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| What would Ellison do if he ran Apple? |
This article covers a lot of ground. It starts with reviewing what has happened recently with Larry Ellison talking about making a bid for Apple, then goes into what it could mean, and what the strengths and weaknesses of the ideas are. For the record, I would rather Ellison left Apple the hell alone, and I hope he doesn't take Apple over.But also, for the record, there are some merits to some of his ideas. Just because Ellison knows his industry (multi-user databases and high end servers), does not mean that he knows microcomputers.
Let us recap the whole issue.
Larry Ellison, head hancho of Oracle and 3rd richest Software tycoon (worth $6 billion+), stated he wanted to buy Apple. He said that he was underwhelmed with Gil Amelio and Apples comeback plans, and that he could do it better. He also said some inane things, and inflammatory things. He definitely does have the ability to buy Apple. But he has talked tough about buying Apple before, and nothing has happened. Ellison has been a big talker on many occasions, is smart, unpredictable, and has said some incredibly stupid things. He does not like Bill Gates at all. And like most Billionaires, a large ego comes with the large pocketbook. So Ellison might just buy Apple as the worlds most expensive penis extension, and a way to fight Bill G.
However, *IF* you are going to buy a company (hostile or happy), the last thing in the world you would do is telegraph the move and announce it to the world. That drives up the cost of the company, and lets the company defend against you. Apple is taking this seriously, and is preparing a defense against not only Ellison but other potential hostile takeovers. If you want Apple it is much easier if you play nice -- calling the board and CEO idiots (who need to be thrown out) is not the way to play nice.
So Ellison might make a play for Apple -- but if he does this was a silly way to go about it. He is a wild-card, and no one can be sure of what he is going to do.
Is Ellison going to buy Apple? - Probably not!
The Prince Alwaleed of Saudi Arabia (and personal friend of Ellison) bought 5% of Apple. That may have been coincidence -- Apple is way undervalued, and Prince Alwaleed has a habit of buying undervalued stocks right before they turn around. There is no guarantee that the Princes purchase has anything to do with Ellison. The Ellison attention may have caught his eye in the paper (or Ellison talking to him personally about his ideas) may have been all it took.
Is Prince Alwaleed purchase part of Ellisons plan to buy Apple? - Probably not!
History and Philosophy!
Apple makes personal computers. Home computers are about empowering the individuals with as much power as you can put on a desktop (at a reasonable price). The personal computer industry is about decentralizing power from the old mainframe days, and putting power on the desktop. This is about individualism, freedom, and a bit of chaos. The individual chooses what to do, how to order information, and has HIS computer and his space -- and it usually ends up looking like the average desk (a pile of pure chaos). The American dream of computerdom -- to have the biggest, best, fastest computer you can afford on your desk, then to utilize 1/10th of that, and spend most of your time on the internet or playing games.
Oracle (Ellisons vision) makes their money selling big iron (and big iron databases). They want the world to have a few big powerful central computers distributing ordered information to the masses -- the Masses will have wimpy little toy computers. Ellison will give the masses NC's (Networked Computers) that have only enough power to talk to the central host and get the information they need -- but all the serious is work is done in the computer lab (where Oracle makes their money). This is about centralized control, order and an old world of computing where you got the processing power and information from the computer gods. These Goose-Stepping, super-anal, order fiends will control the media streams in just the way they want in their version of an Orwellian utopia. Of course the flip side is that it IS nice to have someone organize everything for you. It is nice to know where to find information because a bunch of anal-IS types have put everything in its place. (And if they are not anal, then they should be doing their jobs).
Apple is about powerful small computers. Oracle/Ellison is about powerful big computers. These compliment as well as compete -- like cars and airplanes. Both are better for certain tasks!
Industries swing back and forth. There is no doubt that there was too much centralized control for too long a time -- then the 70's and 80's (and 90's) broke that mold. Once the anarchy and freedom of Personal Computers hit, the market went haywire -- the balance swung way too far towards desktop power, and IS depts. lost control of information. Companies can't control the software that's going on the machines, and have a maintenance nightmare keeping them running. Every dept. inside a company seems to be its own fiefdom, with its own Applications and turf that is fiercely defended from *OTHER* depts. Dilbert is funny for a reason! Well the times they are a changin', and an adjustment is needed. We are starting to see more big iron again (more centralized servers). Centralization is cost effective in many areas, and the pendulum is swinging back.
