Why did Microsoft saved Apple from bankruptcy? | Tecvalue

The upcoming entrepreneurs who look up to big companies like Apple, Microsoft, Amazon, and other companies know little of their fallouts. They hence cannot understand the complexities involved in it. Every start-up in their initial days goes through a tough time financially and so did Apple, this article unfolds one of the most interesting topics in the tech world- How and why did Microsoft saved Apple from falling out.

A case in point: when we think of Apple, we paint an image of the jaw-dropping headquarters and the trillion-dollar Market valuation attached to it. But, little do we know about Apple’s hard times and the fact that it was on the verge of bankruptcy and how Microsoft saved Apple.

So, how did Apple managed to make a paradigm shift from bankruptcy to a trillion-dollar company? The answer lies in the famous rivalry between Apple and Microsoft.

1982: Macintosh

Steve Jobs’ baby, the Macintosh, had some features like MacPaint developed by Microsoft. Jobs was a revolutionary in the tech in that period, and Gates was still in the shadows, but the limelight was waiting to shine on him. Microsoft signed a deal with Apple to develop graphical Versions of a spreadsheet called Excel, a word processing application, and a new BASIC.

The Deal: Jobs’ obsession with Excel made his deal with Gates about Microsoft. The deal was to make Microsoft Excel exclusively for two years for Apple and not to replicate the same for IBM PC’s and in return, Apple would license Microsoft’s BASIC. The deal turned out to be the reason for the feud between the two tech giants.

Graphical User Interface (GUI)

While working with Apple, Gates and his team had developed a curiosity about the Macintosh operating system. One of the engineers working at Apple suspected that Microsoft might try to create a carbon copy of the User Interface, which Apple was developing were right.

Macintosh launched in the year, 1983 but it was delayed, and as per the agreement, the two years reserved for Apple’s application was about to end.

Considering this as a loophole, Microsoft started to develop their own GUI system for the IBM version PCs that had identical hardware & software features to that of Macintosh had.

The reaction of Jobs: Steve asked one of his crew members to summon Bill Gates, and a fiery speech was lashed on to Bill Gates. In the end, Bill ended the confrontation by saying that Microsoft was not coping Mac and was instead following the model of Xerox Parc as was observed by Apple.

The fall of Apple

Initially, Microsoft failed in gaining a market share. With perseverance on their core values, they developed Windows 95, which dominated the market as Macintosh was not bringing anything new to its features. As Jobs would have reiterated, Apple was no longer productive.

The Savior

The two giant heads were in a legal battle for patent and copyrights until John Sculley surrendered the fight and licensed the Graphical User Interface for Windows 1.0 and, in return making Excel reserved for Apple for two years. However, Microsoft was sued by Apple in the year 1985 with the charges that their deal didn’t cover Windows 2.0

By the fall of 1997, Apple had lost the battle except for few litigations. The battle perpetuated.

With Steve back at Apple, Jobs made the first call to Gates confronting two companies’ positions about their issues. Jobs was confident enough to suggest that Apple would end up winning a billion-dollar patent suit in the future. Moreover, he needed help and so took the opportunity to resolve Microsoft’s issues once and for all.

Before Jobs, Bill Gates has been trying to strike a deal with Amelio, the then CEO, but the agreement’s content was immensely complicated. With Jobs back on the leadership front, he decided to make the deal simple with Microsoft’s commitment to work for the Mac(iMac) and an investment of $150 million with nonvoting shares.

The Renaissance

At Apple’s Macworld auditorium, Jobs makes an announcement, and the Apple crew members are astonished seeing Bill announcing the screen is becoming the ironical Big brother as their Savior.

The Microsoft investment saved Apple as the iMac became a booming product bringing Apple back into the business of creating the right products as a result of the ‘Think Different’ campaign. With it, the Renaissance of Apple was apparent.

Ajit Kumar Yadav

Ajit Kumar Yadav is an analyst interpreting different technologies and keeping track of their events. He understands the business part of technology and construes it from social, political, economic, and cultural lenses.

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