MacWorld Interviews Apple CEO John Sculley (1987)

They discuss the future of Apple, personal computing, and the Mac II

from the November 1987 issue of MacWorld

Verbatim

An interview with John Sculley, chairman and CEO of Apple Computer by Jerry Borrell

John Sculley became president and CEO of Apple Computer in April 1986, less than a year before the introduction of the Macintosh. Since he became chairman of the board in January 1986, Apple has posted the highest earnings in its history and now ranks in the Fortune 200 list of America's largest corporations. Before joining Apple, he was president and CEO of Pepsi-Cola Company; during his tenure the soft drink passed Coca-Cola and became the largest-selling consumer product in the nation's supermarkets. Though Sculley has concentrated on business management, his original major at Brown University was in architectural design, and his interest in design continues. In his new book, Odyssey: Pepsi to Apple - A Journey of Adventure, Ideas and the Future, he tells the story of his life in business. Here he comments on the changes Apple has undergone and considers the personal computer's future in the rest of the 1980s and into the next century.

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Q: How do you compare what you did at Pepsi—leading it to surpass rival Coca-Cola—to what you want to accomplish at Apple?

A: The strategy was somewhat similar. Pepsi was number two in the soft drink industry, but our goal was never to take first place by taking existing customers from Coke. Instead of a strategy that required the market leader to fail, we decided to take market share from all the other soft drink companies. We worked to create new markets and get more than our fair share of the growth with innovations in advertising, packaging, and merchandising. We knew Coke would follow suit, so we had to keep innovating. At Apple, we want a share of the business market, but not by taking over IBM's markets. We want to create new markets and get a large share of this growth. Apple has to leverage technical innovations and play a major role in shaping the direction of our industry. That’s been our strategy for the last two years.

Q: Why were you chosen to come to Apple?

A: I have always been intrigued by powerful ideas. Steve Jobs and I hit it off well. It seemed that between the two of us we had the combination of talents needed to make Apple great in the future. I had the marketing and business experience, and Steve had the technology and dreams. I was as excited as he was in terms of what Apple could be.

Q: Your book Odyssey deals with both dreams and business.

A: I wanted to write a different kind of business book. Much of it is a narrative of my adventure in going from Pepsi to Apple, and my relationship with Steve Jobs and others along the way It’s also a book about my mistakes and what I learned from them. In other parts of the book, I project myself and Apple into the 21st century. There may be a second Renaissance in the United States brought about by a combination of global competition, threats to America’s affluent middle class, and opportunities for individual innovation. I talk about information technology and how I believe it will affect schools and the economy by nurturing a new age of the individual. There are some warnings about our tendencies to focus on the short term, which could bring on crisis and important changes. But the book ends on an optimistic note, with the recognition that crisis can produce many constructive changes-including adoption of a longer-term perspective.

Q: Does Apple need to become a more diversified high-technology company, in the same sense as General Electric or Hughes?

A: Our long-term vision at Apple is still very “personal computing." We see the computer industry growing and thriving, and the emphasis of computing will shift steadily toward what Apple is already good at. The epicenter of technology shifted in the 1980s from the mainframe to networks. We’re organizing and leading a shift to the user. To move toward that goal, we are committing an amount of resources that is large by any standard. We are already spending hundreds of millions of dollars on research and development. That’s a large percentage of revenue.

But we never want to be in the position of renting our primary technologies from someone else. So we have to spend to keep inventing and revising proprietary technologies.

Q: One of the fears raised in the late 1970s was that many people would become information poor, disenfranchised by their lack of access to information. Is Apple concerned about that?

A: Apple has done a lot to make accessing information more affordable, but we have to reshape our outlook still more. We can draw distinctions between information and knowledge, which is the real objective. We must make knowledge itself more accessible by creating tools that deliver it efficiently and inexpensively.

I see two important shifts early in the 21st century. First, the role of the individual will be more important than in the 20th century; the information age is shifting the main role in society back to the individual. Knowledge is power, and making more knowledge available to individuals makes them more powerful. We have to allow computers to give power to individuals, so that they can become more creative and productive. The other important shift is in technology-everyone is trying to develop a better networking strategy. When that happens the epicenter of computing will shift. Until recently the economy of the United States was the global focus. That has shifted, and in the next century the focus will not be on any single nation, but will move toward a global economy, a fluid network of resources and information. The issue is how the US. will fit into this network.

Q: What is your vision of Apple’s 21st-century technology?

A: All the major technologies to build revolutionary machines for the 21st century exist today or will be in motion by the end of the 1980s. The performance of the technologies will improve dramatically. Microprocessors of the 21st century will be 100 times faster, yet cost the same as today’s. They will process the software loaded with artificial intelligence, sophisticated 3-D image processing, high-resolution animation, speech recognition, and voice synthesis. Full-motion video-with image quality far better than current television sets-will be what computer users routinely expect.

The problem is the growth of information; the amount of information doubles every two years. So the ultimate aim of computers will not be to create more information. We need the ability to navigate in real time across vast expanses of information. So it is especially important that we develop a new perspective. Information is an interim step to the ultimate goal of knowledge. We have an opportunity in the early 21st century to create breakthrough products as important to people then as movable type was to people in the beginning of the Renaissance.