In spite of all this, I do not think we can turn back and return to all big iron and dumb terminals (or NC's). There are places where NC's will work -- in schools and large companies. But those NC's will only be wimpy compared to our desktop machines of the same era. Those same machines will remain super-micro-computers compared to the machines of just a few years ago. Users may want to get SOME centralized information -- but they also want control over their machines, they want turf! Most of the things that would be accomplished through NC's, can be accomplished through Inter-net, Intra-nets and using Java and browsers. Internet is helping to push the need for more servers -- but it is also preventing the concept of only a few servers. Internet is guaranteeing LOTS of servers. Homes will almost never go for the NC because people want to buy cool, neat and powerful -- and NC's are not cool. WebTV is basically a flop (contrary to the presses spin). Americans are not cheap and frugal (in most cases) -- so the NC can not succeed in the home anymore than busses or trains have succeeded at replacing cars. There is a place for both -- but with cars being far more common than busses and bus-stops.
Internet is creating a need for more servers and more low-end computers! The internet and technology is driving a need for more powerful computers across the board. There is a need for many types of computers in different markets.
Ellison's Apple
If you ask anyone about the press and how good the press reports on their industry, you will usually get some choice and hostile responses back -- filled with comments like "idiots", "screw-ups" and other choice comments. Yet ask the same people about whether they listen to the press on other peoples industries, and they all admit that they do. With a history like that I am ashamed that I took the presses spin of what Ellison was saying. This guy opens his mouth too quick, but he is no dummy.
The press often gets it wrong. Why trust them in this case?
Apple has come the closest to getting the NC right. The Pippin is a cool low-powered Mac with a CD-ROM and an internet connection. If they had been able to throw in a little more storage, some cool game stuff (graphics acceleration) and a ton of marketing, it would have hit the mark. I think Ellison sees this.
So Ellison is stating that he would increase Apples Marketshare by producing lots of Mac based NC's. (See Pippin+'s). That is not a bad idea. That is a good idea -- and if Apple should be pushing this idea much much harder than they have been. So on this I agree with Ellison -- there is a market there, and Apple has the best opportunities of anyone. This is where Apple has a big opportunity to make a dent in the universe (of computers) and to make major in-roads. Education and Big Buisiness both drool at the idea of Light-weight pippin+ clients on powerful Rhapsody-based web-object servers on the back end. Publishing would not poo-poo the idea for many uses as well (it would be good for copy writers, proofers and many others). Imagine that you could set up one high-end machine for serving, and have access to your information from any TV in your house (or across the web) with little $500-600 machine?
Ellisons ideas of Apple-NC's is not as bad as people think.
Newtons and eMates are cool -- but I am not sure they hit the mark alone. They are great accessories to a computer -- but they are not quite a replacement. I have both a PDA and a home computer, and most people I know that have PDA's would not give up their computer. So PDA's will have a purpose and are close to Ellisons dreams of the future. But I think the PDAs are not versatile enough to replace the current computer (this too will change with time). It will take years for people to accept the idea of disposable information appliance. But People want an NC that is more the Pippin type computer -- except the first versions of the Pippin were underpowered (in graphics and storage). The NC that would be viable is one that can run lots of off the shelf software (for homes and businesses) and is a computer in every sense of the word -- but wrapped more as a preconfigured appliance (and can be expanded). Apple's performa concept taken to the next level -- the results of a mating between a Nintendo, a Home Computer and WebTV. I am afraid that MS and Intel are aiming at the right goal -- their Low-Cost Computers are almost exactly on the mark. This is what people need as a transition machine to get more people into NC's and thinking lower end. Then after more acceptance, in a few more years the concepts of the PDA type information Appliance will be much more digestable.
