The only thing that saved NeXT was the prodigal son’s returning to Apple. In 1997, after more than a decade of flailing against the relentless forward march of the PC platform, Apple fired its CEO and replaced him with Steve Jobs. Stepping in on an interim basis, and then later taking over entirely, Jobs embarked on a complete reinvention of the company’s product lines that spawned a series of market-upending successes: the iMac in 1998, the iPod in 2001, and, biggest of all, the iPhone in 2006. NeXT became part of Apple as part of Jobs’s reentry deal. The workstations soon were no more. Its Unix-based software, however, lived on—becoming the heart of the OS that powered these new devices and, eventually, turned Apple into the richest company on the planet.
THE CALIFORNIAN INVASION
Steve Jobs still might be getting all the press, but there were close to a million people working in the computer industry in California in the middle of the 1980s. The vast majority of them weren’t working amid the glamour and flash of PC companies and software makers. They weren’t making six-figure salaries, either. They were the programming army, the people who lived and breathed software languages and knew the ins and outs of every OS. They worked on mainframes, not micros. They were Californians like Trish Millines.
The basketball champ from New Jersey had gotten tired of Arizona’s heat and small-city sleepiness after two years into her job at Hughes. She rented out her house, bought a motor home, and relocated to San Francisco. Yet if the micro world was booming when she arrived in early 1982, the bigger companies that employed programmers in bulk were still locked in the Reagan recession. Once they pulled up from it, contracting work was more common than actually being hired on full-time. Without a steady paycheck to cover San Francisco’s steep cost of housing, she lived for a while out of her motor home, camping out with other high-rent refugees along Marina Green until the police swept through and shooed them out.
Employees at places like Apple might have been going on and on about all the fun they had at work, but for Millines a programming job was just a way to pay the bills. Her recreational rugby team was the thing that made the city fun. Even then, she found San Francisco to be not quite her style. One of her first jobs was teaching programming at a computer learning center—one of the many outfits that had sprung up those days to provide a few months of quickie training to would-be technologists. She got fired after only one term for being too tough a grader. “I was giving people the grade they deserved,” she chuckled, “instead of the grade they wanted.”
She eventually found a steadier programming job down in Redwood City, a little closer to the Valley action, but the transience of the Bay Area wore her out. People were hopping jobs and, as prices rose and employment slowed, they were leaving town. “I got tired of making friends all over again,” she remembered. She was learning a lot, but the Bay Area didn’t get any cheaper. By the end of 1984, she had decided to move again—this time to Seattle. Green and rainy, cheaper and friendlier, not many black folks but lots of jobs for software engineers. By January, Trish Millines was driving the 800 miles north, toward her next adventure. Silicon Valley might have contained a pot of gold for some, but the housecleaner’s kid from the Jersey Shore never found it.
Millines wasn’t the only one heading in that direction those days. A slowing economy and sky-high real estate prices were pushing people out of both Northern and Southern California, and a good number of them ended up in the Pacific Northwest. Portland, Oregon, was now home to a large manufacturing and design facility for Intel. Seattle had Microsoft and Boeing and more. Life was a little slower and considerably more affordable up there; it offered all of the Bay Area’s culture and none of its traffic jams.
