The billionaire rivalry between Apple and Microsoft

Business Insider

Bill Gates and Steve Jobs partnered in the early years of their companies before their relationship took a turn. Here’s what happened between the two tech billionaires, and how it has impacted Apple and Microsoft until today.

Transcript

00:00Although Microsoft and Apple are competitors when it comes to sales and dominating the market,

00:05Jobs and Gates have a much more complicated relationship than that.

00:08They've worked together in the past.

00:10They've traded some harsh words for each other in the media.

00:13The essence of Gates' opinion of Jobs is kind of like,

00:16you have great ideas, you have great taste,

00:18and those are things that Gates said about Jobs a lot, very often.

00:21But he did not believe that Jobs had the technical chops to lead a company

00:26into the new frontier of technology.

00:29I'm Jordan Hart. I'm a trending tech reporter here at Business Insider,

00:32and today we're going to be spilling the tea about one of the biggest rivalries

00:35in the tech industry between Bill Gates and Steve Jobs.

00:41Apple and Microsoft were both founded in the 1970s.

00:44Back then, personal computing was just emerging.

00:46People were trying new stuff, innovating things.

00:49Already at this computerized secretarial service,

00:52one secretary can handle what six did before.

00:55Warehouses don't need warehousemen. It's all done by computer.

00:58Microsoft and Apple were pretty early collaborators.

01:01Microsoft made the software for Apple's Apple II PC,

01:04but their relationship wasn't perfect by any means.

01:07One indicator that it may not go so well is a 1980s trip

01:10that Jobs took to convince Microsoft to create software for Macintosh.

01:14Jobs' sale pitch did not go over well with Gates,

01:17who kind of saw him as more as a salesman than like a real tech leader.

01:21They butted heads and they disagreed on the way their company should run

01:24and the way the tech industry should move forward.

01:27Our goal, and we think what serves the customer best,

01:30is to constantly be working on making things better.

01:32We're working on the next iPhone. We're working on the one after that.

01:35We're thinking about the one after that.

01:37As a lot of tech relationships between companies and CEOs work,

01:42I mean, you kind of need that rivalry and that competitor

01:47who's kind of neck and neck with you to innovate and create the next thing.

01:51We love the competition.

01:53People see that someone else has done a good job

01:56and we can surprise them by showing that we can match and go beyond.

02:00For the first few years of working on Macintosh,

02:03Apple and Microsoft were very involved.

02:05Gates even said that he had more men working on the Macintosh than Apple did.

02:09So there was a partnership there.

02:11There was a level of working together, creative ideas flowing,

02:15and the pair had a lot of respect for each other.

02:18The release of Windows in 1985 marked the end of the good vibes

02:22between Steve Jobs and Bill Gates.

02:24Jobs felt like Gates and co. were ripping off Apple's idea

02:27of the graphical user interface.

02:29Meanwhile, Gates felt like they both took the idea from Xerox,

02:32who they both admired as a company.

02:34Jobs felt like Gates had no shame in just completely copying Gates' idea.

02:38And Gates felt like Apple didn't own one idea.

02:42If you ask me, Microsoft and Bill Gates did not rip off Steve Jobs and Apple.

02:46I mean, at this time, there was a lot of innovation,

02:48a lot of ideas floating around.

02:50Everyone was kind of trying to figure out how they could come up

02:53with the next big thing that consumers would love.

02:55So Microsoft was just doing what any other tech company would do,

02:59and Apple doesn't really own the idea of graphical user interfaces.

03:03At this point, the rivalry was full-blown.

03:05Microsoft and Apple were both in the personal computing space.

03:08Gates had a lot to say about Jobs' place in the tech industry.

03:11He praised his charisma, his taste, and his ability to command an audience,

03:15but ultimately felt like Jobs lacked the technical ability

03:18that it took for a tech leader.

03:20Jobs felt like Gates was a little bit too focused on business, too technical.

03:24If you ask me, they both had a winning formula.

03:26They just had different ingredients.

03:29Back in the 1990s, Microsoft was king of personal computing,

03:32thanks to its unique Windows interface, which was revolutionary.

03:36They were also the most valuable company in the world.

03:38And while Microsoft was at the top of its game in the 90s,

03:41Apple needed a $150 million investment from Microsoft to help it stay afloat.

03:45Apple was also dealing with a lot of turmoil at the executive level during that time.

03:49Steve Jobs had left the company and returned in the 1990s,

03:53staged a coup to become the CEO again.

03:55So there was a lot of moving pieces there,

03:57and that investment from Microsoft saved the company,

04:00or at least helped it not go under.

04:02Microsoft's investment in Apple isn't necessarily an indicator

04:06that Jobs and Gates were on great terms.

04:08There's a lot of competitors out there,

04:10but we think we have a much, much better product.

04:12So we'll see if people agree with us.

04:14In the early 2000s, Gates made it clear that he felt that the closed-off philosophy

04:18and ecosystem of Apple products would make it hard for people to commit to them

04:22without Steve Jobs being there to be the salesman that Gates knew he was.

04:26Gates isn't 100% wrong here.

04:28Apple is one of the most valuable companies in the world right now,

04:31but its last few earnings reports indicate that things are starting to slip there,

04:35and they need some innovation if they want to kick it up a notch

04:38and be that dominant force that they were when the iPhone first came out.

04:41Steve Jobs unfortunately passed away from pancreatic cancer in 2011,

04:46but four years before that, Jobs and Gates joined each other on stage at a conference,

04:50and the tone was a lot more appreciative and admirable than they'd been in years,

04:54and it seemed like the pair had really put the past behind them

04:57and were able to compliment each other for their hard work

05:00and where their careers ended up taking them.

05:02Gates and Jobs might have let bygones be bygones,

05:04but their companies are still very much in competition with each other.

05:07They're both worth over $3 trillion,

05:09and they're racing for their $4 trillion valuation.

05:12It's not just each other vying for that top spot,

05:14but the startup that started yesterday that's gotten, you know,

05:18over a million views on Kickstarter.

05:20So there's definitely a lot more tension between Apple and Microsoft

05:24with the companies that have yet to even come to fruition yet

05:28who want that iPhone moment or that PC moment

05:31to catapult them into the stratosphere like it did for Microsoft and Apple.

05:36Maybe there's another Steve Jobs and Bill Gates rivalry brewing.

05:41Oh, the brewing!

05:42Ah, tea!

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