Newton and eMates are 1/2 right. They meet a demand -- but not every demand. We still need a Super-Pippin.
Ellison has bashed Amelio a little too harshly. Amelio has only been at the helm for a year -- and it takes a good part of that just to figure out what side is up. I agree with 95% of the decision Amelio is making. About the worst that can be said is that Amelio is putting the financial house in order, but that he has no real vision for the future -- yet.
I doubt that if Ellison did take over Apple that it would be the end of Apple. The Mac-Users might scream and squeal, but Ellison is not as stupid as people are saying. He is not going to give up Billions of dollars in revenue (Big Macs) to chase after millions (little Macs) -- even if the millions of dollars will turn into Billions later on. I think Ellison would try to do both. We would have high-end Macs, but would supplement them with a PDA's and NC's more. I think Apple has not done as good on the low end as they could have, and that low-end machines would help Apples Marketshare and insure the long term viability of the Mac platform. The only thing that scares me is that Ellison might try to do it with MacOS (and not Rhapsody) -- but even this is pretty far-fetched. Ellison knows enough about computers to know that Apple needs stability and that computers are becoming much more powerful. Rhapsody may be a resource pig in comparison to MacOS today -- but by tomorrows standards, no one will care.
I would rather let Amelio continue with the pull-out plans (I think they are coming to fruition), but I think the prediction of Apples doom if Ellison takes over are greatly exaggerated.
I do believe that NC's on the low end make sense -- and could help Apple, and Ellison vision is more valid than most have given credit for. Ellison is sticking by it, which is also good. His utopic vision of NC's is not a bad thing to want -- especially if you are in Ellisons business. There is no doubt that in a few there will be a lot more NC's (relative to the computers), there will be some differentiation and a larger market for low-end computer appliances. In a few years computers are going to cost so little that the idea of an NC will be valid -- only the NC's of tomorrow will be a hot computer by todays standards.
Conclusion
I think Ellison is getting criticized a little too much. Well maybe not -- he has a big mouth, is so extreme in what he says that he disserves it. But talking big and long term (5 or 10 years out) may not be that bad, as long as you don't confuse that with the realities of the companies goals for the next 2-3 years!
While I am not sure I want Ellisons vision of the future (as he sees it)-- his vision tempered with the business realities of what Apple is, and how they would get there, may be just right. Think about it with an open mind. How bad would it be if Apple could do both. Imagine Rhapsody of tomorrow, in a cheap little 400mhz processor, selling for $500 with 128meg of RAM, specialized 3D acceleration (hot games) and a DVD-RAM drive (that can read and write) and a few GIG of local storage. The truth about computers is that this IS where we are going! This is not a pipe-dream, but just a matter of time. In fact, this is probably less than 6 years away!
Ellison is trying to jump the gun and go there before the Hardware is ready, and trying to wimpify the NC too much -- but his ideas are fairly valid. We do need more information servers (though many of us will run our own servers, and those could be Macs). Businesses do need to have more control over their information. Apple SHOULD increase their Marketshare -- and has gotten close to getting the NC right in both spaces. The Newton2000's are a hit in one space, if they get a hit in the Pippin/WebTV space they win big time. Computers are becoming so fast that normal users have almost no hope of using all the power that is there right now -- let alone in another 6 years (when they will be 16 times faster than they are today). Ellison is a lot sharper than the press is giving him credit for. Ellisons vision of Apple is not that far from Sun's vision of where Sun wants to be in a few more years. Maybe Apple should be listening a little bit as well, even if they don't want Ellison at the helm.
4/25/97
I personally believe Apple can accelerate the acceptance of Newtons by making virtual Newtons (that run on a computer) and giving this software away with the Newton. This way users can enter information and use either Newton, and resolve information across the two. The Newton also needs a better docking system -- a little infrared transceiver that works with the Newton like the Pilots dock (just push a button and they both resolve). If Apple had this, then software writers could write for the Newton and deliver on the Newton and the Virtual Newton on the Mac or PC -- which would be great for some types of Apps and accessories. I have been telling Apple this since the Newtons came out, but they don't look to me for their strategic planning.
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