Apple Reference & Presen…rary 8 (Internal Edition)/Apple R&P Lib Internal v8.0.iso/3-Presentations/Apple Computer Inc./Industry Competition/ROMs/Software/Selling Against Windows 6⁄90

Text File | 1990-06-24 | 25.3 KB | 450 lines | [TEXT/GEOL]

Apple Confidential / Need to Know


John Patrick Russell on Selling Against Windows


[These are two items from John Patrick Russell (US Central Operations).  The
first is from the HotLinks discussion of Windows 3.  The second was written to
help sell Macintosh against Windows at P&G.  Both of these are great analyses
from someone who deals with real customers on a daily basis.]


------------------------------------

The challenge we have with answering this question is the classic sales
challenge of all time:  “What is the REAL question being asked?”  And in this
discussion, the answer to THAT question begins with this question:  “Who is
doing the asking?”


The first kind of person is an end-user.
If it's an end-user...a human...one of ‘the rest-of-us’, the answer is really
quite simple:  “Here, let me show you”.
It is the old hands-on imperative that has driven so much of what Apple does.
In 20 or 30 minutes I can find out what someone does, how they do it, and show
them things about the Mac that would be impossible for them to do on any other
machine.


The second kind of person is a technology-type.
We usually call these the “MIS-types”, though that is no longer inclusive
enough.  These types of people are the best and the worst for us.  If they are
Mac fanatics, they are our best inside evangelists and do more good for us than
any 20 other bodies.  If they are DOS or Windows, or OS/2, or UNIX, or
Mainframe or whatever, they have historically been our biggest pain in the
neck.  It is this group of people who over the years have said: "Mac is a
closed system, so we won't go with it" then "Mac isn't data compatible with our
'standards' so we won't go with it" then "Mac isn't application compatible with
our 'standards' so we won't go with it" then "Mac isn't OS compatible with our
'standards' so we won't go with it" then "Mac isn't network compatible with our
'standards' so we won't go with it".  Over the last few years we've checked off
each of these check-off items and now the line goes something like:  "We now
can get everything the Mac has on a DOS/Windows/OS/2/Unix platform, so we won't
go with it".
There is a lot of turf protection going on in this group, some level of fear,
and a lot of responsibility.
The benefits of the Mac for these people is arguably greater than for either of
the other kinds of users.
(NOTE:  These kinds of users are almost wholly in the 'business' world.)
OASIS is the real kicker for these folks.  OASIS is the proof that Macintosh is
substantially different from any other kind of personal computer, and that
difference is in the areas that make the most difference for what they do.
What do they do?
1) Give PC's to non-technical end-users ... and ...
2) Support those end-users, whose needs, jobs, and responsibilities change
   uniquely and often.

The “user-interface, thousands of applications” arguments still work well for
#1, but our architecture works wonders for #2.

(Bob Berry, VP of Businessland service, says that corporate customers are
spending more than 50% of their computing budget on service and support,
including training, as compared with 30% for product purchases).

When these customers have a glimpse of the Mac architecture and how it works,
it is then quite easy to talk about unique SYSTEM advantages like the Chooser,
One-button Installer (network aware), Plug-and-Go networking (show then the
Chooser and THEN plug the network in so they see the zones and devices
appear...then tell them about this killer AppleTalk we give them for free...),
Peripheral device support (SCSI, obviously, but also NuBus monitor support,
ADB, Super smart disk drives...etc. etc.
Depending on the customer, you would want to focus on particular aspects of the
OASIS model to drive the point home...and an often overlooked aspect that we
should mention at least in passing is that all of tho modules in our
architecture (most of which are literally built-in every Mac's ROM) are an
entire development environment prepackaged and ready to go.  One of the most
undersung glories of the Mac is the incredible development environment that
comes with every Macintosh...I mean the ROMS and Op System.  One of the best
ways to show this is to run Hypercard and create a new text field.  Change the
font, the size, make it opaque and give it a scroll bar.  Explain that the
reason any user can do this SOPHISTICATED USER INTERFACE PROGRAMMING on the Mac
is that all of the code to do that stuff is built in every Mac.   It's part of
the Mac system.
Then reiterate that the code to do numerics, peripheral support, (multiple bit
depth) graphics, text, IAC, sound, networking, virtual memory, SQL, etc., etc.,
etc. is already part of every Mac.