Seattle’s metropolitan population spiked by nearly 400,000 over the course of the 1980s. While people came from all over, the conventional wisdom in town was that Seattle was under siege from “Californication.” Seattle’s self-appointed town curmudgeon, newspaper columnist Emmett Watson, likened the California migrants to house cats that had filled their own litter boxes and needed somewhere to do their business; transplants who didn’t change their car license plates quickly enough would get honked off the road.23
But the Californians kept coming. Silicon Valley had turned into a place that didn’t make things anymore. Semiconductors got made elsewhere. Personal computers had reached a sales ceiling. New-age heroes like Steve Jobs hadn’t managed to fend off old-style competitors. The region’s raw materials were no longer silicon and copper wire, but people and ideas. The product came as strings of software code, intangible other than the floppy disks on which they were written. Software was a good business to be in when capital flows were uncertain. You needed less capital upfront, and you didn’t need to sell out most of your ownership to VCs to get started. You didn’t need as large a workforce, and you could hire large numbers of workers as contractors. “Software,” observed Forbes, “is where the future money is.” It turned out that software was where Seattle’s future money was as well.24
THE VELVET SWEATSHOP
When Trish Millines arrived in Seattle, Microsoft was still small. When she came to work at Microsoft as a contractor three years later, it was bigger. When she came on as a full-time employee two years after that, Microsoft had grown to 3,500 employees, inhabiting four buildings in a verdant corporate campus fifteen miles northeast of downtown. “People were there,” she remembered, “because they liked the work.”25
They also were there for the perks. As the Seattle Times detailed in a long 1989 feature on the company, life was very good at Microsoft. Break rooms bulged with free sodas. Nearly every office had a window. Two computers sat on every desk. Workdays were punctuated with midday soccer scrimmages or goofy contests where top executives dared one another to jump in a nearby lake. Making everything more delectable was the money. Nearly every hiring package at Microsoft included options to buy thousands of shares of Microsoft stock. The company had gone public in 1986, making its early employees instant multimillionaires. Young employees would strut around the office wearing lapel buttons reading F.Y.I.F.V.: “Fuck you, I’m fully vested.”
The free sodas and stock options might have been an upgrade from the early days, but the crushing work routine still remained the norm. Gates rarely hesitated to angrily call people out if they missed a meeting, and he practiced the highly unusual habit of working on e-mail at home until late in the night. At Microsoft, “the company does many things to create a pleasant environment,” one employee remarked. But “work definitely comes first. It’s a velvet sweatshop.” Many at Microsoft were not from the Pacific Northwest, but from far-flung places across the U.S. and around the world. But they had little time to experience the city around them. Another employee told the reporter: “There are programmers at Microsoft who after two years have never been to Seattle.”26
Unlike the perpetual job-hoppers of Silicon Valley, many people at Microsoft had never worked anywhere else. Gates and Ballmer liked to hire straight out of college or graduate school; experience at other tech companies was irrelevant at best and distracting at worst. Wearing stock options’ golden handcuffs, and with few other tech companies in Seattle of comparable size and wealth, the people of Microsoft tended to stay put. With a workforce that was mostly male and mostly under thirty, flush with the hypercompetitive and hyperactive vibe set by the two men at the top, the evergreen-ringed campus had “a corporate culture marked by devotion, self-flagellation, and a searing suspicion of the non-Microsoft world.” Another chronicler later described Microsoft as “the frat house from another planet.”27
Looking northward from California, the Seattle behemoth didn’t just seem like it was on another planet. It was the mothership of a hostile alien invasion, relentless in its desire to gobble the software market whole. The friendly days of the early 1980s were long gone. Apple and Microsoft had moved from being business partners to opposing parties in both courts of law and courts of public opinion. For in 1983 Micros
oft released the first version of Windows, its GUI operating system that sprang from the seeds planted by Charles Simonyi when he relocated from PARC three years before. It was a shot across the bow to Apple—never mind the fact that both companies had appropriated an idea first executed at PARC—and it was the beginning of an escalating war that crested on St. Patrick’s Day 1988, when Apple sued Microsoft for copyright infringement.
It was a PR war as well. Microsoft had gotten better at corporate positioning, courtesy of a marketing chief who had once worked at Neutrogena, and what worked for face cream seemed to work pretty well for software too. Gone were clunky, hard-to-remember program names; now every program had “Microsoft” in its title: Microsoft Word, Microsoft Excel. The company mailed out free disks containing Word inside copies of PCWorld. Although Microsoft only sold to other computer equipment manufacturers, it began to blanket consumer electronics shows with announcements of upcoming products.
