a time when Steve Jobs was not even with the company. Bill Gates’ famous memo imploring Apple to license the Mac OS was sent on July 29, 1985 to Apple CEO John Scully and head of technology for Apple, Jean Louis Gasse, not Steve Jobs. Jobs had been stripped of all duties at the company in May, 1985 and was about to resign in September to begin NeXT. Jobs probably never even saw the memo. So, while Apple’s refusal not to license the Mac OS was perhaps the biggest business blunder of the past half-century, it was Sculley’s and Gassee’s blunder, not Steve Jobs’. We think forcing Jobs out in the first place may have been an even bigger blunder.
Related MacDailyNews article:
The iPod is not the Mac, so stop trying to compare them – August 13, 2004
word.
Maybe the author should have read…
http://daringfireball.net/2004/08/parlay
and
http://daringfireball.net/2004/08/2004_wont_be_like_1984
and then MAC OS would become the same as Windows has become today …
…
Was it really a blunder? Sure the aim of most businesses nowadays is to make money, and get rich. I, however feel true success is when you have fun at what you do, and money is a by-product, not the focal point. This is what Apple does. It makes super products, and the money they earn is a by-product. Now many shareholders only invest for the sake of making money. I believe a lot of people invested in Apple because they believe the company is something special, and not only for a quick buck.
FWIW: IBM’s decision to leave the PC-business to Bill Gates will always be the biggest blunder in my eyes…
was it a blunder? maybe, maybe not. if Apple was in MS current position – who is to say the OS would still be superior?
MS’s biggest problems right now are that it is too big to move quickly and to adapt to the changing market. look how long it has taken longhorn to get moving – it it has been stripped to the core and still sucks. sure, MS has a boat load of money, Gates is the richest SOB, but their technology is crap and still degrading.
i could make an argument that business decision blunder was a blessing in disguise. notice the pervious artcile about MS jumping in late to the online music wars to watch and learn from the pioneering mistakes so it can jump in late with its money and dominate the market. well, SJ and Apple have been able to watch MS fail at Windows implementation, learn from the evil empires mistakes and create the most amazing OS to date.
a worthy debate if you ask me.
Can I be CEO of a $23 Billion ‘also ran’?
Please?
Pretty Please?
No one knows what would have happened. We can imagine like a typical Star Trek episode how things would change. (City on the Edge of Tomorrow anyone?)
But we know for sure that Steve Jobs would have done the same thing then as he is now with the iPod and ITMS. So maybe the guy has a point.
But then Apple would not be Apple, and Macs would not be Macs. And that would be, possibly, worse than being worth almost $600 billion.
You Mac users are lucky Apple is small. Do you actually think I’d let the liberal Steve Jobs get away with what I let my buddy Bill Gates get away with?
Not on your life!
Okay, lets join hands and sing a hymn…
Master Thespian,
You need to read this:
MacDailyNews: “The iPod is not the Mac, so stop trying to compare them”
huh? the Mac OS X runs nicely because it’s built for the Mac… got it?
If it was designed for all those chips and all those drivers and all those configurations.. it would be .. er.. clunky and.. er.. Windows..
At the end of the day, Jobs does not equate Success with Money… it’s a hard pill to swallow, but over and over, we discover his great ideas are often counter to profit-maximization…
which is why he didnt want to release a substandard experience by lisencing AAC/Fairplay.
Lester Thurow – hmm, never heard of *him.* Has this guy ever tried to run a business?
Just another armchair quarterback (probably making 40-50K/year) talking about how someone else, who happens to be running a multi-national corporation, has ‘screwed-up’ by not doing what *he* thinks should have been done.
Deeds, not words, are the mark of an acheiver.
Why should Apple license? Licensing opens up a broad spectrum of hardware liabilites that would water down the quality of the operating system.
What difference does any of that ancient news make now? The reality is that Steve will get this opportunity again with HP or IBM. Steve’s in this to win big time, but the foundation for it to happen has to be in place (and it is already being tested with the iPod). I’m sure everyone will laugh when they read this, but I have no doubt that by the end of this decade, Microsoft won’t even be in the operating system business anymore.
People keep missing the real reason that M$ became so ubiquitous.
Basically it was due to IBM. When the clones came out they were referred to as IBM compatibles, because businesses trusted the IBM name. The fact that DOS was the OS on these machines was secondary.
The fact that M$ then licensed their OS to all the clone makers pretty much killed IBM’s PC hardware business.
Had Apple licensed their OS their hardware sales would have suffered the same fate. Apple would have lost control of the whole package and there is no way of knowing whether they could have kept up with all the various configurations.
I am very happy that things have worked out the way they have.
Hindsight is 20/20, however nobody knows what would have actually happened if the Mac OS was liscensed. There is no way of knowing what may have happened. Perhaps Apple would have taken off, perhaps not.
I’m more concerned with what Apple is doing today and how they move forward.
The original Mac OS is dead and so is MS-DOS. Windows NT and NextStep/OpenStep are alive and well today as Windows XP and Mac OS.
The 32-bit era of computing is coming to a close and like Steve Jobs said, Windows won. The 64-bit era of highly networked desktop/personal computing is coming and the real question is who will win this time?
1
The Hardware base of the Macintosh can already run 32 & 64-bit applications side-by-side without emulation, something NO INTEL/AMD CHIPSET CAN CURRENTLY DO. Even the AMD Athlon64/Opteron series cannot do this- the Athlon 64 can be booted into a 32 OR 64 bit mode, but cannot run the other without emulation (think VPC slow).
