The History of Computing

Welcome to the History of Computing Podcast, where we explore the history of information technology. Because by understanding the past, we’re able to be prepared for the innovations of the future! Today we’re going to look at the emergence of the web through the lens of Netscape, the browser that pushed everything forward into the mainstream. The Netscape story starts back at the University of Illinois, Champaign-Urbana where the National Center for Supercomputing Applications (or NCSA) inspired Marc Andreessen and Eric Bina to write Mosaic, which was originally called xmosaic and built for X11 or the X Window System. In 1992 there were only 26 websites in the world. But that was up from the 1 that Internet pioneer Tim Berners-Lee built at info.cern.ch in 1991. The internet had really only been born a few years earlier in 1989. But funded by the Gore Bill, Andreessen and a team of developers released the Alpha version of the NCSA Mosaic browser in 1993 and ported it to Windows, Mac, and of course the Amiga. At this point there were about 130 websites. Version two of Mosaic came later that year and then the National Science Foundation picked up the tab to maintain Mosaic from 94 to 97. James Clark, a co-founder of Silicon Graphics and a legend in Silicon Valley, took notice. He recruited some of the Mosaic team, led by Marc Andreessen, to start Mosaic Communications Corporation, which released Netscape Navigator in 1994, the same year Andreessen graduated from college. By then there were over 2,700 websites, and a lot of other people were taking notice after 2 four digit growth years. Yahoo! and EXCITE were released in 1994 and enjoyed an explosion in popularity, entering a field with 25 million people accessing such a small number of sites. Justin Hall was posting personal stuff on links.net, one of the earliest forms of what we now call blogging. Someone else couldn’t help but notice: Bill Gates from Microsoft. He considered cross-platform web pages and the commoditization of the operating system to be a huge problem for his maturing startup called Microsoft, and famously sent The Internet Tidal Wave memo to his direct reports, laying out a vision for how Microsoft would respond to this thread. We got Netscape for free at the University, but I remember when I went to the professional world we had to pay for it. The look and feel of Navigator then can still be seen in modern browsers today. There was an address bar, a customizable home page, a status bar, and you could write little javascripts to do cutesy things like have a message scroll here and there or have blinked things. 1995 also brought us HTML frames, fonts on pages, the ability to change the background color, the ability to embed various forms of media, and image maps. Building sites back then was a breeze. And with an 80% market share for browsers, testing was simple: just open Netscape and view your page! Netscape was a press darling. They had insane fans that loved them. And while they hadn’t made money yet, they did something that a lot of companies do now, but few did then: they went IPO early and raked in $600 million in their first day, turning Marc Andreessen the poster child into an overnight sensation. They even started to say that the PC would live on the web - and it would do so using Netscape. Andreessen then committed the cardinal sin that put many in tech out of a job: he went after Microsoft claiming they’d reduce Microsoft to a set of “poorly debugged device drivers.” Microsoft finally responded. They had a meeting with Netscape and offered to acquire the company or they would put them out of business. Netscape lawyered up, claiming Microsoft offered to split the market up where they owned Windows and left the rest to Netscape. Internet Explorer 1 was released by Microsoft in 1995 - a fork of Mosaic which had been indirectly licensed from the code Andreessen had written while still working with the NCSA in college. And so began the “Browser Wars” with Netscape 2 being released and Internet Explorer 2, the same year. 1995 saw the web shoot up to over 23,000 sites. Netscape 2 added Netscape Mail, an email program with about as simple a name as Microsoft Mail, which had been in Windows since 1991. In 1995, Brendan Eich, a developer at Netscape wrote SpiderMonkey, the original JavaScript engine, a language many web apps still use today (just look for the .jsp extension). I was managing labs at the University of Georgia at the time and remember the fast pace that we were upgrading these browsers. NCSA telnet hadn’t been updated in years but it had never been as cool as this Netscape thing. Geocities popped up and I can still remember my first time building a website there and accessing incredible amounts of content being built - and maybe even learning a thing or two while dinking around in those neighborhoods. 