And along with the launch of Windows came the launch of the public persona of Bill Gates, the boy genius for the rest of us. Steve Jobs had Regis McKenna. Gates had Pam Edstrom, a petite bundle of laser-focused PR energy who made it her mission to turn the unpolished computer mogul into one of Middle America’s most recognizable celebrities. Edstrom got Gates on the covers of Fortune and Time, and she also got him on People magazine’s list of “25 Most Intriguing People.” Taking a page from the Regis playbook, she invited reporters up to Seattle to meet with Gates and other executives, and once hosted a “pajama party” for twenty-five national reporters at the Gates family retreat on the shores of Puget Sound.28
Making it all the more infuriating, from the perspective of Valley engineering purists: Microsoft wasn’t particularly innovative, and it routinely released buggy, clunky products. Gates had taken a page from the book of Big Blue, the company that had come late to the computer market and come to dominate it utterly: “Don’t be the first to introduce the technology. Be second, and make money on it.” The Seattleites used their first customers as product testers for a more functional second edition. That is, when they managed to release anything at all. And consumers might whine, but Microsoft’s most important market was its enterprise customers. The business market didn’t need something to be perfect. They just needed something to be good enough, and they needed it fast.
Gates was famous for promising to deliver software to computer manufacturers well before Microsoft had even designed it. In 1983, Valley venture capitalist Ann Winblad put a name on it: vaporware. The name stuck—even more so when Gates and Winblad began dating the following year. Love and loyalty led Winblad toward a more positive spin on Microsoft’s release patterns. “Hey, talk about willingness to take risks!” she later remarked. “The company gets a new one out there, lets all this stuff come back, thinks about how crummy this stuff is, and then goes after the right stuff.”29
With every new round of software and successive version of Windows, Microsoft edged further into Silicon Valley’s territory. Then, in May of 1990, Gates & Co. released Windows 3.0 and blew the doors off the barn. At last, here was a new operating system that was ready to live up to its promises. Proud mother Mary Gates called the day of its release “the happiest day of Bill’s life.” With Windows 3.0 and the updated versions released in quick succession in the early 1990s, Microsoft gained staggering market share and earned the eternal enmity of Apple and its fanboy universe. The blue screens of DOS gave way to WYSIWYG programs that offered all the user-friendliness of the Mac at a PC-platform price. And conveniently bundled up with this new OS were Microsoft products that riffed on the era’s bestsellers. Lotus had Notes and 1-2-3; Microsoft had Word and Excel.
Now, the headlines about Microsoft weren’t just about a new-generation CEO; they were about a company that was taking over. “Mighty Microsoft Breeds Fear, Envy,” blared PC Week. Business Month called the company “The Silicon Bully.” Around the cubicles of competitor tech companies, engineers grimly referred to Gates’s company as “The Death Star.” The destructive swath that Microsoft cut through the software industry, Lotus’ Mitch Kapor concluded darkly, had turned early-1990s Silicon Valley into “the Kingdom of the Dead.”30
THE NETWORK IS THE COMPUTER
As Bill Gates trained his big guns on Silicon Valley, Scott McNealy was spoiling for a fight. McNealy was one of four graduate students who had come together in 1982 to found Sun Microsystems, a company whose hockey-stick growth showed Silicon Valley how much market potential lay beyond the PC.
Here was another enormous success story made possible by the Valley’s distinctive ecosystem: Scott McNealy and Vinod Khosla, Stanford MBAs; Andy Bechtolsheim, Stanford computer scientist; Bill Joy, Berkeley engineer. Added into the mix was another Berkeleyite, John Gage, who had spent the 1960s organizing antiwar marches and became Sun’s adult supervision—first as its sales head, and then as its chief scientist. John Doerr of Kleiner Perkins backed the deal in one of his first investments after leaving Intel to become a venture capitalist. It was a very good bet. By 1988, Sun had annual sales of more than $1 billion and CEO McNealy was being celebrated in the pages of The Wall Street Journal as “the bad boy of the computer business.” He relished the attention.
