and now ladies and gentleman the Macintosh software dating game welcome to the Macintosh

software dating game software CEOs could I please ask you to introduce yourselves

Hi Fred Gibbons president of Software Publishing Corporation

Hi I'm Mitch Kapor president of Lotus we do a product called 1-2-3 my name is Bill

Gates I'm chairman of Microsoft and during 1984

Microsoft expects to get half its revenues from Macintosh software

software magnate number three, when was your first date with Macintosh?

we've been working with the Mac for almost two years now and we put some of our a really

good people on it software CEO number three will Macintosh be

the third industry standard? well to create a new standard it take something

that's not just a little bit different it takes something that's really new and really

captures people's imagination and the Macintosh of all the machines I've

ever seen is the only one that meet that standard

software CEO number three describe your ideal relationship with Apple

we'll be selling our software independently so the key thing is that

Apple gets a lot of consistent standard machines out there quickly

well sorry Steve, time's up ... we'd like to give Steve a few moments to decide

today's winner OK Steve, who's the winner?

apples are red IBM's blue if Mac's gonna be the third milestone

I need all of you

Now, I'd like to talk about to talk about meaningful partners.

Apple lives in an ecosystem and it needs help from other partners, it needs to help other

partners. And relationships that, uhm, that are destructive

don't help anybody in this industry as it is today, so, during the last several weeks,

we have looked at some of the relationships, and uh, one has stood out as a relationship

that, uh, hasn't been going so well but had the potential, I think, to be great for both

companies, the discussions actually began because there were some uh, patent disputes.

And, uh, rather than, I know, rather than repeating history, I'm extremely proud of

both companies that they have resolved these differences in a very very professional way.

I happen to have a special guest with me today, uh, via Satellite downlink, and uh, if we

could get him up on the stage right now. Some of the most exciting work that I've done

in my career has been the work that I've with Steve on the Macintosh. Uh, whether it's the

first introduction or doing products like Mac Excel, uh, these have been major milestones.

Uh, we're very excited about the new release we're building. This is called Mac Office

98. We do expect to get it out by the end of this year. I think it's going to really,

uh, set a new bench mark for doing a good job with performance and exploiting unique

Mac features. Uh, in many ways its more advanced than what we've done on the Windows platform.

We're also excited about Internet Explorer and we've got a very dedicated team that's

down in California that works on that product and, uh, the code is really specially developed

for the Macintosh. It's not just a port of what we've done in the Windows environment

and we look forward to the feedback from all of you as we move forward doing more Macintosh

software. Thanks.

The era of setting this up as a competition between Apple and Microsoft is over as far

as I'm concerned. This is about getting Apple healthy, and this is about Apple being able

to make incredibly great contributions to the industry, to get healthy and prosper again.

So thank you all for coming I look forward for earring the grillings and cheerings tonights

and for the days to follow Well, thank you.

Before we get started, there were some pioneers--of course, we have the pioneers here on the stage,

but there were some other really important pioneers in the video we just saw and a couple

of them are here in the audience. Mitch Kapor, who is a regular, could you just stand up,

wherever you are? There he is. And Fred Gibbons, who has not come to D before,

but is here tonight. Fred. There's Fred right there.

And I don't know if he's in the room, but I do want to recognize our fellow journalist,

Brent Schlender from Fortune, who, to my knowledge, did the last joint interview these guys did.

It was not onstage, but it was Fortune magazine. Brent, I don't know if you're in the room.

If you are, can you stand? Maybe he's way over there.

So let's get started. I wanted to ask, there's been a lot of mano-a-mano/catfight kind of

thing in a lot of the blogs and the press and stuff like that, and we wanted to--the

first question I was interested in asking is what you think each has contributed to

the computer and technology industry, starting with you, Steve, for Bill, and vice versa.

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.

Was important? That's what I see. I mean, a lot of other

things you could say, but that's the high order bit. And I think building a company's

really hard, and it requires your greatest persuasive abilities to hire the best people

you can and keep them at your company and keep them working, doing the best work of

their lives, hopefully. And Bill's been able to stay with it for all these years.

Bill, how about the contribution of Steve and Apple?

Well, first, I want to clarify: I'm not Fake Steve Jobs.

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

uniquely--there were other people with products, but the idea that this could be an incredible

empowering phenomenon, Apple pursued that dream.

Then one of the most fun things we did was the Macintosh and that was so risky. People

may not remember that Apple really bet the company. Lisa hadn't done that well, and some

people were saying that general approach wasn't good, but the team that Steve built even within

the company to pursue that, even some days it felt a little ahead of its time--I don't

know if you remember that Twiggy disk drive and...

One hundred twenty-eight K. Oh, the Twiggy disk drive, yes.

Steve gave a speech once, which is one of my favorites, where he talked about, in a

certain sense, we build the products that we want to use ourselves. And so he's really

pursued that with incredible taste and elegance that has had a huge impact on the industry.

And his ability to always come around and figure out where that next bet should be has

been phenomenal. Apple literally was failing when Steve went back and re-infused the innovation

and risk-taking that have been phenomenal. So the industry's benefited immensely from

his work. We've both been lucky to be part of it, but I'd say he's contributed as much

as anyone. We've also both been incredibly lucky to have

had great partners that we started the companies with and we've attracted great people. I mean,

so everything that's been done at Microsoft and at Apple has been done by just remarkable

people, none of which are sitting up here today.

