Apple and Novell have more in common: Wasted Research Money
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By MIKE LANGBERG
Mercury News Staff Writer
Apple Computer Inc. spent $4.5 billion on research and development during the last decade and doesn't have much to show for it, according to Bill Gates, the billionaire founder and chairman of rival Microsoft Corp.
Gates also praised the early efforts of Apple's new chief executive officer, Gilbert Amelio, but said he had little interaction with Amelio's predecessor, Michael Spindler. Spindler, Gates said, ''didn't want to talk to me.''
The Microsoft executive, who was in San Jose on Friday to speak at a gathering of 1,000 Microsoft customers at the Fairmont Hotel, also spent an hour meeting with reporters and editors at the San Jose Mercury News.
Asked about Apple's recent financial troubles during the Mercury News session, Gates said the Cupertino company neglected to effectively manage its engineering teams -- preventing good ideas from getting out of the laboratory into the hands of customers.
''Now, if you look at their R&D budget over the last decade, you say, 'Whoa, that's a lot of man-years in there. What were they doing?' '' Gates said. ''You've got to shake your head -- by about a factor of 10, and just go, 'Wow.' ''
According to Apple's most recent annual report, the company spent $4.5 billion on research and development from 1986 to 1995. But the company is more than a year behind schedule in releasing its next generation operating system software for the Macintosh, code-named Copland, while Microsoft got out its much-delayed Windows 95 operating system last year.
Gates, 40, said Apple got distracted in the early 1990s by an alliance with International Business Machines Corp. to produce a new operating system through a jointly owned subsidiary called Taligent that was quietly folded earlier this year after failing to produce a viable product.
''Apple stands for certain things,'' he declared. ''Good user interface, usability, good multimedia handling, things like that, and there's so much more they could have done. They could be way, way further along than they are if they had had that focus. But instead, Taligent got a lot of focus, or the fact that IBM would be their friend got a lot of focus. I mean, what a waste of time that was.''
A spokeswoman at Apple headquarters said the company has no response to Gates' remarks.
Gates praised the turnaround efforts of Amelio, who took charge of the company in February.
''Apple is in a new era,'' he said. ''They're admitting some of the things they need to do differently. I think Gil (Amelio) is well matched to the situation. There's no guarantee of what's going to happen there, but I'm pretty impressed with his frankness and (the) new approach there.
''I'd actually had good communication with every Apple CEO, whether it was Mike Scott or Mike Markkula or John Sculley. Spindler didn't want to talk to me basically, and maybe he had good reasons for that. But when Gil started, he came up and spenta half day at Microsoft, and now he's asked me to speak at a management retreat that he's having for all their top people. So I'm going to come down and talk to them for a couple of hours.
''We're anxious to see Apple continue to push the industry in the great directions they really have in the past.''
Gates did not elaborate further about his relationship with Spindler, who could not be reached for comment.
Microsoft, based in the Seattle suburb of Redmond, Wash., is also intent on pushing the personal computer industry, from which it is extracting record-breaking profits through its Windows operating-system software and applications such as MicrosoftOffice.
The company reported a 45 percent increase in profits to $1.6 billion for the nine months ended March 31, as sales jumped 49 percent to $6.4 billion. Microsoft now has 18,700 employees and, as the company points out on its World Wide Web home page,81 percent are under age 40.
In a wide-ranging interview at the Mercury News, Gates also talked about the importance of the Internet, emerging new technology such as digital cameras and Microsoft's ventures in new media, including a joint venture cable television channel and Web news service with the NBC television network called MSNBC.
''The Internet is the big, big thing,'' Gates said. ''And even though there are sort of faddish mania, frenzy, gold-rush elements to this thing that go beyond any logic . . . at the core of it really is, to me, an advance in communications, and, therefore is important as the telephone was or the TV set was, and even better than those in some pretty fundamental ways.''
Digital cameras, he added, ''are getting to a point where it will be a mainstream scenario to take digital pictures, put them into an album and mail them around to your friends.''
On the frontier of new media, Gates concluded, ''We can take risks. We can put literally hundreds of very, very smart people on these businesses, and it's fun to see the creativity there and what they're doing. It's engineers, it's artists, it's writers, it's editors. It's quite a mix of talent. It's a fun, fun part of our business to work in, even though the (financial) numbers are large negative numbers.''
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Everyone should check out the San Jose Mercury News home page. It's a great site.
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