1995 had been a huge and eventful year, with nearly 45 million people now “on the web.” Amazon, early search engine Altavista, LYCOS, and eBay launching as well. The search engine space sure was heating up… Then came 1996. Things got fun. Point releases of browsers came monthly. New features dropped with each release. Plugins for Internet Explorer leveraged API hooks into the Windows operating system that made pages only work on IE. Those of us working on pages had to update for both, and test for both. By the end of 1996 there were over a quarter million web pages and over 77 million people were using the web. Apple, The New York Times, Dell.com appeared on the web, but 41 percent of people checked AOL regularly and other popular sites would be from ISPs for years to come. Finally, after a lot of talk and a lot of point releases, Netscape 3 was released in 1997. Javascript got a rev, a lot of styling elements some still use today like tables and frames came out and forms could be filled out automatically. There was also a gold version of Netscape 3 that allowed editing pages. But Dreamweaver gave us a nice WYSIWIG to build web pages that was far more feature rich. Netscape got buggier, they bit on more and more thus spreading developers thing. They just couldn’t keep up. And Internet Explorer was made free in Windows as of IE 3, and had become equal to Netscape. It had a lot of plugins for Windows that made it work better on that platform, for better or worse. The Browser Wars ended when Netscape decided to open source their code in 1998, creating the Mozilla project by open sourcing the Netscape Browser Suite source code. This led to Waterfox, Pale Moon, SeaMonkey, Ice Weasel, Ice Cat, Wyzo, and of course, Tor Browser, Swiftfox, Swift Weasel, Timberwolf, TenFourFox, Comodo IceDragon, CometBird, Basilisk, Cliqz, AT&T Pogo, IceCat, and Flock. But most importantly, Mozilla released Firefox themselves, which still maintains between 8 and 10 percent marketshare for browser usage according to who you ask. Of course, ultimately everyone lost the browser wars now that Chrome owns a 67% market share! Netscape was sold to AOL in 1999 for $4.2 billion, the first year they dropped out of the website popularity contest called the top 10. At this point, Microsoft controlled the market with an 80% market share. That was the first year Amazon showed up on the top list of websites. The Netscape problems continued. AOL released Netscape 6 in 2000, which was buggy and I remember a concerted effort at the time to start removing Netscape from computers. In 2003, after being acquired by Time Warner, AOL finally killed off Netscape. This was the same year Apple released Safari. They released 7.2 in 2004 after outsourcing some of the development. Netscape 9, a port of Firefox, was released in 2007. The next year Google Chrome was released. Today, Mozilla is a half-billion dollar a year not-for profit. They ship the Firefox browser, the Firefox OS mobile OS, the online file sharing service Firefox Send, the Bugzilla bug tracking tool, the Rust programming language, the Thunderbird email client, and other tools like SpiderMonkey, which is still the javascript engine embedded into Firefox and Thunderbird. If the later stage of Netscape’s code in the form of the open source Mozilla projects appeal to you, consider becoming a Mozilla Rep. You can help contribute, promote, document, and build the community with other passionate and knowledgeable humans that are on the forefront of pushing the web into new and beautiful places. For more on that, go to reps.mozilla.org. Andreessen went on to build Opsware with Ben Horowitz (who’s not a bad author) and others. He sold the hosting business and in 2005 continued on with Horowitz founded Andreessen Horowitz which were early investors of Facebook, Foursquare, GitHub, Groupon, LinkedIn, Pinterest, Twitter, Jawbone, Zynga, Skype, and many, many others. He didn’t win the browser wars, but he has been at the center of helping to shape the Internet as we know it today, and due to the open sourcing of the source code many other browsers popped up. The advent of the cloud has also validated many of his early arguments about the web making computer operating systems more of a commodity. Anyone who’s used Office 365 online or Google apps can back that up. Ultimately, the story of Netscape could be looked at as yet another “Bill Gates screwed us” story. But I’m not sure that does it justice. Netscape did as much to shape the Internet in those early days as anything else. Many of those early contributions, like the open nature of the Internet, various languages and techniques, and of course the code in the form of Mozilla, live on today. There were other browsers, and the Internet might have grown to what it is today. But we might not have had as much of the velocity without Andreessen and Netscape and specifically the heated competition that led to so much innovation in such a short period of time - so we certainly owe them our gratitude that we’ve come as far as we have. And I owe you my gratitude. Thank you so very much for tuning into another episode of the History of Computing Podcast. We’re lucky to have you. Have a great day!

