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The Story of Apple, Microsoft…and Xerox?

A detailed summary of PARC, Apple, and Microsoft

The year is 1979. Computers still function by writing lines of commands into a console. Engineers at Apple Computer are stretched to the very limits of their creativity working on a secret project called the Macintosh. Their problem: how to make computers user-friendly? Most people did not know how to write commands into a console. Rumor had it that Xerox’s Palo Alto Research Center (PARC) had a revolutionary new computer called the Alto. After furious negotiations, Jobs and the Macintosh team were finally given a tour of the top-secret projects inside PARC.

The Xerox Alto

Jobs and his chief engineer, Atkinson, finally got to the crown jewel of PARC, the Xerox Alto. Rather than typing commands onto a screen, Larry Tesler, who was conducting the demonstration, would use a fancy device called a “mouse” to click on icons, and windows would show up! Steve all but started tripping all over himself, proclaiming the technology as revolutionary, and questioning why Xerox was not commercializing it.

A tale of two OS’es

After returning to Apple, Atkinson had found inspiration in perfecting the Macintosh’s Graphical User Interface (GUI). Forget command lines! The Mac needed a mouse and a word processor and an email client with windows and icons and third party software providers. Microsoft was the best software provider at the time, so Apple and Microsoft decided to collaborate, but Apple feared that Microsoft would copy their software. The two created a temporary non-compete agreement that allowed Apple to ship the Macintosh before Microsoft could create their own GUI.

The Macintosh was delayed, and Microsoft seized the opportunity to make a surprising announcement. It was making an operating system called Windows.

Jobs Confronts Gates

Steve was furious. Granted the Macintosh was delayed, he still felt Bill had betrayed their verbal agreement through exploiting a loophole in their contract. Bill agreed to fly down to Silicon Valley on a day’s notice. Inside the conference room where Steve and Bill were meeting in the presence of Apple engineers, Steve went into a fit of rage, accusing Bill of copying the Macintosh and stealing from Apple. Bill listened patiently until Steve was finished, and famously responded, “Well, Steve, I think there is more than one way of looking at it. I think it’s more like we both had this rich neighbor named Xerox and I broke into his house to steal the TV set and found out that you had already stolen it.”

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