Monday, June 11, 2007

Thanks to Apple... Congratulations on 30 years

Techcrunch posted a "30 years of Apple" blog entry a few days ago - Wow, the memories came flooding back! So I responded, and I re-post my response here. And there actually is an IPTV tie-in to all of this.

I worked at an Apple dealer in So California (Computer City) in 1981-1986, managed its San Diego store for a few months. We carried Osborne, Grid, Altos, Vector Graphic, IBM, Apple, Compaq… Remember when the Apple ][ became the //e.

Back when Apple had a rep firm instead of a sales force, we would get all excited on (i think it was Friday) when the rep would come in with a big wad of money and peel off hundred dollar bills for every Apple /// sold. A local accounting firm bought dozens of them, and I used the proceeds to put the earnest money on my first house and partially pay for my wedding reception! Those were the days when 23 point margins were the absolute floor for a sale, and you had to get permission from the owners to sell at lower margins. (”only if it’s more than 50 units..” - unheard of for a bunch of kids running a retail computer store! Heck, our technician was only 15 - we used to have to take turns giving him rides home because he was too young to drive)

Then Businessland came into our market and lured many of us to sell to corporate accounts. We did pretty well there - must businesses were buying their first computers. But Businessland was not an Apple dealer and it was like pulling teeth to get a Lisa for a guy who used to buy from me at my old dealership and absolutely wouldn’t buy from anyone else. But he had to have his Lisa. I can’t imagine any computer mfr bending their channel marketing rules like that today!

In the mid-late ’80s, the phone companies all tried to sell computers. The thought process being that if some little upstart like Businessland could be so successful selling toy computers, imagine how successful the Telcos could be selling computers AND phone systems! PacTel InfoSystems was started by the West coast RBOC, and Will Luden, of the Luden’s Cough Drop fortune, was put in charge. They had absolutely NO CLUE about computers - in fact, they refused to do any tech support on a PC because it was “outside the demarc” - meaning that it was customer premises equipment, not part of their network, and therefore outside their domain. The “telcos in the computer business” phenomenon was short lived, and probably accelerated the demise of the full=service computer dealer (who was already being undermined by low-margin clones).

I was Northern Telecom’s (now Nortel Networks) alliance manager to Apple from 88 to 93, and wow we had fun. We had full access to Apple’s skunkworks (and I had a counterpart that had wide range in Northern Telecom and Bell Northern Research). One of our projects, “MacPhone,” was introduced commercially in 1990 as Meridian TeleCenter - basically a Mac hooked up to the RS232 port on the back of a Meridian PBX telephone set. The Mac ran a software program (developed by a bunch of guys at BNR in Ottawa and Mt View Calif) that worked all the features on the phone that nobody would learn how to use, such as conferencing people together - but it was all point and click. The Meridian PBX used an ISDN-like 2B plus 2D communications link, so it could send commands into the PBX.

A year later, a third-party developer was hired to add a video codec board to the Mac, which added full duplex videoconferencing (H.261) and screensharing (over circuit-switched data) to "MacPhone" . We also got it to work over Switched-56. At one point, the product team had people in the US, Canada and Australia working on it.

In 1992, it was the first third-party demo at Apple's Worldwide Developer's Conference (WWDC). The Northern/BNR team wheeled in a whole PBX for the demo! It sold a lot of Macs for Apple, into universities and businesses, and a lot of switching equipment for Northern Telecom (but very few customers actually bought and used the product - it was mostly used as sizzle to sell the steak).

The Northern Telecom sales people and their channel partners totally didn’t get it! And after about 1992, Apple lost interest in this kind of technology leadership as well. John Sculley left. The 90s were a dark time for Apple - it’s amazing that they survived (imagine if Sun had actually bought Apple, in a parallel universe).

Apple refused to go to the clone business (well, they did for awhile, and Jobs shut it down when he returned to Apple in the 90s. In retrospect, he did absolutely the right thing). Apple’s full control of everything from its OS to its industrial design and its sales outlets was something we would never have imagined back in the 80s but it’s certainly a major key to their success now. Good for them!

So, now the obvious question, since this is Steve's tvstrategies IPTV blog....

What does ANY of this have to do with IPTV?

For starters, Apple is one of the leading product designers in the world. As a product manager, I've been involved in usability research and one of the old adages of Web design holds doubly true today: "If it's more than 2 clicks away, you've failed." Apple understands this.

Also, "convergence" is nothing new to Apple. They worked with Northern Telecom to get an edge in a new kind of communications called Local Area Networking (NT created the method that was standardized as IEEE 802.9), and the two were doing "convergence" before almost anyone else (except for the TeleCompaq in the mid-'80s).

Every IPTV middleware vendor - including Microsoft, now that Steve and Bill are all kissy-kissy again - should take some guidance from Apple.

All this shows how far the industry has come: the phone companies and computer companies are not only talking, but they are largely beginning to understand one another and what's more, they have become part of one anothers' strategic plans once again.

Except this time, the stakes are much higher.

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