Welcome to the History of Computing Podcast, where we explore the history of information technology. Because by understanding the past, we’re able to be prepared for the innovations of the future! Today we’re going to look at the emergence of Google’s Android operating system. Before we look at Android, let’s look at what led to it. Frank Canova who built a device he showed off as “Angler” at COMDEX in 1992. This would be released as the Simon Personal Communicator by BellSouth and manufactured as the IBM Simon by Mitsubishi. The Palm, Newton, Symbian, and Pocket PC, or Windows CE would come out shortly thereafter and rise in popularity over the next few years. CDMA would slowly come down in cost over the next decade. Now let’s jump to 2003. At the time, you had Microsoft Windows CE, the Palm Treo was maturing and supported dual-band GSM, Handspring merged into the Palm hardware division, Symbian could be licensed but I never met a phone of theirs I liked. Like the Nokia phones looked about the same as many printer menu screens. One other device that is more relevant because of the humans behind it was the T-Mobile sidekick, which actually had a cool flippy motion to open the keyboard! Keep that Sidekick in mind for a moment. Oh and let’s not forget a fantastic name. The mobile operating systems were limited. Each was proprietary. Most were menu driven and reminded us more of an iPod, released in 2001. I was a consultant at the time and remember thinking it was insane that people would pay hundreds of dollars for a phone. At the time, flip phones were all the rage. A cottage industry of applications sprung up, like Notify, that made use of app frameworks on these devices to connect my customers to their Exchange accounts so their calendars could sync wirelessly. The browsing experience wasn’t great. The messaging experience wasn’t great. The phones were big and clunky. And while you could write apps for the Symbian in Qt Creator or Flash Lite or Python for S60, few bothered. That’s when Andy Rubin left Danger, the company the cofounded that made the Sidekick and joined up with Rich Miner, Nick Sears, and Chris White in 2003 to found a little company called Android Inc. They wanted to make better mobile devices than were currently on the market. They founded Android Inc and set out to write an operating system based on Linux that could rival anything on the market. Rubin was no noob when cofounding Danger. He had been a robotics engineer in the 80s, a manufacturing engineer at Apple for a few years and then got on his first mobility engineering gig when he bounced to General Magic to work on Magic Cap, a spinoff from Apple FROM 92 TO 95. He then helped build WebTV from 95-99. Many in business academia have noted that Android existed before Google and that’s why it’s as successful as it is today. But Google bought Android in 2005, years before the actual release of Android. Apple had long been rumor milling a phone, which would mean a mobile operating system as well. Android was sprinting towards a release that was somewhat Blackberry-like, focused on competing with similar devices on the market at the time, like the Blackberries that were all the rage. Obama and Hillary Clinton was all about theirs. As a consultant, I was stoked to become a Blackberry Enterprise Server reseller and used that to deploy all the things. The first iPhone was released in 2007. I think we sometimes think that along came the iPhone and Blackberries started to disappear. It took years. But the fall was fast. While the iPhone was also impactful, the Android-based devices were probably more-so. That release of the iPhone kicked Andy Rubin in the keister and he pivoted over from the Blackberry-styled keyboard to a touch screen, which changed… everything. Suddenly this weird innovation wasn’t yet another frivolous expensive Apple extravagance. The logo helped grow the popularity as well, I think. Internally at Google Dan Morrill started creating what were known as Dandroids. But the bugdroid as it’s known was designed by Irina Blok on the Android launch team. It was eventually licensed under Creative Commons, which resulted in lots of different variations of the logo; a sharp contrast to the control Apple puts around the usage of their own logo. The first version of the shipping Android code came along in 2008 and the first phone that really shipped with it wasn’t until the HTC Dream in 