Monday, January 20, 2014

The PC: How Steve Jobs created a huge market for Bill Gates' software.

If you believe Wikipedia, the story of the PC begins in the 1950s with IBM 610, a Personal Automatic Computer (PAC).

Rule #1: Don't believe Wikipedia when it comes to understanding innovation. Wiki editors know how to compile a myriad of data points — and I love them for that! — but they don't understand that for technology innovation the scale is all that matters. IBM 610 was a one-hand clap in the world of computer projects. Very few people heard about it, and even fewer people, if any, used it for practical purposes.

The first real Personal Computer was Apple II conceived by Steve Jobs and Steve Wozniak in 1977. Steve Wozniak put together the computing hardware part; but Steve Jobs turned the kit into a real innovation when he thought about incorporating the power supply and keyboard into one box. With the addition of the floppy drive, the box turned into a breakthrough innovation.

Source: Triumph of the Nerds

Rule #2. Don't believe people when they apply a modern technology term like "Personal Computer" retroactively. The Personal Computer became a major innovation when it took the shape of a consumer box that you use for running shrink-wrap software. Computing machines before Apple II were either hardware kits for hobbyists or closed microprocessor boxes with proprietary software for industry use .

Bill Gates and Paul Allen anticipated the era of the Personal Computer, but originally they thought about it as a machine for hobbyists. In 1976, Bill Gates even wrote a letter to hobbyists who, in Gates' words, were stealing his work:


Before Apple II, the majority of users were hardware tinkerers. After Apple II, the majority of users were consumers who used the PC to run apps. The hobbyists became software developers interested in selling their apps to consumers, rather than stealing software from Bill Gates and Paul Allen. A new large market for software was born.

When IBM entered the PC market in 1981 they contracted Microsoft to write an operating system for their computer. The rest is history. Just as young Bill Gates had anticipated, the world of personal computing needed a lot of software. Steve Jobs of Apple Computers happened to create that world, helping materialize the Gates' business vision.

Why do we care today about the old PC? Because the same innovation pattern keeps repeating in Silicon Valley. Apple ][ eliminated the requirement for software enthusiasts to know a lot about hardware. Instead of tinkering with hardware components, they could now concentrate on writing cool apps to benefit consumers, while hardware engineers focused on driving the performance of the box.

Similarly, in the 1980s Sun Microsystems enabled developers to write ubiquitous UNIX software that powered the Internet server revolution of the 1990s and eventually migrated to the Linux platform.

Most recently, in the 2000s Google created the MapReduce technology that harnessed highly reliable, distributed, commodity hardware server systems to the purposes of the developers of networked data services. Another example would be the Android OS.

As we explain in Scalable Innovation, Chapter 4 (System Interfaces: How the Elements Work Together), the emergence of new interfaces between system elements decouples innovation cycles and leads to rapid growth. To innovate effectively, we should recognize the "PC moments" in major technology developments.

tags: invention, innovation, scale, machine1, machine2, microsoft, tgisv

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