After Gutenberg developed movable type, it took more than a century of development before it had an impact on society. In 1360, 1 out of every 100 Europeans could read, but by 1500, 80 out of every 100 could read. Gutenberg’s invention democratized knowledge in the process.

Apple’s near-term challenge is to create an ancestor of the tool that might be vital to us in the next century.

Q: What is your vision of the 21st-century personal computer?

A: I developed a term, Knowledge Navigator, to describe it. While today’s computers take users to the doorsteps of libraries and institutions, the Knowledge Navigator will drive us through them. By the 21st century, we will have the installed base to make the computer a mass personalized knowledge-based system. It will make incredible quantities of information understandable - and personalized. It will customize information automatically, because it will have the ability to “learn” about a user’s habits and preferences. It will have the independent ability to search databases and perform content analysis on information. It will do a lot to transform information into personally tailored knowledge, thus improving the payback of companies investments in computers.

The physical appearance of the 21st-century personal computer would be more like a pilot’s cockpit than today’s machines. A large flat display screen might have navigational joysticks at both sides, allowing you to steer through menus, windows, and stacks. It will instantly accept or provide data in any mode you like: text, graphics, video, speech.

The key benefit of the Knowledge Navigator is that it will encourage learning and creativity. By the 21st century, intelligent information networks will make a world of knowledge much more accessible, (distributed databases will be widely installed. Brick-and-mortar libraries will give way to electronic ones. We will have super-highways of knowledge, and they will have as much impact on the American economy as the railroads did in the 18OOs. The Knowledge Navigator will be the tool of choice for helping us understand better. It will be capable of helping us explore, connect concepts, and compare subjects.

Obviously, it will make learning experiences much more interesting for students. Not only that, but teachers will boost their own self-esteem because they will have more power to shape education. Students wall be drawn into the educational experience, once it moves away from the mechanical, memorization-oriented path so many schools are on.

In business, the Knowledge Navigator will free the participants in the 21st century’s dynamic global economy to spend a greater portion of time experimenting, simulating, creating, and innovating. In short, workers will be able to create more options for adding value-a crucial concern for the industrialized economies of the coming era.

Q: Will you be the one to build the Knowledge Navigator at Apple?

A: My sense is that we are doing the right things in order to be able to build the 21st-century personal computer. I'm satisfied with Apple’s direction, which is mostly what a CEO is concerned with. When I came here we were looking 2 to 3 years ahead; now we’re looking 15 years ahead. We bring together people who have special talents-they don’t have to be in computer science. But we want to attract the best people, like Jean-Louis Gassee, Larry Tesler, and others who know computers and have a commitment to this vision. That is how to build an organization that will make the Knowledge Navigator the legitimate descendent of the Macintosh.

Q: Apple’s current reorganization looks more extensive than the infamous one of June 1985.

A: Yes. We made as many changes in the first six months of this year as we made in all of 1985. The difference is that in 1985 we were in a crisis, and now we are changing to take advantage of our opportunities. It is part of our shift at Apple in the last two years, from selling primarily to consumers and educators to new areas of focus, primarily increasing business sales.

Q: Many developers originally questioned Apple’s intent to move Claris out onto its own. Are you actually accelerating the pace of independence for Claris?

A: We intended to do that from the start. It is a sort of prototype for things we hope to do. As opportunities appear, we will spin out businesses to fill gaps in the market that are strategically important. If Apple is to be on the leading edge, things in it and its infrastructure must change too. That’s why we picked our executive vice-president and some of our best middle management to direct the new company. They have hired people like Yogan Dalai, a codeveloper of the Ethernet protocols.

Q: Why have you compared the computer industry today to the auto industry in its early years?

A: It's a good analogy. If you think back to the auto industry’s early years, it was supported by machine enthusiasts and made a slow transition to a mass personal transportation industry. That occurred only after technology was made invisible to the user-like the automatic transmission. And gradually we created infrastructure-service stations, highway systems, services.

We are still at the machine-enthusiast stage in the personal computer industry but in the next century we are sure there will be a transition to mass personalized knowledge-based systems. And that transition will happen only if the technology is invisible enough that the “drivers” have to think only about where they're going.

Q: What do you enjoy doing when you’re not working at Apple?

A: I draw and design. Since I was young I've had an interest in inventions. One of my first inventions-I talk about it in my book-was a color television cathode-ray tube with a single electron gun. That was in 1954. I had a patent application, but Dr. Ernest Lawrence, the inventor of the cyclotron, had a basic patent that covered much of the technology. So my application was denied. He filed his about two weeks before mine. He sold it to ABC-Paramount, which in turn sold it to Sony Now that technology is the basis of their current line of Trinitron products. I was also a ham radio operator and built my own transmitters and other equipment.

Q: Were you a boy wonder?

A: Well, a dreamer. I love learning. It’s almost an accident that I ended up in business and marketing. At college I studied architecture and industrial design. If there had been a Silicon Valley when I was graduating from school. I’d have been here fast. That’s another reason things with Apple worked out.