2009. This device had a keyboard you could press but also had a touch screen, although we hadn’t gotten a virtual keyboard yet. It shipped with an ARM11, 192MB of RAM, and 256MB of storage. But you could expand it up to 16 gigs with a microSD card. Oh, and it had a trackball. It bad 802.11b and g, Bluetooth, and shipped with Android 1.0. But it could be upgraded up to 1.6, Donut. The hacker in me just… couldn’t help but mod the thing much as I couldn’t help but jailbreak the iPhone back before I got too lazy not to. Of course, the Dev Phone 1 shipped soon after that didn’t require you to hack it, something Apple waited until 2019 to copy. The screen was smaller than that of an iPhone. The keyboard felt kinda’ junky. The app catalog was lacking. It didn’t really work well in an office setting. But it was open source. It was a solid operating system and it showed promise as to the future of not-Apple in a post-Blackberry world. Note: Any time a politician uses a technology it’s about 5 minutes past being dead tech. Of Blackberry, iOS, and Android, Android was last in devices sold using those platforms in 2009, although the G1 as the Dream was also known as, took 9% market share quickly. But then came Eclair. Unlike sophomore efforts from bands, there’s something about a 2.0 release of software. By the end of 2010 there were more Androids than iOS devices. 2011 showed the peak year of Blackberry sales, with over 50 million being sold, but those were the lagerts spinning out of the buying tornado and buying the pivot the R&D for the fruitless next few Blackberry releases. Blackberry marketshare would zero out in just 6 short years. iPhone continued a nice climb over the past 8 years. But Android sales are now in the billions per year. Ultimately the blackberry, to quote Time a “failure to keep up with Apple and Google was a consequence of errors in its strategy and vision.” If you had to net-net that, touch vs menus was a substantial part of that. By 2017 the Android and iOS marketshare was a combined 99.6%. In 2013, now Google CEO, Sundar Pichai took on Android when Andy Rubin was embroiled in sexual harassment charges and now acts as CEO of Playground Global, an incubator for hardware startups. The open source nature of Android and it being ready to fit into a device from manufacturers like HTC led to advancements that inspired and were inspired by the iPhone leading us to the state we’re in today. Let’s look at the released per year and per innovation: * 1.0, API 1, 2008: Include early Google apps like Gmail, Maps, Calendar, of course a web browser, a media player, and YouTube * 1.1 came in February the next year and was code named Petit Four * 1.5 Cupcake, 2009: Gave us on an-screen keyboard and third-party widgets then apps on the Android Market, now known as the Google Play Store. Thus came the HTC Dream. Open source everything. * 1.6 Donut, 2009: Customizeable screen sizes and resolution, CDMA support. And the short-lived Dell Streak! Because of this resolution we got the joy of learning all about the tablet. Oh, and Universal Search and more emphasis on battery usage! * 2.0 Eclair, 2009: The advent of the Motorola Droid, turn by turn navigation, real time traffic, live wallpapers, speech to text. But the pinch to zoom from iOS sparked a war with Apple.We also got the ability to limit accounts. Oh, new camera modes that would have impressed even George Eastman, and Bluetooth 2.1 support. * 2.2 Froyo, four months later in 2010 came Froyo, with under-the-hood tuning, voice actions, Flash support, something Apple has never had. And here came the HTC Incredible S as well as one of the most mobile devices ever built: The Samsung Galaxy S2. This was also the first hotspot option and we got 3G and better LCDs. That whole tethering, it took a year for iPhone to copy that. * 2.3 Gingerbread: With 2010 came Gingerbread. The green from the robot came into the Gingerbread with the black and green motif moving front and center. More sensors, NFC, a new download manager, copy and paste got better, * 3.0 Honeycomb, 2011. The most important thing was when Matias Duarte showed up and reinvented the Android UI. The holographic design traded out the green and blue and gave you more screen space. This kicked off a permanet overhaul and brought a card-UI for recent apps. Enter the Galaxy S9 and the Huawei Mate 2. * 4.0 Ice Cream Sandwich, later in 2011 - Duarte’s designs started