Tuesday, August 4, 2009

Achilles in Cupertino: Eric Schmidt's tenure on Apple's Board of Directors


When Apple appointed Eric Schmidt to its board in 2006, the news met with some skepticism, but also praise. Mostly, it sparked fervent speculation.

At the time, the move brought many positives. Schmidt was a good guy to have on your side simply because Google is a good company to have on your side. Apple and Google did not compete directly in any core business. Some relatively minor operations were actually complementary. Apple sells high-end computers, so the traffic sent to Google via contextual menu and Safari "search field" placement was not just market share, but a long row of luxury cars. The internet marketplace was much more competitive then, too, and Google wanted share badly.

More arcane or speculative positives were divined at the time, too. Perhaps Apple would leave .Mac and other online efforts behind, and link the Mac intimately with Google's world-leading back end of servers? Maybe the companies were feeling out a merger?

Yet, Eric Schmidt was at the helm of a rising giant, sprawling disruptively into business after business. The optimism about today's Google is enormous, but tempered compared to the messianic speculation about space elevators, Google Linux, and so on of that era. Google was entangling itself with so many different entities and sectors that having its CEO on any Board of Directors did feel somehow imprudent.

The appointment was problematic at a more basic level as well. Google is a company trying to change the paradigm of personal computing in a way that would alter, and possibly cripple, Apple. It is old hat now, and it was even then, but the obvious result of the rise of browser-delivered "services" that mimic "classically delivered" executables means almost no one needs a specific operating system and powerful computer to do what they want anymore. Apple's core business is selling the best way of these two last items, so, the conflict is obvious.

(As an aside, Google's innocuous corporate mission to "organize the world's information and make it universally accessible and useful" is a clever sleight, as the company considers anything information, like the way you use your mouse, or the fact that you read this.)

Concerns and plaudits aside, the job of Apple Director is amorphous enough to accommodate Al Gore, Bill Campbell, and Andrea Jung, so no one really makes perfect sense. (Indeed, Campbell's Intuit corporation has remarkably poor, oft-delayed Mac offerings.) The legal system and federal government make collusive additions to corporate boards a thorny road to travel, but Schmidt circa 2006 did not cross any clear boundary. A shareholder challenge of the addition of a director to a board is both difficult and esoteric, and, the controversy simply was not there.

By now, though, the conflicts are so obvious Gizmodo is right to rant about how long the Schmidt resignation took. I will not belabor the many overlapping agendas of both companies, but ask instead, why, really, did Schmidt stay as long as he did. Media-savvy and lawyer-stuffed, the company allowed the issue to raise antitrust issues that entangle a longtime director, Arthur Levinson. Apple is renown for secrecy, but it opened the books, unfolded the roadmap, and chatted about it with the CEO of a competitor for this long? It simply does not make sense.

I believe Apple and Schmidt are both blinded by rage, a seething anger at a shared enemy that has dealt both many blows over two decades: Microsoft. The Apple/Microsoft battles are well known even outside of technology and business. Steve Jobs was forced from Apple and spent time essentially in exile. The IBM PC/Wintel product was a horrid evolution of Jobs' original, and the world mired itself in it happily as NeXT bombed and Apple deteriorated.

Less well-known is that Schmidt's shares Apple and Jobs' arch-nemesis. Before Google, Schmidt led Novell, starting in 1997. While he did well for Novell, Microsoft was years into a massive attack on its main business that proved unstoppable. Novell's Netware was the dominant enterprise computing solution, and it ran on non-Wintel hardware. Microsoft leveraged Office and Windows to push adoption of its solution, Windows NT, and it was too late before Schmidt even started.

Before that slog, Schmidt already had good reason to hate Microsoft. Not only was he a long-time employee of rival Sun Microsystems, he was an early champion of Java, its main proponent in the company, setting corporate strategy around it as Chief Technology Officer. Microsoft was not yet a convicted monopolist, and used some of its most aggressive tactics in successfully thwarting Java. Netscape suffered less, really. If Sun had delivered a product twice as good, it would not have mattered, the field of play was not uneven, it was bought by the town, locked up, and guarded. Schmidt's baby was, like Quicktime, "knifed"

Just as Achilles went berserk with rage (metis) in The Iliad, or the soldiers of Vietnam became unhinged and went on rampages, reason was completely trumped by anger. While soldiers or heroes may lose control over minutes, seconds, or maybe hours, Schmidt, Apple and Jobs were gripped for months, perhaps years. The re-intrusion of reason, I predict, had nothing to do with any of those parties. The only participant who suffered and could see clearly, Google, probably forced the arrangement to end.

As an ending note, I am happy Schmidt is gone. His decades-long desire to put the application in the browser, and make the network the computer, or make a "web OS", is the resume of an enemy of Apple, too.

2 comments:

jellinek said...

Excellent, as always, and I agree. And you know I like the references...

Russet Shadows said...

Only in the "minds" of John Kerry and the other proven liars of the Winter Soldier tribunals did 'Nam vets ever go on rampages. After the war, of course, all you needed was a handful of arguable cases to construct another anti-military Hollywood myth where neither facts or reason matter much.