Well, not us. Not us. So in a way, you're the stand-ins

for all those other people. Yeah, in a way, we are. In a very tangible

way. So Bill mentioned the Apple II and 1977 and

30 years ago. And there were a couple of other computers which were aimed at the idea that

average people might be able to use them, and looking back on it, a really average-average

person might not have been able to use them by today's standards, but it certainly broadened

the base of who could use computers. I actually looked at an Apple ad from 1978.

It was a print ad. That shows you how ancient it was. And it said, thousands of people have

discovered the Apple computer. Thousands of people. And it also said, you don't want to

buy one of these computers where you put a cartridge in. I think that was a reference

to one of the Atari or something. Oh, no.

You want a computer you can write your own programs on. And obviously, people still do.

We had some very strange ads back then. We had one where it was in a kitchen and there

was a woman that looked like the wife and she was typing in recipes on the computer

with the husband looking on approvingly in the back. Stuff like that.

How did that work for you? I don't think well.

I know you started Microsoft prior to 1977. I think Apple started the year before, in

'76. '76.

Microsoft in ... '74 was when we started writing BASIC. Then

we shipped the BASIC in '75. Some people here, but I don't think most people,

know that there was actually some Microsoft software in that Apple II computer. You want

to talk about what happened there, how that occurred?

Yeah. There had been the Altair and a few other companies--actually, about 24--that

had done various machines, but the '77 group included the PET, TRS-80 ...

Commodore? Yeah, the Commodore PET, TRS-80 and the Apple

II. The original Apple II BASIC, the Integer BASIC, we had nothing to do with. But then

there was a floating-point one where--and I mostly worked with Woz on that.

Let me tell the story. My partner we started out with, this guy named Steve Wozniak. Brilliant,

brilliant guy. He writes this BASIC that is, like, the best BASIC on the planet. It does

stuff that no other BASIC's ever done. You don't have to run it to find your error messages.

It finds them when you type it in and stuff. It's perfect in every way, except for one

thing, which is it's just fixed-point, right? It's not floating-point.

So we're getting a lot of input that people want this BASIC to be floating-point. And,

like, we're begging Woz, please, please make this floating point.

Who's we? How many people are in Apple? Well, me. We're begging Woz to make this floating-point

and he just never does it. You know, and he wrote it by hand on paper. I mean, you know,

he didn't have an assembler or anything to write it with. It was all just written on

paper and he'd type it in. He just never got around to making it floating-point.

Why? This is one of the mysteries of life. I don't

know, but he never did. So, you know, Microsoft had this very popular, really good floating-point

BASIC that we ended up going to them and saying "help."

And how much was the--I think you were telling us earlier ...

Oh, it was $31,000. That Apple paid you for the ...

For the floating-point BASIC. And I flew out to Apple, I spent two days there getting the

cassette. The cassette tapes were the main ways that people stored things at the time,

right? And, you know, that was fun. I think the most fun is later when we worked

together. What was the most fun? Tell the story about

the most fun that was later. Or maybe later, not the most fun.

Let them talk. Teasing.

Well, you know, Steve can probably start it better. The team that was assembled there

to do the Macintosh was a very committed team. And there was an equivalent team on our side

that just got totally focused on this activity. Jeff Harbers, a lot of incredible people.

And we had really bet our future on the Macintosh being successful, and then, hopefully, graphics

interfaces in general being successful, but first and foremost, the thing that would popularize

that being the Macintosh. So we were working together. The schedules

were uncertain. The quality was uncertain. The price. When Steve first came up, it was

going to be a lot cheaper computer than it ended up being, but that was fine.

So you worked in both places? Well, we were in Seattle and we'd fly down

there. But Microsoft, if I remember correctly from

what I've read, wasn't Microsoft one of the few companies that were allowed to even have

a prototype of the Mac at the time? Yeah. What's interesting, what's hard to remember

now is that Microsoft wasn't in the applications business then. They took a big bet on the

Mac because this is how they got into the apps business. Lotus dominated the apps business

on the PC back then. Right. We'd done just MultiPlan, which was

a hit on the Apple II, and then Mitch did an incredible job betting on the IBM PC and

1-2-3 came in and, you know, ruled that part of the business. So the question was, what

was the next paradigm shift that would allow for an entry? We had Word, but WordPerfect

was by far the strongest in word processing dBase database.

And Word was kind of a DOS text ... All of these products I'm saying were DOS-based

products. Right.

Because Windows wasn't in the picture at the time.

Right. That's more early '90s that we get to that.

So we made this bet that the paradigm shift would be graphics interface and, in particular,

that the Macintosh would make that happen with 128K of memory, 22K of which was for

the screen buffer, 14K was for the operating system. So it was ...

14K? Yeah.

The original Mac operating system was 14K? 14K that we had to have loaded when our software

ran. So when the shell would come up, it had all the 128K.

The OS was bigger than 14K. It was in the 20s somewhere.

I see. We ship these computers now with, you know,

a gigabyte, 2 gigabytes of memory, and nobody remembers 128K.

I remember that. I remember paying a lot of money for computers with 128K in those days.

So the two companies worked closely on the Mac project because you were maybe not the

only, but the principal or one of the principal software creators for it, is that right?