really taking hold. For starters, let’s get rid of buttons. THat’s important and has been a critical change for other devices as well. We Reunited tablets and phones with a single vision. On screen buttons, brought the card-like appearance into app switching. Smarter swiping, added swiping to dismiss, which changed everything for how we handle email and texts with gestures. You can thank this design for Tinder. * 4.1 to 4.3 Jelly Bean, 2012: Added some sweet sweet fine tuning to the foundational elements from Ice Cream Sandwich. Google Now that was supposed to give us predictive intelligence, interactive notifications, expanded voice search, advanced search, sill with the card-based everything now for results. We also got multiuser support for tablets. And the Android Quick Settings pane. We also got widgets on the lock screen - but those are a privacy nightmare and didn’t last for long. Automatic widget resizing, wireless display projection support, restrict profiles on multiple user accounts, making it a great parent device. Enter the Nexus 10. AND TWO FINGER DOWN SWIPES. * 4.4 KitKat, in 2013 ended the era of a dark screen, lighter screens and neutral highlights moved in. I mean, Matrix was way before that after all. OK, Google showed up. Furthering the competition with Apple and Siri. Hands-free activation. A panel on the home screen, and a stand-alone launcher. AND EMOJIS ON THE KEYBOARD. Increased NFC security. * 5. Lollipop came in 2014 bringing 64 bit, Bluetooth Low Energy, flatter interface, But more importantly, we got annual releases like iOS. * 6: Marshmallow, 2015 gave us doze mode, sticking it to iPhone by even more battery saving features. App security and prompts to grant apps access to resources like the camera and phone were . The Nexus 5x and 6P ports brought fingerprint scanners and USB-C. * 7: Nougat in 2016 gave us quick app switching, a different lock screen and home screen wallpaper, split-screen multitasking, and gender/race-centric emojis. * 8: Oreo in 2017 gave us floating video windows, which got kinda’ cool once app makers started adding support in their apps for it. We also got a new file browser, which came to iOS in 2019. And more battery enhancements with prettied up battery menus. Oh, and notification dots on app icons, borrowed from Apple. * 9: Pie in 2018 brought notch support, navigations that were similar to those from the iPhone X adopting to a soon-to-be bezel-free world. And of course, the battery continues to improve. This brings us into the world of the Pixel 3. * 10, Likely some timed in 2019 While the initial release of Android shipped with the Linux 2.1 kernel, that has been updated as appropriate over the years with, 3 in Ice Cream Sandwich, and version 4 in Nougat. Every release of android tends to have an increment in the Linux kernel. Now, Android is open source. So how does Google make money? Let’s start with what Google does best. Advertising. Google makes a few cents every time you click on an ad in an advertisement in messages or web pages or any other little spot they’ve managed to drop an ad in there. Then there’s the Google Play Store. Apple makes 70% more revenue from apps than Android, despite the fact that Android apps have twice the number of installs. The old adage is if you don’t pay for a product, you are the product. I don’t tend to think Google goes overboard with all that, though. And Google is probably keeping Caterpillar in business just to buy big enough equipment to move their gold bars from one building to the next on campus. Any time someone’s making money, lots of other people wanna taste. Like Oracle, who owns a lot of open source components used in Android. And the competition between iOS and Android makes both products better for consumers! Now look out for Android Auto, Android Things, Android TV, Chrome OS, the Google Assistant and others - given that other types of vendors can make use of Google’s open source offerings to cut R&D costs and get to market faster! But more importantly, Android has contributed substantially to the rise of ubiquitious computing despite how much money you have. I like to think the long-term impact of such a democratization of Mobility and the Internet will make the world a little less idiocracy and a little more wikipedia. Thank you so very much for tuning into another episode of the History of Computing Podcast. We’re lucky to have you. Have a great day!

