The Executive Computer

Apple Completes Its Transformation

By Peter H. Lewis
The New York Times

January 24, 1988

San Francisco -- THE MacWorld Expo, a computer trade show and conference held here earlier this month, signaled the success of Apple Computer Inc.'s transformation from a renegade manufacturer of hobbyists' computers to supplier of information systems to the most powerful corporations in America.

There were more than 350 exhibitors at MacWorld, and it seemed as if most of them were wooing the business market with new data bases, spreadsheets, word processors, laser printers and networking strategies.

In the last year, Apple, which is based in Cupertino, Calif., introduced the Mac II and the Mac SE - both highly powerful and expandable, and relatively simple to operate. Now, other companies are coming out with business-oriented software for Apple computers that is equal to, and sometimes better than, rival programs in the I.B.M. world.

Apple's metamorphosis began in 1985 when John Sculley, the former president of Pepsico, wrested control of the company from its remaining co-founder, Steven Jobs. Since then Mr. Sculley has worked hard to overturn Apple's anti-establishment image and the way the company does business.

Until Mr. Sculley took over, Apple seemed at times to be more a religion than a business. The charismatic Mr. Jobs ruled by emotion. Macintosh developers and users not only viewed their machines as technically superior to rivals from the International Business Machines Corporation but also viewed Apple's corporate culture as morally and ethically superior.

Apple even tried to cultivate that image publicly. This was most pronounced in the television commercial announcing the Macintosh personal computer in 1984.

In that commercial - introduced to the largest television audience of the year during a Super Bowl broadcast - herds of gray, drone-like workers filed into an auditorium and sat staring up at a video image of Big Brother (Big Blue, that is), who spoke about ways of the established order. Suddenly a lone figure (young, attractive, very Californian) raced in and hurled something at the screen, breaking the spell. The Mac - ''the computer for the rest of us'' - was born.

Last week, in the cavernous Moscone Center here, thousands of Macintosh buyers clad in business suits filed into the main hall. They found themselves staring up at a giant video image of Mr. Sculley, who spoke of a new world in which cooperation, not confrontation, was essential. As Mr. Sculley spoke, I half-expected a lone runner (older, graying, very New York) to race in and hurl something at the screen.

The Mac, Mr. Sculley said, was now the computer ''for all of us.''

The days when one company could dominate the business market are over, he said, and today each company is ''just another node along the network.''

A few minutes later he was on the dais with Kenneth H. Olsen, chairman of one of the larger nodes, the Digital Equipment Corporation. Apple and Digital were there together to acknowledge they are more than just good friends.

Digital, No. 2 to I.B.M. in large business computers, Apple, No. 2 to I.B.M. in small business computers, have signed a treaty of cooperation on a single unified communications standard for connecting Macs and Digital's Vax minicomputers. Minis are used to run operations on a departmental level, and larger companies depend on them.

This is unlikely to mean much to most personal computer users. And it is probably less significant to the industry's future than some other recent alliances. The Mac-Vax treaty was, however, a major event for Apple, which can now walk through the front door of any Fortune 500 company with Digital, instead of sneaking in through the door to the art department, as it sometimes had do in the past. The Mac has often been brought in as a desktop publishing or graphics machine; once inside it slowly gained acceptance for other purposes, like running spreadsheets and data bases.

The Mac-Vax deal is also beneficial for Digital. Remember the Rainbow, Digital's woebegone entry into the PC market several years ago? Digital lost a pot of gold when its Rainbow ended, but now it has a bushel of Apples. That's important for Digital because many businesses are discovering the value of replacing expensive and limited-function terminals with versatile personal computers.

The Mac-Vax pact also brings to light an important aspect of corporate computing: the rise of multivendor sites. Companies that dreaded the idea of mixing and matching are now exploring the benefits of using computers from different makers. The key test in the next decade will be whether these different systems can work in harmony. Apple realizes this, and that is why Mr. Sculley is promoting co-existence.

I.B.M.'s strategy is to persuade a company of the advantages of seeking a single source for every computing need, from desktop PC to work station to minicomputer to mainframe. In theory the lowliest person at the PC level could share data and files with the biggest mainframe. The system of connections and pipelines - what is known as the System Network Architecture, or S.N.A. - is reportedly coming along nicely in I.B.M.'s development labs.

Now Apple and Digital have their own plan, based on the international standard known as O.S.I., for open systems interconnection. It will allow Macs and Digital not just to coexist but to work together seamlessly. Mr. Olsen of Digital said his customers had demanded easier Vax-to-Mac links. According to numbers supplied by Apple and Digital, 36 percent of all Vax installations already use the Macintosh, as a replacement for a Vax terminal. Linking them has been possible but awkward. New products will soon make these connections easier, the companies said.

The immediate advantage for Apple is psychological. Standing on Digital's shoulders, Apple appears almost as tall as I.B.M. The Mac gains more credibility as a business machine and is more likely than ever to be added to corporate buying lists.

Many corporate buyers have seen Macs as somewhat risky or somewhat naughty; buying I.B.M. was a sure bet. Now, because of the confusion following I.B.M.'s switch last year from the PC line to the PS/2 line of personal computers, Apple has a window of opportunity. Its Macintosh technology is established and admired. And now, thanks to Mr. Sculley, its image is following suit.

Copyright 1988 The New York Times Company