2
The Mach microkernel/FreeBSD UNIX based Mac OS can currently run mixed 32 & 64 bit applications as well as 32-bit programs with 64-bit extensions built-in, something no Wintel box of any description can currently do. The next release of Mac OS v10.4 will be extensively revised for 64-bit support throughout the OS while Micro$oftopoly tries to re-invent the wheel with WinFS and Longhorn (available sometime this century).
3
The first Mac OS was a closed-up system with no command line unlike today’s Mac OS. Development of apps for the Mac with X-Code has never been easier or less expensive and today’s Mac OS has easy access to thousands of open source Unix/Linux-world apps through the X11 Windowing System.
4
Security. Need I say more.
5
Steve Jobs at the helm.
It’s a different time and a different world with different circumstances.
Think Different
This sort of article just tells me that there are more and more folks out there who want to use OSX – they want it so badly they want it for the PC.
MacDailyNews is right. It was not Steve’s call back then. It really was the Board of Director’s call and Sculley was the driving force behind the board back then.
Second, at that time Apple was enjoying 50+% gross margins, in some case almost twice what the other computer hardware manufacturers were getting. Apple had a 15 – 19+% market share, and in some quarters Apple was selling the most personal computers of anyone, even IBM, HP, Compaq, etc. Apple was rarely out of the top three in quarterly market share and never out of the top five. Apple was the darling of Wall Street with such margins and market share. Some said (incorrectly) that Sculley could do no wrong. There were many at the time who thought Apple’s decision not to license was a very smart move.
It is easy to look back almost 20 years later and say it was dumb not to license. But, as many of the posters here have said, IF Apple had licensed its OS would that have diluted down the inventiveness to the point where it would be no different than Windows is now?
If Apple had 200 million users running Mac OS 7 would Apple had the power to dump its proprietary, legacy OS and jump to a Mach core? Probably not. There quite probably would never have been an OS X or anything like it.
Actually, the biggest business blunder in the past half-century was the loose and badly-written agreement under which Apple licensed some aspects of the Mac operating system to Microsoft.
Nonsense, you say?
Overlapping windows. Patented by Apple.
Non-square, non-contiguous screen selection. Patented by Apple.
The list goes on and on.
One problem was that the agreement was written so badly that Microsoft was able to successfully claim that Apple had licensed ALL aspects of the MacOS to Microsoft – and the result of that was the dominance of Microsoft in the field.
Of course, the even worse problem was the existence of the agreement in the first place – but Apple perceived the value of Microsoft’s applications to be higher than the anticipated impact on sales from an improved Windows.
Now THAT was a big mistake.
The really dumb move? Not to focus on developers.
There were many within and without Apple during the 80s and early 90s who thoght Apple’s developer programs were not liberal enough. Apple did not get as many developers (big and small) as the DOS (and subsequently Windows) platforms did. In the late 80s, and especially the early to mid 90s, there were many, many who defected from the Mac (or never bought one in the first place) because they could not get the applications they wanted on the Mac.
This is still true today. Sure, except for some small niches — for example satellite communications link modelling — there is at least one program in every market segment. However, there are many cases where the market leading application on Windows is not on the Mac.
Apple had changed its stance on developers very significantly on the last couple years. This is very good. They give away a full development package wtih the OS. This is great. Want more help? Compared to the late 80s through mid 90s joining Apple Developer programs is cheap.
As said by others above, Apple is a different company now than in the 80s and 90s.
It was my understand that when apple did license out the mac os for the mac clones era, that they were hurting afterwords and when the G3’s came out they decided to no longer do that because of licensing to the mac clones hurt them.
If LT�s argument is that licensing of the Mac OS is a sure way to world market domination then LT needs to provide some very explicit and historical examples of similar business models. Unfortunately, he cannot. Instead, LT only provides readers with nonsensical contentions, illogical opinions, and unfounded conclusions. Indeed, LT�s emotional angst for Apple�s long-term success is only exceeded by his intellectual poverty, narrow vision, and biased assessments.
Certainly there are some advantages and disadvantages of Apple licensing its OS but LT fails to provide any rational and insightful discussion of this nor does he explain how Apple�s increasing profits and stock values, new product lines, and consumer satisfaction factor into it long term growth and development.
Rather than explain clearly and succinctly how licensing �may� have benefited Apple he deviates from the high paths of objective thought to the swamps of fictitious allegory. Bethlehem Steel failed not because they failed to �license� steel manufacturing processes but because of cheaper imported steel. Chiquita failed not because they failed to �license� banana production but because of, among other factors, unethical business practices and over production. United Airlines and U.S. Airways surely did not fail because they failed to �license� air travel but because of increased costs of fuel and labor, and competition from lower cost discount airlines.
It is true that Microsoft has promised new and innovative products, unfortunately LT fails to provide factual and chronological details how Microsoft has met this challenge. It seems that recently Microsoft can only produce delays, vaporware, and excuses. LT fails to support his assertion how Bill Gates� decade-long delay in Longhorn, chronic insecurity of Internet Explorer, and anemic advancement in current Windows software demonstrates the dynamic skill of Bill Gates for developing “emerging software technologies (that) can be woven together and parlayed into must-have industry-standard products.” Apparently, LT�s expectations of Microsoft�s technological talents are so small that Microsoft�s debacles are considered mere inconveniences. LT is, perhaps, fixated exclusively on Microsoft�s sole capacity to imitate rather than innovate.
LT�s article is poorly thought out, miserably constructed, and devoid of any useful information. In fact, LT�s efforts seem to mimic those of Microsoft perfectly.
The second-biggest blunder in business history was Microsoft’s invitation to Apple to license its OS. They’re just lucky Apple’s blunder was bigger.
Microsoft: No. 1 in spite of itself …
Is this race over? I think not…