Welcome to the History of Computing Podcast, where we explore the history of information technology. Because understanding the past prepares us for the innovations of the future! Todays episode is on former Social Networking pioneer, Friendster. Today when you go to friendster.com you get a page that the social network is taking a break. The post was put up in 2018. How long did Rip Van Winkle Sleep? But what led to the rise of the first big social network and well, what happened? The story begins in 1973. Talkomatic was a chat room and was a hit in the PLATO or Programmed Logic for Automatic Teaching Operations community at the University of Illinois, an educational learning system that had been running since 1960. Dave Woolley and Douglas Brows at the University of Illinois brought chat and then the staff built TERM-Talk the same year, adding screen sharing and PLATO Notes would be added where you could add notes to your profile. This was the inspiration for the name of Lotus Notes. Then in the 80s came Bulletin Board Systems, 84 brought FidoNet, 88 brought IRC, 96 brought ICQ, and in 96 we got Bolt.com, the first social networking and video website with SixDegrees coming in 1997 as the first real social media website. AOL Instant Messenger showed up the same year and AOL bought ICQ in 99. It was pretty sweet that I didn’t have to remember all those ICQ numbers any more! 1999 - Yahoo! And Microsoft got in the game launching tools called Messenger at about the same time and LiveJournal came along, as well as Habbo, a social networking site for games. By 2001 Six Degrees shut down and Messenger was shipped with XP. But 2002. That was the year the Euro hit the street. Before England dissed it. That was the year Israeli and Palestinian conflicts escalated. Actually, that’s a lot of years, regrettably. I remember scandals at Enron and Worldcom well that year, ultimate resulting in Sarbanes Oxley to counter the more than 5 trillion dollars in corporate scandals that sent the economy into a tailspin. My Georgia Bulldogs football team beat Arkansas to win the SEC title and then beat Florida State in the Sugar Bowl. Nelly released Hot In Here and Eminem released Lose Yourself and Without Me. If film, Harry Potter was searching for the Chamber of Secrets and Frodo was on a great trek to the Two Towers. Eminem was in the theaters as well with 8 Mile. And Friendster was launched by Jonathan Abrams in Mountain View California. They wanted to get people making new friends and meeting in person. It was an immediate hit and people flocked to the site. They grew to three million users in just a few months, catching the attention of investors. As a young consultant, I loved keeping track of my friends who I never got to see in person using Friendster. Napster was popular at the time and the name Friendster came from a mashup of friends and Napster. With this early success, Friendster took $12 million dollars in funding from VC firm Kleiner Perkins Caufield & Byers, Benchmark Capital the next year. That was the year a Harvard student named Mark Zuckerburg launched FaceMash with his roommate Eduardo Saverin for Harvard students in a kinda’ “Hot or Not” game. They would later buy Instagram as a form of euphoric recall, looking back on those days. Google has long wanted a social media footprint and tried to buy Friendster in 2003, but when rejected launched Orkut in 2004 - which just ran in Brazil, tried Google Friend Connect in 2008, which lasted until 2012, Google Buzz, which launched in 2010 and only lasted a year, Google Wave, which launched in 2009 and also only lasted a year, and of course, Google + which ran from 2011 to 2019. Google is back at it again with a new social network called Shoelace out of their Area 120 incubator. The $30 million dollars in Google stock would be worth a billion dollars today. MySpace was also launched in 2003 by Chris DeWolfe and Tom Anderson, growing to have more traffic than Google over time. But Facebook launched in 2004 and after having problems keeping the servers up and running, Friendster's board replaced Abrams as CEO and moved him to chairmen of the board. He was replaced by Scott Sassa. And then in 2005 Sassa was replaced by Taek Kwn and then he was replaced by Kent Lindstrom who was replaced by Richard Kimber. Such rapid churn in the top spot means problems. A rudderless ship. In 2006 they added widgets to keep up with MySpace. They didn’t. They also opened up a developer program and opened up APIs. They still had 52 million unique visitors worldwide in June 2008. But by then, MySpace had grown to 7 times their size. MOL Global, an online payments processor from Malaysia bought the company in 2009 and relaunched the site. All user data was erased and Friendster provided an export tool to move data to other popular sites at the time, such as Flickr. In 2009 Friendster had 3 Million unique visitors per day. They relaunched But that dropped to less than a quarter million by the end of 2010. People abandoned the network. What happened? Facebook eclipsed the Friendster traffic in 2009. Friendster became something more used in Asia than the US. Really, though, I remember early technical problems. I remember not being able to log in, so moving over to MySpace. I remember slow loading times. And I remember more and more people spending time on MySpace, customizing their MySpace page. Facebook did something different. Sure, you couldn’t customize the page, but the simple layout loaded fast and was always online. This reminds me of the scene in the show Silicon Valley, when they have to grab the fire extinguisher because they set the house on fire from having too much traffic! In 2010, Facebook acquired Friendster's portfolio of social networking patents for $40 million dollars. In 2011, Newscorp sold MySpace