The third kind of person is a business person.
This kind of person is very likely bottom line oriented.  They often don't have
any technology bones to pick, but they are probably very aware that over the
last 10 years billions of dollars have been invested in personal computing
technology and the productivity of the white collar work force has declined.
They are concerned with issues that require technology, but where technology is
the tool, not the focus.
For this group, the idea is to position Apple as being the only computer
company that is focusing on connecting the two most important resources of the
business:  its people and its information.
The Mac Advantage stuff helps us show our focus on the PEOPLE of the business,
and how that focus saves big business dollars.  OASIS shows how the
architecture of the Mac allows the business PROCESSES to change over time,
without major disruption of the information flow or the (more importantly) user
training and effectiveness.  And finally, Apple's Corporate philosophy is
geared to empowering people to make a difference, and most business people are
trying to figure out how to do that in the fast changing and careening
competitive international marketplace.


Woven into these 3 major perspectives on Macintosh are the answers to most the
'cheap clone' questions.  It may be very true that you can get a full boat 386
windows ready clone for $2200...but those machines play an extremely small part
in corporate America (user #2.  These guys just aren't going to buy a Sun Moon
Stars machine, no matter how cheap it is).  Corporate clones are Compaq's or
Zenith's or Tandy's (naw...not really Tandy's), and the incompatibilities of
even those 1st tier clones from an architectural point of view cause a lot of
problems.  So for most Corporate users who throw out the "I can get a 386...for
$2200" argument, it's a smoke screen to see what we say about it.

For an end user who wants to know why we're so overpriced, I will stack an
SE/20 against ANY windows machine at all, and with a street price of less than
$2000 (sometimes far less) I will show them the best pc at the best price on
the market...with upgradeability to an SE/30 and System 7 in their future.  In
fact, I will argue that a Mac+ is a better graphics machine than any of the
AT-class machines, is far better integrated into the Macintosh product line,
and has far superior networking, applications and useability than any
competition, for a street price well under $1500.

Now for the Corporate customer who says "we're looking for 1500 secretarial
workstations with big monitors, and those punky small SE screens just won't do
the trick"  they've hit on one of the holes in our product line.  I would
suggest that the rep get them a level 2 nondisclosure and let us tell them
about the ...  well, you know.

I agree with the general consensus that Apple's biggest problem is we don't
know how good our product REALLY is.  And the delta is only going to get larger
as we move into the systems of the 90's.  The interface question was the BIG
deal of the 80's.  It's a small deal in the 90's.  Except for everybody who
doesn't have it yet.  The big deal of the 90's is FACILITIES (I'm swiping this
from Gartner Group lingo...they say FA-CI-LI-TIES, we say MA-CIN-TOSH).
Facilities are things like built-in e-mail, data conversion, video /sound/
midi/simpte support, networking, DBMS (SQL), multimedia tools, etc.
Y'know...all the stuff that SHOULD be built into the computer, easily and
universally supported and available to all users.  Once people get the hang of
how the Mac is put together, we can show them how we are going to add things
over time.  Once we start talking about the REAL advantages of the Macintosh we
have a much better chance of getting them one.


-------------------------------


Apple Computer definitely agrees that the question of personal computing
platforms should be looked at from more than one perspective.  Hardware
(OEM's), Software (ISV's), and Users are certainly three important
perspectives... but there are at least two more that should also be included:
Operating System Software and Peripherals.  I will include reference to each of
these areas below.

From the hardware manufacturers perspective:

Macintosh is proprietary, in the sense that only Apple manufactures it, but it
is certainly not a closed system.  There is extensive documentation on all
aspects of the Macintosh system available to anyone who wants it in the 6
volumes of Inside Macintosh (available from Addison/Wesley) and the associated
Technical Notes that are produced by Macintosh Developer Support.
Apple also looks to the industry in general for technologies that will produce
better systems.  Some of the industry standard technologies Apple has currently
implemented are listed below:

