Triumph of the Nerds Part 1 summary

In the early 80's nobody really knew what a computer was. Many people probably never saw a computer in
person. The only real computers were called mainframe computers and they took up whole rooms in size.
They were used by large companies to do basic things like billing. They used a special code called binary that
only worked with 1's and 0's. All of the data had to be input into them by long stretches of tape or by flipping
switches on the front. It took people to come up with a computer language for the computer to take off. The
first language was called Cobal and it was followed by FORTRAN and Basic.

The computer's next big problem was the size of the computer. Nobody would want anything that took up the
size of a large room. It took a company called Intel to develop a microprocessor. Intel was founded by Gordon
Moore and they shrunk down the size of the processor by placing millions of transistors on a single chip. Now
computers instead of taking up an entire room could fit on a large desk. After this discovery people started to
work on how to make a computer that normal people could buy. Ed Roberts was that man. He had a small
computer calculator company called MITS in Albuquerque, New Mexico. He came up with the first P.C. and
called it the Altair. It was designed as a kit that the buyer had to put together. If you did not do it correctly it
did not work. It was a large box that had a front panel on it that had a number of switches on it to input the
data. It had no external display and had no other inputs or outputs for anything. If you flipped the right
switches in the correct order a light would blink on the display telling you did the process correctly. It needed
a basic interpreter to do anything useful on it not requiring the switches.

Enter Bill Gates and Paul Allen. They worked on an interpreter for the Altair. After a successful
demonstration to Ed Roberts Gates left Harvard and started a company with Allen called Microsoft. After the
basic interpreter was introduced by them people were able to attach terminals to the Altair and start
programing programs for it. Many of the programs were simple games or other non-useful things. Nobody
really had anything useful for the computer to do other than look nice. It took another man to make that
happen.

After the mild success of the Altair other people wanted to make computers as well. Two such men were
Steve Wozniak and Steve Jobs. They started a computer company out of a garage called Apple and set about
to make a better computer. The first one was called the Apple 1 and had no case or terminal. Jobs wanted the
computer to be easier for people to buy and use so Wozniak started to work on making it smaller and cheaper.
The Apple 2 was introduced two years later at the West Coast Computer Faire run by Jim Warren. They were
able to get money from a venture capitalist and made 1,000 Apple 2's. They became a hit and soon became the
bells of the ball. They soon had all the money they could every want and had everyone touting their work.

After the release of the Apple 2 many more people started to use a P.C. The main problem with it was it still
had no real purpose or application to make you buy one. It took Dan Brinklin a professor at Harvard to come
up with it. He and a programmer named Bob Frankston came up with a spread sheet program called VisiCalc.
It took the work one person could work a whole day on into something so simple a computer could do it in
seconds. It changed how businesses ran companies and helped fuel the economic boom of the 80's. The Apple
2 became so popular in allowed Apple to go public in 1980 and made Steve Jobs and Steve Wozniak instant
millionaires. The P.C. market became a billion dollar industry that Apple had 50 percent of the market.

Triumph of the Nerds part 2...
IBM was started by Tom Watson and Tom Watson Jr. They were the big player in the server market and they
wanted to get into the growing PC market. An typical IBM employee worked Monday to Friday starting at 8
O'Clock and ending the day at 5 O'Clock. They have to wear white shirts with starched collars with garters on
the legs to keep the socks high. They had a way of working you had to follow and they even had a song book
full of songs called, "Songs of IBM." They had a corporate culture unique to them. For a big company like
them to notice Apple and the growing success of the PC you know it had to be going well.
In August of 1979 IBM enlisted Bill Lowe to head the team that would make the first IBM PC. Bill and his
team in Florida had to come up with a way to make an IBM fast to not loose too much of the market to
competitors. His idea was to go against common IBM thinking and make it open architecture and use off the
shelf components to make the PC. They still had one problem. They needed both a computer language and an
Operating System for the computer to work. They had to find somebody to license it to them. They looked at
Gary Kildall and Bill Gates to come up with this software. Kildall had CPM which at the time was the first
and largest OS. Bill Gates had the biggest computer language in Basic. They needed both but they first talked
to Bill Gates.
Bill Gates had a meeting with IBM and told them he did not have a OS. He told IBM to talk to Kildall
because he already had one in CPM. When IBM went to Kildall's house they were told to wait around for
Kildall and had to talk to his wife. When she would not sign the non disclosure agreement, or NDA, IBM
walked away and talked to Gates again. Gates being the great business man he was leaped at the second
chance. Paul Allen who worked for Gates at the time knew of another OS made by a man named Tim
Patterson. His program was called QDOS or quick and dirty dos. It was almost identical to CPM because
Patterson had reversed engineered his OS from it. He could not license the OS to Microsoft because he
worked for a company called Seattle Computer Products or SCP. Bill Gates and Microsoft paid SCP $50,000
for the unlimited use of Qdos. It turned out to be a great deal for Microsoft because they in turn sold the
licenses to each computer for $50 dollars.
So now that Microsoft had both parts needed for IBM they started to make the IBM PC. They called it "The
Floridian Project" and the anticipation for it was big in the PC world. The IBM would release the computer on
August 12, 1981 and eventually sold 2 Million PC's. The killer app was a spreadsheet program called Lotus 1-
2-3 and IBM quickly gained 50% of the PC market. IBM was king but they did make some crucial mistakes
along the way.
IBM did not buy the OS from Gates and did not prevent him from licensing it to other companies. They only
paid Gates a fee to use it on the computers and he could do that with anyone else he so wanted. Intel made the
CPU for the IBM computer and like Microsoft they too could sell the CPU to anyone that wanted one. With
those two key components open to competitors it was only a matter of time before somebody came along and
take on IBM.
That company was Rod Canion and Compaq. Compaq could get all the parts it needed for a PC off the shelf
and could get the software from Microsoft. What they could not get was the ROM-BIOS that was proprietary
to IBM. Compaq had to use a technique called "clean room reverse engineering" to copy the IBM ROM-BIOS
legally. Eventually they succeeded and the first IBM "Clone" computer was made. Since Compaq did not
have the high costs of IBM they could sell the computer a lot less to consumers. It became a huge success and
eventually other computer makers also started to sell IBM clone computers. IBM was seeing its market share
sink. They had to come up with a way to gain back what they had lost.
IBM came with with the next IBM called computer called the OS2. Unlike the previous IBM PC the OS2 was
more closed ended and did not use off the shelf computer parts. They wanted a proprietary OS for it and went
to Microsoft to get it. Microsoft and IBM started to work on the new OS together. At the same time Microsoft
was working on a new OS that they were calling Windows. Microsoft claims to have told IBM to use
Windows and not OS2 for there next computer. IBM did not like that idea and the relationship started to
crumble. The closed down buttoned culture of IBM did not mesh well with the young upstart free wheeling
Microsoft. Eventually Bill Gates decided to stick with his OS called Windows and dump IBM. IBM was not
happy with this decision and did not make an IBM that had Microsoft software on it.
The Relationship between IBM and Microsoft was an interesting one. It lasted 10 years and made both
companies a lot of money. IBM became the biggest PC manufacturer because of it but because of some
mistakes also cost them a lot of money in the long run. Because IGM did not buy the OS from Microsoft or
make sure Microsoft could not license it to anybody else IBM's time in the sun was short lived. Eventually it
because the OS and not the Hardware that drove the personal computer business and let Microsoft become
one of the leaders of a one hundred billion dollar industry and IBM left in the dust.