Like Bill Gates, McNealy was a child of privilege, who had grown up in the leafy suburbs of Detroit, the son of the man who ran marketing for American Motors in the 1960s. McNealy learned the value of a good sales pitch from his father, and he also learned tough lessons about holding on to market share as he watched his father’s company get pummeled by Japanese competition and its mightier domestic rivals. Like Gates, he went to Harvard; unlike Gates, he finished his degree. From there he went to Stanford for business school, part of the wave of would-be entrepreneurs flocking west at the dawn of the microcomputer era to make their fortunes. The good-natured and no-nonsense McNealy was a workaholic, an unrepentant bachelor, and an ardent libertarian. When he finally tied the knot and started a family, he named his son Maverick. And he and his partners were utterly consumed with turning Sun into a major player in both the hardware and the software business.
While Sun’s workstation made the company’s reputation, it developed software for all kinds of computers that enabled file sharing across local networks—a market breakthrough in an era dominated by static, sit-on-the-desktop machines. The team announced an even bolder plan in 1987 to do for workstations what the IBM PC had done for personal computing: invite other companies to build clones that used the same hardware and software design. The gambit worked, creating a new ecosystem of workstations that, increasingly, were connected to one another via routers and networks.
Sun wasn’t a computer company, it was a systems company—designing and developing its circuit boards and software, then subcontracting or purchasing all the rest. The future power of computing, McNealy and his colleagues could see, lay in a return to the networks created by time-sharing systems of old. Lone computers on desktops could only do a fraction of what was possible if you connected computers to one another and shared their power. “The network is the computer,” proclaimed Sun’s marketing tagline.31
By the early 1990s, Sun was raking in about $1 million every ninety minutes, and it was attracting the Valley’s star engineers and highest-octane managers. Yes, the pace was punishing there, too, but it also included a particularly hypercompetitive strain of goofing around that was possible only in Silicon Valley. Along with the Friday afternoon beer busts and team-building events aplenty, there were annual April Fools’ Day pranks that workers played on the company’s senior executives, with the execs gamely playing along. Pranksters frequently resorted to sabotage of the top dogs’ personal possessions, including very expensive cars. One year, workers put Bill Joy’s car in a pond. A couple of years later, another group moved Andy Bechtolsheim’s Porsche 911 into his office and set a massive fish tank inside it. These were jokes that were funny only if the victims were multimillionaires.32
Sometimes compa
ny “fun” veered into alarmingly misogynistic territory. Each morning, the engineering staff would launch the in-house computer systems that powered the company’s operation—each of which had been given women’s names by their male creators. In keeping with the highly gendered computer lingo, the verb used to describe bringing a computer system on line was “mounting.” One female engineer angrily reported the results to a supervisor: “Every morning I have to listen to my male colleagues yelling down the hallways, ‘I am mounting Cathy now!’ or ‘I mounted Judy a few minutes ago and she is purring!’” As another female employee put it, a career at Sun was like living “in the boy’s dorm.”33
Like Fairchild and Apple before it, Sun spawned an entire ecosystem—both of related products and connected people. There was Silicon Graphics, developer of workstations and software that brought 3-D modeling and sophisticated graphics capabilities to architecture firms and Hollywood studios. There was Cisco, a company that sprang out of Stanford’s Artificial Intelligence Lab in 1984 and whose hardware made Sun’s computers into networks, and whose routers would soon power much of the Internet age to come. There was MIPS, maker of microprocessors and computer systems designed for the workstation platform.
Executives at Sun and the other companies of the turn-of-the-1990s Valley ecosystem—both workstation and PC—went on to leadership roles in the companies of the next generation. Others, like the semiconductor generation before them, became venture capitalists. People moved on, but they stayed in the game. Such talent churn was distinctive to the Valley, and the other high-tech planet up in Seattle couldn’t yet replicate it.34
The Code Page 34
