Home Computer Field Leaders Don't Dare Miss This Reunion

By Dennis Kneale, Staff Reporter
Wall Street Journal

Phoenix, Ariz. -- January 31, 1985 -- While a few hundred people watch, six executives respond to questions on the future of the computer software industry with answers muffled in layers of fuzzy platitudes.

"Thanks," says moderator Esther Dyson sarcastically. "Not a specific answer in the bunch."

So it went this week at the Personal Computer Forum here, an unusual gathering of some 460 personal computer movers and shakers. They each paid about $1,000 and $145 a night to converge on the sprawling Pointe Tapatio resort here for the personal-computer industry's de facto annual reunion. And while formal sessions yielded little if any blockbuster information, no other event offers a better behind-the-scenes look at how business is done in this young but increasingly competitive industry.

"It's like a great bar that has that magic. All the right people come here," says John F. Shoch, president of Xerox Corp.'s office-systems division.

Nearly every big shot in the personal computer business is here: Apple Computer Inc. founder Steven P. Jobs and president John Sculley; Microsoft Corp. founder William H. Gates; Lotus Development Corp. chairman Mitchell Kapor; Tandon Corp. chairman Sirjang Lal Tandon; Digital Research Inc. president John Rowley, and Compaq Computer Corp. president Rod Canion, to name a few. International Business Machines Corp. sent 13 people, Hewlett-Packard Co. sent nine and American Telephone & Telegraph Co. sent four.

Though participants supposedly come to discuss and divine the industry's future, few are willing to spell out such cosmic thoughts. Instead, everyone looks for an edge by trading rumors and putting down the competition. Much is made of who is seen together on horseback or the 25 lighted tennis courts and in the nine restaurants and dozen heated pools. While panels debate arcane stuff like "screen control" and "foundations for applications," the halls are filled with hagglers doing deals and schmoozing with potential partners.

Some high-technology executives don't dare ignore the annual personal computer forum, sponsored this year by EDventure Holdings Inc., the company of newsletter publisher Esther Dyson. "Esther is the industry's matchmaker," says Terence Garnett, chairman of software start-up Lightyear Inc. "Once she gets behind a product, she really beats up on people to get them to take a look at it."

Another indication of her power comes from James H. Johnson, president of Human Edge Software Corp. "The only reason I came here is not to (anger her). All the analysts call her; she's really been dumping on us lately. So that's why I came -- to make amends."

Doing business here can amount to buttonholing the right person in the right mood. During a Monday coffee break on a mountaintop terrace, Apple marketing manager Mike Murray persuades Software Digest Inc. president Joseph Segel to publish a newsletter reviewing Macintosh software. Meanwhile, Software Publishing Corp. president Fred Gibbons strolls through a packed dining room, clutching a "hit list" of 13 people to see.

Within a couple of hours, Mr. Gibbons closes three pacts, Silicon Valley style, with a handshake. He agrees with Mr. Segel to pay for a competitive comparison of Apple and Software Publishing software products. Mr. Gibbons agrees to sell a new series of inexpensive programs through one distributor, if that distributor can persuade B. Dalton bookstores to sell it. And he agrees to swap customer mailing lists with a certain computer company that also competes against IBM.

Next Mr. Gibbons, whose company recently went public, is off to a few "spy sessions," product demonstrations by other companies. "These are my competitors," he says. "I'm going to go in and listen, see if there's nothing new under the sun."

Protocol here demands that such visits be announced and that visitors leave if requested to do so. Public-relations executive Melissa Waggener says she was allowed to stay at the demonstration given by one of her client's competitors but struck out trying to get a copy of the competitor's press kit.

Everyone spends a certain amount of time here tracking rumors. Word has it that Benjamin Rosen, the venture capitalist who put money into software maker Lotus, is about to invest in a new software company for the first time in months, which would be good news for the beleagured, $2 billion-plus market. Mr. Rosen isn't talking, but he doesn't deny rumblings that it is a company known as Ansa. Xerox, meanwhile, is said to be preparing to phase out its low-volume personal computer and word processor lines to get ready for a spring introduction of new computer products and laser printers. But Mr. Shoch of Xerox isn't saying much either.

The panel discussions offered few specifics, but provided some sharp clashes. Gone are the politeness and distaste for public confrontation that marked the early days of the personal-computer industry.

While Microsoft's Mr. Gates publicly dubbed Mr. Kapor of Lotus naive on some issues, Apple -- and especially Mr. Jobs -- sparked the most fireworks. When Mr. Jobs launched into what Miss Dyson later termed "another excerpt from his annual report," she chided, "somewhere in there, an honest answer is trying to get out." A chorus of people jumped on Mr. Jobs, calling some of his statements "simplistic" and his claims for the Macintosh computer exaggerated.

Mr. Jobs, sporting braided-leather suspenders, repeatedly attacked IBM and drew loud laughter when he dubbed the IBM Personal Computer "the old klunker," even as an IBM executive sat beside him. The IBM executive, Robert F. Berland, later countered, "We don't talk about competitors from that point of view. You don't sell products that way."

Mr. Rosen, the venture capitalist and chairman of Compaq Computer Corp., also had barbed words for competitor Apple, which touts its decision to avoid compatibilty with the IBM Personal Computer although IBM and its "clones" hold about 60% of the market. "If you fight that (IBM) standard you have abandoned over 90% of that business market . . . you're off on your own, just proving you're macho," he said in a speech yesterday.

David Bunnell, publisher of a trade magazine known as PC World, called dealers "dinosaurs" and argued that how-to magazine articles on software programs, rather than dealer support, were responsible for strong sales. "Oooh! Talk about naive," erupted dealer Seymour Merrin of ComputerWorks. Dealer Edward J. Ramos of Future Information Systems Inc. took the microphone to threaten with a smile: "Your magazine will no longer be sold in our stores."