NuBus   (the industry standard bus architecture Apple chose for the Mac);
68xxx   (the industry standard microprocessor platform Apple chose as the
         processor for the Macintosh);
6888x   (the industry standard floating point coprocessor platform Apple chose
         as the math coprocessor for the Macintosh)
SCSI    (the industry standard Small Computer Systems Interface Apple chose as
         the primary peripheral connection for the Macintosh);
RS232   (the industry standard asynchronous serial port Apple chose as a
         standard interface with all Macintosh's.)
PostScript   (the industry standard page description language for producing
              WYSIWYG printing)
AND.......
Token Ring
Ethernet
Coax/Twinax
TCP/IP
SDLC
3278/3279
LAT
APPC
Unix
MIDI
ISO9660
SQL

Apple has one of the most open platforms on the personal computer market.  This
is particularly true if your measure is how much support the computer gives you
to mix and match different technologies and standards.  Everything I listed
above is made or sold directly by Apple.  There are many more (and variations
of the above) industry standards that work with Macintosh that are made and
supported by the community of developers and manufacturers who support the
Macintosh platform.

In addition to this vigorous support of the open systems and standards that
exist in the industry, Apple also develops and implements technologies that are
currently not implemented by other personal computer manufacturers or industry
standards.  I will list a few of these:

MULTIFINDER (A cooperative, multitasking environment based on a desktop
             metaphor, that allows multiple programs and processes to be active
             at the same time.  A short list of the current enviroments
             supported by Multifinder (simultaneously, if preferred) include:
             Unix, DOS, Macintosh, 3270, 5250, VTxxx, Token Ring, Ethernet, and
             Localtalk.  Using the functions provided by our Scrap Manager, any
             data can be directly cut and pasted among any of these
             environments).
SCRAP MGR   (A set of routines and data types that allows moving information
             between applications)
SOUND CHIP  (digital sound circuitry built into all Mac's)
ADB         (Apple Desktop Bus - a low speed communications bus for desktop
             peripherals such as Keyboards, mouse, digitizing tablets,
             faxmodems, etc.  Up to 16 devices can be daisy-chained on ADB)
FDHD        (the disk drive built into all Mac's (except the Mac+) that allows
             you to read,write and format 400K, 800K, 1.44MB Mac disks and high
             density IBM disks).
APPLETALK   (A rich family of network protocols and managers allowing the
             Macintosh to be a fully functioning member of a network directly
             out of the box.)
QUICKDRAW   (A powerful graphics language and environment)
HYPERCARD   (A rich and powerful development language and graphics environment
             that allows even casual users the ability to create custom
             applications directly on the Macintosh.  It has access to all
             architectural elements of the Macintosh (networks, graphics,
             sound, video, etc.)

These technologies (and dozens more) allow Apple to bring functionality to the
Macintosh that is currently not available on any other personal computing
platform.  More importantly, it allow Apple to bring this functionality to the
USERS of its personal computers in a way that allows them to configure and
implement the kind of computing they desire.

Finally, Apple is actively licensing select pieces of its operating system to
other members of the industry to promote consistency and compatibility between
platforms.  The most obvious examples of this are our licensing of AppleTalk
(network protocols) and TrueType (font technology).


Comparing Apple to Microsoft vis-v-vis open systems and standards is an
interesting exercise.  There is an immediate similarity in that both companies
have proprietary products (Apple makes the Macintosh and Microsoft makes DOS,
Windows, and OS/2).  Both companies sell or license those products to people or
other companies.

There are also areas of great difference.  Apple makes the computer hardware to
match its operating system and spends a great amount of time and effort to
integrate the capabilities and operation of the combination.  Since Microsoft
doesn't make hardware it doesn't have this ability, and since it licenses its
operating system to hundreds of different hardware vendors who have very
different hardware platforms, it has no way to standardize important
technologies into its operating system.  There is no standard way to get past
the 9 year old 640K memory limits of DOS.  There is no standard way to do video
or color or sound.  There is no standard way to implement an application
interface, and no standard way to add a graphic user interface or sophisticated
networking.  There is no standard way to implement an I/O bus architecture.
There is no standard graphic model, no standard for interchanging data between
applications.  No standard for running different operating systems, or multiple
operating systems.  No standard for supporting multiple applications from
different operating systems on different networks simultaneously.  This list
goes on.

