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Wednesday, October 05, 2011, 07:00 pm PT (10:00 pm ET)

Steve Jobs: a lifetime of visionary disruption in advancing technology


An Insider: 1990s

While building NeXT, Jobs had also acquired the graphics division from George Lucas' Lucasfilm for $10 million, hoping to create high end graphics hardware systems under the new name Pixar. That venture was ultimately no more successful than NeXT's hardware, targeted largely at higher education and the professional workstation market.

However, Jobs saw potential in the application of computer graphics as a content production company, and subsequently formed a partnership with Disney to produce computer animated films that Disney would finance and distribute. The resulting movies, beginning with "Toy Story" in 1995, ended up being a series of box office successes over the next decade, making Pixar the most successful animation studio in the world and culminating in the 2006 sale of Pixar to Disney for $7.4 billion, a transaction that made Jobs the largest individual shareholder of Disney and a member of the company's board.

In parallel, Jobs' efforts to find a market for NeXT's advanced technology were increasingly thwarted by problems. After Microsoft prevailed in Apple's "look and feel" lawsuit claiming infringement of original Macintosh concepts, the company was emboldened to appropriate not just Apple's efforts, but also NeXT's. In 1995, Microsoft introduced Windows 95, which borrowed as much of its look from Jobs' NeXT environment as it did from Apple's Macintosh.

Microsoft had also waged a vaporware war against NeXT, with Bill Gates claiming his company would soon deliver the same kind of object oriented development tools in Cairo, a project that never materialized as originally described.

Again, Jobs reached out to form partnerships with Sun, HP and others. After the hardware business end of NeXT failed to gain traction, Jobs rapidly transitioned the company to focus on developing advanced software development tools and a highly intuitive user environment, creating a layer of software that could potentially run on any hardware.

And once again, Jobs' partners ultimately double-crossed him, with HP leaping to join IBM and Apple on a competing partnership called Taligent, while Sun abandoned Jobs' vision for an open specification for a software development environment based on NeXT's technologies, after working with NeXT to create OpenStep, in order to instead pursue its own Java, a language and runtime environment that similarly worked to displace the SmallTalk-inspired work NeXT had developed a decade earlier.

By 1996, Jobs had focused NeXT upon web applications as the most viable option for applying its technology, but the near collapse of Apple provided a new opportunity for the company. At the end of the year, Apple acquired NeXT for $429 million, aiming to use its powerful, flexible operating system and advanced development environment to revitalize its increasingly outdated Mac platform, following the collapse of both the Taligent partnership with IBM and Apple's own internal Copland project.

Jobs initially appeared hesitant to become involved in running Apple, which at the time had profound operational problems, a tarnished brand, and was experiencing staggering financial losses. Apple was also facing increasing pressure from Microsoft Windows, which had erased much of the Mac's differentiating features while promising to deliver a graphical computing environment at a lower cost than Apple by leveraging the vast economies of scale in the PC industry.

As Jobs examined the state of Apple ten years after his departure, he began to identity a series of things the company had to stop doing, while also creating a strategy for recovery centered around innovation. Jobs made aggressive cuts to Apple's complex product lines, resulting in a radically refined number of Mac models just one year later and a termination of poorly conceived Mac OS licensing program that had originally been created to imitate Microsoft's business model.

Instead, Jobs pushed through a public agreement with Microsoft that exchanged a vote of confidence by Microsoft in Apple (via both a publicized investment in stock as well as a commitment to bring modern versions of Office software to the Mac) for a cross licensing agreement that terminated longstanding legal challenges Apple had in play against its Windows competitor.

At the same time, Jobs rapidly pushed the new Apple to deploy NeXT's state of the art web application technology to build a sophisticated online store capable of selling custom built Macs directly to users. Jobs also recruited Tim Cook from Compaq to help solve Apple's operational mess, which included closing the company's complex network of factories and storage warehouses that were taxing the company's productivity and profits.

Adapting work Apple had previously done to create a Network Computer, Jobs unveiled the iMac in 1998 as a signature new distinct offering that would define the look of its products around the millennium. Applying a industrial design team lead by Jonathan Ive, who had joined Apple in 1992 before being promoted to lead Apple's design in 1998, Jobs worked to build a recognizable, high quality product experience around the Apple brand.

Jobs also initiated a retail store effort within Apple, recruiting Ron Johnson from Target to lead the company's retail push and installing Millard Drexler, the chief executive of J Crew and former CEO of the Gap, on Apple's board.

By the end of the 1990s, Jobs had turned Apple from a beleaguered failure into a regularly profitable company with a revitalized brand and a clear future strategy, although there was still considerable doubt about whether Apple's hardware business could ever become anything more than a niche business servicing a dedicated following of loyal customers.

On page 4 of 5: A Disruptor: 2000s