Triumph of the Nerds Part 3 Summary
In 1971 Xerox started a think tank in Palo Alto, Ca. called PARC. The goal of PARC was to think of the
future of computing and how to dominate the market. For years they developed and built a computer they
called "Alto." It cost them $10,000 to build and was never sold to the public. The Alto computer was unique
because it had a graphical user interface or GUI. Unlike the current leader IBM that ran on the disk operating
system or DOS Alto had a nice GUI that let the user move around a mouse on a screen and click it to select
documents or other items. They could then do whatever they wanted to it like copy it to a floppy disk by
dragging the file over to the destination and dropping it in the folder. This went way beyond what anyone at
the time was using with the keyboard based typing input of DOS. The Alto computer was also able to connect
to other computers via an Ethernet that was also ahead of its time. The Alto had a printer connected to it that
was able to print out what the user viewed on screen. This went beyond the normal dot matrix printers of the
time.

One of the co-founders of Apple computers Steve Jobs eventually took a tour of PARC and saw the Alto
computer. It was after this viewing that he decided that a GUI on a computer was the way to go and the future
of the personal computer. He made it his goal to make a computer that used a GUI interface and not the text
based interface of DOS. IBM was taking a big chunk of sales away from the Apple II so Apple needed a
better competitor. Steve Jobs called the next computer Lisa and wanted it to have a GUI like what he saw on
the Xerox ALTO computer. The Lisa eventually came out in the year 1983 and cost a staggering $9,995
dollars. It was not a commercial success because of the high price compared to the IBM computers even with
the fancy GUI interface. Jeff Raskin then came up with a lower priced computer for Apple that he called the
Macintosh. Raskin's idea was to sell the Macintosh for around $600 dollars closing the gap on the IBM
machines. Steve Jobs took over the project and using the ideas from Lisa came up with the machine.

The Macintosh was finally released to much fan fair on January 24 in 1984. It was accompanied with a 15
million dollar advertising campaign that had a Super bowl ad. It was sold at the price of $1,995 half of which
was pure profit for Apple. The Macintosh became the first affordable PC with a GUI interface. After an initial
surge by last 1984 sales of the Machintosh were slow. It did not have a killer ap for the system and Apple
needed to find a way to bring back up sales. They decided to work with Microsoft to come up with a software
package to be sold for the Mac. Later they decided to talk with John Warnock who had founded a company
called Adobe. Adobe was working on a program that would enable you to print out exactly what you saw on
your screen. At the time because of the limits of the software and dot matrix printers this was not possible.
Warnock, who was at one time a member of PARC, came up with what he called laser printing. With this new
technology it lead to a new business called desktop publishing and led to a big boon for Apple. It was not
cheap to buy the laser printers so it never grew into a larger market for Apple. Apple was floundering as a
company and needed to turn things around. John Sculley, who was originally hired by Steve Jobs from
PepsiCo, came up with new ideas to turn around Apple. Unfortunately for Steve Jobs those ideas did not
include him being with the company. The Apple board decided to use Sculley's ideas and Jobs was forced out
of the company he had founded.

Another development also doomed Apple. With there partnership with Microsoft Bill Gates saw another
opportunity for his company to expand. Gates saw the future of a GUI interface and began work on one. At
first they used a GUI on top of there DOS OS that they called Windows. It was very rough and at first did not
work very well. Apple saw Windows and tried to sue Microsoft for using an interface that looked like Mac.
Eventually Apple lost the suit and Microsoft was able to continue to work on Windows. Six years later in
1990 they released a version of Windows they called Windows 3. This was the first Windows OS that was
exactly like Mac. It was an instant hit selling 3 million copies in the first year. Windows 3 led to Microsoft
being the computer OS standard. Because of the nice GUI interface and wealth of programs Windows
outraced all the competitors. Microsoft became the software company in the world while Apple was left
struggling along and trying to find a new vision without Jobs at the helm.