And there is a result of the Microsoft approach to proprietary products.  Over
the last 10 years they have produced 4 versions of DOS, 3 versions of Windows
and 2 versions of OS/2 (with a third already announced in the industry).  There
have been incompatibilities between the various versions of DOS, major
incompatibilities between the various versions of Windows and major functional
differences between the two versions of OS/2.  This has caused massive
disruption in the applications base and in the peripherals industry in terms of
support and use of 3rd party products.  Obviously DOS and OS/2 are completely
different operating systems, so there is no compatibility between them at all
(OS/2 has an emulation mode, but that's a different thing).  Windows as a
graphic environment running on DOS has the inconsistencies and limitations of
DOS, and adds some complexity and capability.  And finally, because of this
approach, the soft costs associated with personal computing on a Microsoft
platform (support, training, retraining, etc) are 1/3 to 1/2 more than they are
on the Macintosh platform.  In personal computing today, soft costs are
approximately 70% of the life cycle costs of any pc platform, so this 30-50%
increase in soft costs is REAL DOLLARS.

Apple on the other hand has gone through at least as many revisions to the
Macintosh operating system over the last 6 1/2 years, but the results have been
very different.  Apple's approach has been to aggressively implement new
technologies into the Mac while improving the consistency and intuitiveness of
the basic platform, and making it easier and easier to use.  So old users can
take advantage of new things right away, and new users can begin using their
Mac's quicker.  These guiding principles of Macintosh design are certainly not
limited to only Apple.  The thousands of 3rd party applications developers have
continued to improve their applications consistency and ease of use within the
Mac environment, and the peripherals that you can buy to go with the Macintosh
are the easiest in the industry to set up, configure and use.  So as Apple has
changed and improved the Macintosh and its operating system, the applications
base and peripherals have continued to work, and in many cases have been
enhanced by Apple's changes.

A final, more subtle concern.  When hardware becomes commodity (as is the case
in the DOS world) the hardware manufacturers either 1) do proprietary things to
make their machines different (as in the case of Compaq and their new high end
machine) or they 2) quit making profit losing products.

Interestingly, the best example we have of the danger of commodity products in
the personal computer industry is what IBM did in 1987.  Their IBM PC-AT was
the model most cloned in the world.  IBM was losing market share and price
margin at an aggressive rate.  Their response to that commodity situation was
to TOTALLY DISCONTINUE THE PRODUCT.  They dropped it completely, and announced
a new computer that had important PROPRIETARY components that could not be
cloned.  This was not done to bring great new technology to the market and let
users do great new things with personal computers.  It was done to protect
their eroding market share.  The result on the industry was confusion and
incompatibility and major insider fighting and the slowdown of new
technologies.  It is inconceivable that the users of these technologies have
gained anything like an advantage because of these battles.

And even though there has been a barrage of new hardware products (386, 486,
RISC, etc) most are still running DOS.  They are not running new products like
HyperCard, nor are they moving data back and forth between applications or
environments any better than they were 3 years ago on their AT's.

It is perhaps true to say the COMMODITY BREEDS CONTEMPT.  It certainly doesn't
breed state of the art, and it certainly doesn't bring advantage to the
millions of users of that technology or the companies that are counting on them
to become more productive and competitive via their technology tools.

Finally, the price performance between Mac and a windows machine.  It is
certainly true to say that a Mac+ with 4MB of memory is a better multitasking,
grahics computer than ANY 286 computer on the market, and the price of a real
Mac+ system (with hard disk) in this configuration would be around $2000
(street price).  As you move up into the SE or SE/30 range the performance
begins to skew seriously away from the Windows platforms toward the Mac, and as
you move into our modular lines the capabilities of the machines are even more
pronounced.  Today the SYSTEM cost (life cycle cost) of a Macintosh is much
better than any of our competition, and the performance of the Mac is far
superior.  In the next 6-9 months the HARDWARE cost of the Macintosh will
become much more competitive, while the performance of ALL Mac's begins a new
quantum leap away from anything the competition has (System 7).  The System
cost of the Mac's will become even more pronounced.