Q: Desktop publishing has been lauded for some time, but companies attempting to use the current products as heavy production tools are finding that they’re not so great. What is a realistic view of desktop publishing?

A: The reports we get for DTP tell us that there are no limits for the market. The Mac II ranks as an industrial-strength product for professional electronic composing, while the SE and the Plus can serve as personal text- and graphics-editing stations.

We are now seeing the second generation of desktop publishing software-there are new releases from Interleaf, Aldus, Letraset, and, in the area of desktop presentations, from Forethought. So the tools are approaching the quality of dedicated electronic publishing systems.

Q: One System software area that needs some advancement is the graphical user interface—especially in light of multitasking system software like MultiFinder.

A: In the coming year, people will see how the graphics environment is moving. We made a conscious decision to direct the early shipments of Macintosh IIs to developers so they can take advantage of its performance and be able to release a number of exciting new products this year. At the same time, developers will announce improvements to solutions for the Macintosh Plus, SE, and II, so people will see how we’re building on the technology.

Q: What are the implications of HyperCard for user programmability?

A: HyperCard is an extraordinary and innovative new Macintosh technology. It’s really an erector set of authoring tools to allow both experienced and beginning programmers to organize information in highly intuitive and unstructured ways. It's part of the dream to make personal computing very, very personal. The product could have an impact more significant than Microsoft BASIC did in the 1970s for the Apple II. Bill Atkinson worked on it for two years. His work resulted in a product that will promote a new way of organizing thought.

We hope it becomes a root technology that shows up in a very advanced form in our personal computers of the next century. It’s already on a track that will make it a great development environment for CD ROM.

Q: How do MacApp and HyperCard compare?

A: When the Mac was introduced there was no easy way to program the machine. By making the Macintosh easy for users we had to make it harder for developers. It took a while before programming tools were available. You had to develop on a VAX or a Lisa to create Mac programs, a situation similar to Microsoft’s OS/2 today. In the case of MacApp we took object-oriented programming, like Alan Kay’s SmallTalk, and tried to make the process of programming better.

MacApp is an extension of application generators that employ the sort of concepts envisioned in SmallTalk for programming without code. Only icon representations on the screen are linked together. This is extremely attractive in that it decreases the time it takes to program the Mac. It gives access to the Toolbox, which is extremely rich, with over 400 calls available to the developer.

HyperTalk is the language for HyperCard, which is a new metaphor for programming the Mac. The metaphor is stacks of cards, and each card can contain text, graphics, sound, or commands. You can link a card to any other card. This opens up a new group of people to ideas that have been discussed since Ted Nelson conceived Hypermedia in the 1960s.

It means that you can develop applcations that let you use information in a natural way while taking advantage of the Mac's power, as opposed to using information in the way that the computer wants you to. All major breakthroughs in personal computing have shared this: they let you accomplish in a more efficient manner something you were already doing. My sense is that HyperCard will stimulate tremendous software development.

Q: What about Apple’s fax modem and other new products?

A: Adding those products is a clear indication that we are taking desktop publishing technology to higher levels. The long-term direction is to do everything from text design to the entire design process.

The fax modem we’ve announced is an important component of our plan. It turns a Macintosh into a facsimile station, which moves documents around quickly. It’s not always practical to put documents in a binder and send them by Federal Express; you need to transmit them over long-distance networks as easily as putting text in Telex or sending it over E-mail.

When we combine communications and desktop publishing so that their capabilities are even, say around 1990, there is reason to expect that we will add the ability to automatically update files in the background, communicating to other computers where the data is stored.

Q: Several products are missing in action-a color monitor, UNIX, and others. What's going on?

A: We introduced so many products this year that it's amazing we got as many out on time as we did. The good news is that the new Mac is so well received and supported by third parties. So if we are short of our own color monitors, there are still third-party products available.

UNIX is delayed only by a few months. UNIX is so important that we need a version that’s representative of our style of products. No third party has ever before created a simple version of UNIX; maybe that's why there are only 250,000 copies of it running in the world today. We think the real excitement is in bringing good technologies within reach of more people.

Q: For a long time Apple discouraged talk in the press about the Macintosh in the consumer market, yet more than half of our readers have a iMac at home. Has this policy changed?

A: We have made a major effort to ensure that people don’t have a misconception about the Mac. If it is viewed as a toy, that hurts the availability of powerful applications. We look at the home as a place where the Mac is used, not at the Mac as a home computer.

Q: How have large companies taken to the Mac?

A: Well, we recently completed a study of how our computers are used in business. We found that on the average DOS machines are used 30 minutes per day, while the average Mac is used 2 1/2 hours per day. The average DOS user runs two applications while the Mac user runs six.

We also found that others see the importance of our consistent u.ser interface, where all functions such as Cut and Paste, Copy, Print, and so on are the same in each application. Companies understand that training is a large part of total computer cost, and our consistency tends to reduce training time. We got into the business market with the Trojan horse of desktop publishing; once inside, we're being accepted for other things because users prefer the Mac.

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