A Grand Rapprochement: Microsoft and Next Inc. in Talks for Software Deal

Strategic Insights -

After years of competition between two of the tech industry's most influential figures, Apple co-founder Steven P. Jobs and Microsoft chairman Bill Gates, a deal between Microsoft and Next Inc., Jobs' software venture, is reportedly close to being finalized. The agreement would allow software authors to use Next's development tools to write programs that would run on Microsoft's Windows 95 and Windows NT operating systems, with Microsoft providing financing for Next's software development.

The negotiations between the two companies are seen as a significant development, as it would give Next a much-needed boost and allow Jobs to regain his influence in the industry. Despite gaining a loyal following among programmers and on college campuses, Next has struggled to attract a widespread business following for its computer. A deal with Microsoft would provide Next with the financial backing it needs to compete with other software companies.

Key Takeaways:

  • The negotiations between Microsoft and Next Inc. are reportedly close to being finalized, with a deal that would allow software authors to use Next's development tools on Microsoft's Windows operating systems.
  • The agreement would be worth several million dollars and is seen as a significant development for Next, which has struggled to attract a widespread business following for its computer.
  • A deal with Microsoft would give Jobs renewed influence in the industry, after he left Apple in 1985 and founded Next Inc. in 1986.
  • Next's software approach has won praise from software programmers who use its sophisticated programming tools to build applications quickly.
  • The deal would also give Microsoft a clear advantage over IBM and Apple in the race to create the next generation of personal computer software.
  • Mr. Gates and Mr. Jobs have had a long business relationship, with Gates saving Jobs' fledgling company from bankruptcy in 1977 with a $10,500 payment for Microsoft Basic.
  • Next has had little success in trying to become a force in the computer industry, but its object-oriented software approach has won praise from software programmers.

Statistics:

  • Next Inc. is expected to have revenues of $45 million to $50 million this year.
  • The deal between Microsoft and Next would be worth several million dollars.
  • Microsoft's Basic programming language was built into the Apple II, which became the best-selling personal computer in the late 1970s and early 1980s.
  • Mr. Gates' software has gone on to dominate the market for the Macintosh computer, which now commands about 10 to 12 percent of the personal computer market.
  • Taligent, a joint I.B.M.-Apple venture, is expected to make its development system available commercially next year.
  • Microsoft's Cairo is now scheduled for release no earlier than 1996.

Sources:

  • "Gates," a biography of the software entrepreneur by Stephen Manes and Paul Andrews.
  • "Release 1.0," a computer industry newsletter published by Esther Dyson.
  • People familiar with the discussions between Microsoft and Next Inc.
  • A spokeswoman for Microsoft.
  • Mr. Jobs, reached by telephone this weekend.
  • Next executives.
  • Reuters.