On the Software Developers Perspective:

Since I'm not a developer, some of the nuances of this discussion are better
left to others.  I will suffice it to say that since Windows is a graphics
environment running on DOS, the robustness and adaptability to the future are
in serious doubt.  I have never heard that DOS was considered a robust or
future oriented OS.  Everything that Microsoft does with Windows is done to
remove limitations of DOS...but since it is running on DOS there is a very
serious architectural schizophrenia going on.  If your OS is schizophrenic, it
is very difficult to built a consistent, well-behaved environment.

On questions of the market...it is certainly not huge.  There are estimates
that out of the existing 50+ million DOS pc's in the world, less than 10% are
really capable of running Windows.  (If performance is an issue).  That is
assuming that the base machine is a 386 class product.  That is the same market
share that you have with the Macintosh.

Also, the development community is quite familiar with the Macintosh, and they
already make proportionately more money from their Mac development than they do
from their DOS development.  In the whole market, Mac makes up about 8-10% of
the installed base, but accounts for 25-30% of the software sold.  Developers
know this, and they know they can make a lot of money from Macintosh users.
System 7 certainly is only going to improve their ability to make leading edge
applications, and they know that the entire installed base of Mac's will be
able to take advantage of it.

Finally, the development community knows (and has been told by both IBM and
Microsoft) that Windows is only a niche OS, and the REAL future OS is OS/2
(well, the version of OS/2 that will be out next spring...the 386 version).  So
any momentum that may develop during the next few years will certainly be
curtailed by the fact that Windows is already an obsolete OS from its creators
point of view.

And there is always that disconcerting reality that as an applications
developer, your major competitor is the same company that is making the
Operating System that you are relying on to bring you a competitive advantage.
In an environment where months can make a difference to the success of a
product, and where upgrades to take advantage of new features are reliant on
timely and bug free releases of the Operating System that contains those new
features, and where the company that is responsible for that Operating System
is also making the products that will compete with you ...  you get the point.

Apple does not have that particular problem.  We don't compete with our
developers...our energies are focused on implementing the technologies they
need, and helping them produce great products.



FROM THE USERS PERSPECTIVE:

History is our greatest ally here.  The history of Microsoft's operating
systems from the users perspective is certainly dismal.  A horrible interface
requiring memorization and syntax.  Applications that have no consistency or
intuitiveness.  Virtually no integration among the pieces of the system (video,
memory, peripherals, networks). And lastly, set-up, installation and upgrade
procedures that require excessive computer knowledge and the patience of a
saint.

When you multiply that across their various versions and incompatible different
operating systems the problem is only magnified.  Windows 3 certainly doesn't
offer any hope that this scenario has changed.  It is the third version (in 5
years) of a graphics environment that runs on DOS, aimed at the mid level pc
platform.  It is certainly not the preferred platform for leading edge
applications in the 90's, and it is certainly not the kind of pc architecture
that business or education wants to implement as an integral and important
component of an information architecture.

On the other hand, the Macintosh has always been known as the computer for
people.  In 1984, long before it was a standard in the business community, the
Macintosh was a huge success, and was famous for, its incredible graphics,
interface, consistency and intuitivess (all USER-oriented technologies).  AND
IT WAS FUN.  (If you want to see something fun, watch the Installer on System
7.  Even before you can DO anything with the Mac it makes you smile).

Since that not-so-inauspicious beginning (building computers for people) we
have become the leader in implementing leading edge application-oriented
technology; leading edge personal computer operating system technology; leading
edge networking and communications technology; and integrating these
technologies into a computer that is still simple and friendly and conducive to
non-computer type people.

Quite a user benefit.

But today we're looking at the 90's.  The user questions today aren't how to do
good graphic user interfaces, how to be consistent, how to run multiple
applications simultaneously, how to move data back and forth between those
different applications easily....those are all 1980s questions.

The user questions today are:  how do we do sound, how do we do video, how do
we do simulations and visualizations, how do we talk to our computers, how do
we integrate our computers with our voice mail, how do we integrate our
computers with our video devices, with our TV's?  How do we customize our
computers to be able to go out into the worldwide data jungle and get just what
we need, when we need it, regardless of where it is?

No computer but the Macintosh has answered the 1980s questions yet.  No
computer architecture but Macintosh is busy implementing the answers to the
90's questions.

Apple believes that if it is up to the users, Macintosh will be the computer of
choice...
which is, after all, the most important user option.