Back in May 2007, I had the great fortune to be in the audience when Steve Jobs and Bill Gates appeared live for the first time together, at The Wall Street Journal’s D Conference. It was a historic event.
During their conversation, Steve Jobs preferred to look forwards rather than backwards. “It’s all about what happens tomorrow,” he said. “So let’s go invent tomorrow rather than worrying about what happened yesterday.”
Now he's got another chance to follow through.
Over the previous 20 years, Gates’s Microsoft Corp. (Nasdaq: MSFT) and Jobs’s Apple Inc. (Nasdaq: AAPL) have been such an adversarial double act that every move of one could often only be understood in terms of its impact on the other.
Today, however, the historic rivalry is on its last legs. Bipolarity has been replaced by multipolarity. The digital great-power landscape is so much more complex than it was two years ago that Microsoft and Apple might now be closer to being friends than enemies.
Think of what’s going on in technology in terms of traditional geo-politics. For 500 years, from the Middle Ages to the late 19th century, the hostility between England and France made the technology battles between Apple and Microsoft seem like a playground spat. Then, in the last part of the 19th century, Germany emerged, a virile new power slowly pushing those great old rivals, England and France, closer together. And then, in the 20th century, those two historic rivals fought two world wars together against Germany.
The equivalent of Germany in today’s technology great-power game is, of course, Google (Nasdaq: GOOG). The new superpower from Mountain View has so dramatically reconstituted the entire balance of power in the technology industry that Apple and Microsoft are slowly, but surely, discovering that they might, after all this time, actually be allies.
In 2005, Steve Ballmer, Microsoft CEO said, "Google's not a real company. It's a house of cards." He couldn’t have been more wrong. Today, Microsoft is so obsessed with Google’s threat as a rival OS-, enterprise software-, and cloud-based superpower that all of Microsoft’s most salient plays can be interpreted in anti-Google terms.
Thus Microsoft’s massive financial investment in Bing, its rival to the ubiquitous Google search-engine. Thus its long and now fruitful courtship of Yahoo Inc. (Nasdaq: YHOO) as a medium-power ally in their anti-Google axis. And thus Microsoft’s almost pathological fear of Google, which, in 2005, resulted in Ballmer screaming: "****ing Eric Schmidt… I'm going to ****ing bury that guy!”
Apple’s new iTunes/iPhone-fueled strength as a major new media power changes everything. As the enemy of its traditional enemy, Google always seemed a natural ally to Apple. Indeed, they became so strategically close that Eric Schmidt, Google CEO, sat on the Apple board, and the two companies even had an unwritten agreement not to poach each other’s workers.
But all this changed last week when, in a move that took most technology folks by surprise, Eric Schmidt resigned from the Apple board.
In retrospect, however, it’s the surprise that is surprising. This breach goes far beyond Apple’s rejection of the iPhone version of Google Voice. It could represent the beginning of a major new realignment of great technology power relationships.
As Google develops its Android smartphone and mobile operating system, it will inevitably become the most dangerous rival to Apple’s iTunes/iPhone ecosystem. As iTunes increasingly becomes the dominant aggregator of online media, one of its major challenges will come from the Google-owned YouTube Inc. And as Google transforms its Chrome browser into an OS for the real-time Web, it will inevitably collide with Apple’s Safari browser.
So what does happen between Microsoft and Apple as the tomorrow Jobs referred to back in May 2007 becomes today? The truth is that they have much in common. Both are intrinsically opposed to the “freemium” economic model of many new Web companies. Both could also be swept away by the rampaging real-time stream ecosystem of Twitter Inc. and Facebook (Nasdaq: FB).
Most of all, though, both fear Google, the one company that simultaneously challenges Microsoft’s historic dominance of the traditional operating-system market and Apple’s new strength in the emerging mobile-media economy. And if Google’s new Chrome Operating System represents a genuine challenge to both Microsoft Windows and Apple’s platforms, then some sort of informal alliance between these two companies isn’t hard to imagine.
So is it possible that Bill Gates will replace Eric Schmidt on the Apple board? Why not? If those old enemies England and France can fight two great wars together, then Bill and Steve can certainly sit on the same corporate board.
— Andrew Keen, Silicon Valley author, broadcaster, and entrepreneur, can be reached on Twitter at @ajkeen.