Is it a thankless job to be a CEO?

On the firing line - Amelio's ungrateful departure

Apple History - history

Chapter 13

2nd edition from December 2009

Jean-Louis Gassée was certain that he could sell Be to Apple. This conviction ultimately became his undoing. He showed no willingness to discuss the issue of the purchase price. Amelio then announced on December 20th that he intended to buy NeXT for $ 427 million and mockingly said: "We have decided on Plan A instead of Plan Be."

With the purchase of NeXT, Apple founder Steve Jobs also came back to Cupertino. For many observers, the return of the prodigal son was more important than the technological advantage Apple hoped to gain from the takeover. Gilbert Amelio was given credit for bringing Jobs back on board. The impression quickly spread that Steve Jobs had ambitions for the post of CEO, even though Jobs denied this several times. Jobs was officially a consultant, but his area of ​​influence over the media and users was greater than ever.
On January 7, 1997, Amelio delivered the much anticipated Macworld Expo keynote in the San Francisco Marriott Ballroom. His lengthy speech seemed incoherent. Amelio could not keep its promise to present the new operating system strategy. He only broached the subject very broadly. The audience was happy when Amelio finally cleared the stage and Steve Jobs stepped in front of the audience, who greeted him with cheers and applause. Jobs briefly explained Apple's plans for the Mac OS. Following the example of Microsoft, Apple worked separately on a system for home users and one for companies. The latter was given the code name Rhapsody, was based on OpenStep and should be delivered in a first version at the end of 1998. At the same time, Apple wanted to advance the development of the classic system and use it as an operating system for consumers. With System 7.6 and especially with Mac OS 8, numerous functions from the Copland project found their way into the software in 1997.

A month after the Macworld Expo, Lawrence Ellison spoke again in public about a buyout from Apple. Amelio suspected an intrigue in which Jobs could also have a finger in the game and warned against believing the speculations. But Amelio couldn't do much more than wait. Ellison's Oracle shares alone were worth more than five billion dollars, so a takeover of Apple would have been possible without any problems. At the end of March, Prince Alwaleed bin Talal of Saudi Arabia bought six million Apple shares and was interested in Ellison's plans. However, he withdrew his offer in April. Still, Amelio was under pressure. The financial situation came to a head, Apple's sales remained consistently low. According to Amelio's plans, Apple had to recapture the lost market share through superior products, but the development of such products was time-consuming and costly. In the spring, Apple announced several changes in the management floor. Ellen Hancock had to vacate her chair, she was replaced by Avadis Tevanian. Jobs ensured that numerous key positions were filled by former NeXT managers, which gave him more freedom of action.

On July 6th came what had to come. Apple's board of directors relieved Gil Amelio of his position as CEO, even if he defended his measures to the bitter end. Nevertheless, the farewell turned out to be dignified. Amelio had initiated the turnaround, increased productivity, streamlined the workforce and left Apple in much better shape than it found when he took office. He had achieved his goal of building the best personal computer with Apple. In the summer of 1997, the Power Macs with the PowerPC-604e chips already reached clock rates of 350 megahertz, the fastest PC at that time achieved a modest 233 megahertz. Apple had reason to hope again, there was a spirit of optimism, we finally saw prospects for the future again.

During Amelio's 500 days in Cupertino, Apple lost $ 1.6 billion. After Gil Amelio left, the board offered the vacant CEO position to Steve Jobs, but he declined. Jobs promised to help Apple find a new boss, but while he was on board, the search was unsuccessful. Gil Amelio made no secret of his belief that Jobs had orchestrated his dismissal. While Apple was officially still looking for a CEO, Jobs took the helm on an interim basis.

Jobs saw a need for action everywhere. Without further ado, he began to cut off all the old ropes. Every business point had to be reassessed. First it was the clone manufacturers' turn. In June, Amelio had revised the license agreements for Mac OS 8 with Power Computing. Power Computing was already planning to go public, but the growing power of Jobs put everything into question again. At WWDC, he referred to the clone providers as parasites. Mac OS 8 was released in July, but Jobs refused to turn the system over to Power Computing.

The summer Macworld in Boston was just around the corner. Kocher wanted to force Jobs in front of the public to take a stand on his breach of contract. But Steve Jobs didn't care, he shocked the audience with completely different news. Apple's board of directors was reorganized and filled with new managers, one of whom was Lawrance Ellison. On the other hand, Mike Markkula said goodbye, after having worked for Apple for over 20 years and held both the position of CEO and President. At the same time, Jobs announced the alliance with Microsoft. When the picture of Bill Gates appeared on the big screen, the assembled Mac users vented their displeasure with Microsoft; Bill Gates was considered the epitome of evil. Jobs didn't let that bother him. From then on, Apple installed Internet Explorer as the standard browser on Macs; in return, Microsoft undertook to offer the Office package consisting of Word, Excel and PowerPoint for the Mac for another five years. Steve Jobs had recognized the key role of this program package, the pact only brought Apple benefits.

Jobs received a lot of praise and applause for his speech. But there was still one question to be clarified. What should happen to the clone makers? In the week after Macworld, Apple announced that it would no longer certify PPCP systems. This allowed the clone manufacturers to starve, since Mac OS 8 was only allowed to be delivered on certified systems. When cornered, Kocher wanted to sue Apple, after all he had the contract for Mac OS 8 in his pocket. But Apple agreed to take over power computing. Thereupon Kocher dropped his already hopeless complaint. Even though UMAX continued to deliver Mac clones until spring 1998, the era of clones came to an abrupt end nine months earlier.

Jobs ’disrespectful treatment of the clone manufacturers caused a sensation, outrage and melancholy in many places, but they were not the most prominent victim of the Apple founder's reforms. Because Steve Jobs ’plans for the Newton provided much more discussion topic. After the Newton cost the head of its greatest advocate, John Sculley, in 1993, the department grew into a significant line of business over the years. With the NewtonOS 2 and a new generation of MessagePads, the department made positive headlines. The MessagePad 2000, which was powered by a 166 megahertz fast StrongARM processor and had additional interfaces, stood out. At the same time, Apple introduced the eMate 300 in 1996, a Newtonian model with a keyboard as an input device. This made it the Newton division for the first time in the profit zone. In 1997, Amelio and Anderson were feverishly looking for a buyer for the Newton so they could use it to flush money into Apple's frighteningly empty coffers. Since no one was willing to pay a significant price for Newton technology, Amelio decided in May to spin off the division as an independent subsidiary called Newton Inc. from Apple. In August, the newly founded company had already appointed its board members and drawn up a business plan. But then something unexpected happened. Steve Jobs disliked Amelio's idea of ​​outsourcing the Newton division and promptly reversed the move. Jobs saw that there was a lot of technological knowledge in the Newton department, and he wanted to keep that at Apple. A short time later, on October 20th, the Newton received a final update. Apple introduced the MessagePad 2100, which had additional networking capabilities and increased storage capacity. At Jobs' orders, the department stopped all work at the end of 1997, and the Newton was history. Jobs justified his decision with the fact that Apple had to concentrate fully on the Macintosh in order to be able to operate profitably again.