June 25, 1985: Microsoft co-founder Invoice Gates sends a memo to Apple execs suggesting that Cupertino ought to license its Mac working system and extra know-how to different corporations.
Apple CEO John Sculley and Macintosh boss Jean Louis Gassée ignore the recommendation of the 30-year-old Gates, who on the time is greatest often called a Mac developer. 5 months later, Microsoft releases Home windows 1.0.
Invoice Gates’ memo affords recommendation to Apple: License Mac OS
The truth that Gates despatched such a memo to Sculley and Gassée appears superb, contemplating the divergent paths that Microsoft and Apple in the end took. Regardless of briefly entertaining the thought of licensing Mac OS, Apple caught to its weapons as a maker of each {hardware} and software program. Gates, in the meantime, dominated the pc business by making Home windows the usual on nearly each non-Apple PC.
On the time, although, Gates wasn’t viewing it like this. In actual fact, he was keen to supply this recommendation to Apple.
“Apple should make Macintosh an ordinary,” Gates wrote in his June 1985 memo. “However no private pc firm, not even IBM, can create an ordinary with out impartial help. Despite the fact that Apple realized this, they haven’t been capable of acquire the impartial help required to be perceived as an ordinary.”
He went on to argue that Apple ought to license Mac know-how to between three and 5 important producers to construct Mac clones. Ideally, these could be giant corporations corresponding to AT&T, Digital Gear Company, Hewlett-Packard and Motorola.
Microsoft may assist with Mac OS licensing technique
Microsoft, he continued, “may be very keen to assist Apple implement this technique. We’re conversant in the important thing producers, their methods and strengths. We even have an excessive amount of expertise in OEMing system software program.” (You may learn Gates’ memo in its entirety.)
Sculley, it appears, was . Gassée, who had taken over the Mac division from Apple co-founder Steve Jobs, was not. Gassée thought the Mac was so superior to its rivals that it might not face any severe competitors. He additionally thought Apple was higher off sticking to its high-profit-margin technique of promoting Mac OS solely on Apple’s personal computer systems.
Finally, Apple determined to not go ahead with the proposal in Gates’ memo. The corporate then made the error of signing an settlement with Gates that allowed Microsoft to make use of components of the Mac’s feel and appear in Home windows.
Microsoft goes up, Apple goes down
The deal gave Microsoft a “non-exclusive, worldwide, royalty-free, perpetual, nontransferable license to make use of [parts of the Mac technology] in current and future software program packages, and to license them to and thru third events to be used of their software program packages.”
At first, Gassée was fairly right. Rivals couldn’t hope to measure as much as what Apple was doing. Home windows 1.0 was nearly laughably dangerous, and definitely no actual competitors to Apple. However relations soured between the 2 corporations when the brand new, improved Home windows 2.0 arrived a few years later in 1987.
Apple sued, alleging that Microsoft copied 189 completely different design components illegally. U.S. District Choose William Schwarzer dominated that the prevailing license between Apple and Microsoft coated the interface components within the new Home windows.
This set the tone for Apple and Microsoft’s trajectories within the first half of the Nineteen Nineties. Microsoft went on to overcome the world with Home windows 95, whereas Apple got here dangerously near chapter. Satirically, Apple finally licensed Mac OS to third-party producers. Nonetheless, this technique solely made issues worse for Cupertino.
It took Steve Jobs’ return to Apple within the late Nineteen Nineties to reverse the businesses’ programs. In 2025 — 4 a long time after Gates’ memo to Apple, and with AI driving the markets — Apple and Microsoft nonetheless rank close to the highest of the checklist of the world’s most respected corporations.