for $35 million dollars after it had been valued at it peak in 2008. After continuing its decline, Friendster was sold to a social gaming site in 2015, trying to capitalize on the success that Facebook had doing online gaming. But after an immediate burst of users, it too was not successful. In 2018 the site finally closed its doors. Today Friendster is the 651,465th ranked site in the world. There are a few thing to think about when you look at the Friendster story: 1. The Internet would not be what it is today without sites like Friendster to help people want to be on it. 2. The first company on a new thing isn’t always the one that really breaks through 3. You have to, and I mean, have to keep your servers up. This is a critical aspect of maintaining you’re momentum. I was involved with one of the first 5 facebook apps. And we had no idea 2 million people would use that app in the weekend it was launched. We moved mountains to get more servers and clusters brought online and refactored sql queries on the fly, working over 70 hours in a weekend. And within a week we hit 10 million users. That app paid for dozens of other projects and was online for years. 4. When investors move in, the founder usually gets fired at the first sign of trouble. Many organizations simply can’t find their equilibrium after that and flounder. 5. Last but not least: Don’t refactor every year, but if you can’t keep your servers up, you might just have too much technical debt. I’m sure everyone involved with Friendster wishes they could go back and do many things differently. But hindsight is always 20/20. They played their part in the advent of the Internet. Without early pioneers like Friendster we wouldn’t be where we are at today. As Heinlein said, “yet another crew of Rip Van Winkle’s” But Buck Rogers eventually did actually wake back up, and maybe Friendster will as well. Thank you for tuning into another episode of the History of Computing Podcast. We’re lucky to have you. Have a great day!

Welcome to the History of Computing Podcast, where we explore the history of information technology. Because understanding the past prepares us for the innovations of the future! Todays episode is going to be just a little bit unique. Or not unique as the case may be. Bill Gates sent a very important memo on May 26th, 1995. It’s so important because of how well it foreshadows what was about to happen with this weird thing called the Internet. So we’re going to simply provide the unaltered transcript and if you dig it, read a book or two of his. He is a surprisingly good writer. To: Executive Staff and direct reports From: Bill Gates Date: May 26, 1995 The Internet Tidal Wave Our vision for the last 20 years can be summarized in a succinct way. We saw that exponential improvements in computer capabilities would make great software quite valuable. Our response was to build an organization to deliver the best software products. In the next 20 years the improvement in computer power will be outpaced by the exponential improvements in communications networks. The combination of these elements will have a fundamental impact on work, learning and play. Great software products will be crucial to delivering the benefits of these advances. Both the variety and volume of the software will increase. Most users of communications have not yet seen the price of communications come down significantly. Cable and phone networks are still depreciating networks built with old technology. Universal service monopolies and other government involvement around the world have kept communications costs high. Private networks and the Internet which are built using state of the art equipment have been the primary beneficiaries of the improved communications technology. The PC is just now starting to create additional demand that will drive a new wave of investment. A combination of expanded access to the Internet, ISDN, new broadband networks justified by video based applications and interconnections between each of these will bring low cost communication to most businesses and homes within the next decade. The Internet is at the forefront of all of this and developments on the Internet over the next several years will set the course of our industry for a long time to come. Perhaps you have already seen memos from me or others here about the importance of the Internet. I have gone through several stages of increasing my views of its importance. Now I assign the Internet the highest level of importance. In this memo I want to make clear that our focus on the Internet is crucial to every part of our business. The Internet is the most important single development to come along since the IBM PC was introduced in 1981. It is even more important than the arrival of the graphical user interface (GUI). The PC analogy is apt for many reasons. The PC wasn't perfect. Aspects of the PC were arbitrary or even poor. However a phenomena grew up around the IBM PC that made it a key element of everything that would happen for the next 15 years. Companies that tried to fight the PC standard often had good reasons for doing so but they failed because the phenomena overcame any weaknesses that resisters identified. The Internet Today The Internet's unique position arises from a number of elements. TCP/IP protocols that define its transport level support distributed computing and scale incredibly well. The Internet Engineering Task Force (IETF) has defined an evolutionary path that will avoid running into future problems even as eventually everyone on the planet connects up. The HTTP protocols that define HTML Web browsing are extremely simple and have allowed servers to handle incredible traffic reasonably well. All of the predictions about hypertext - made decades ago by pioneers like Ted Nelson - are coming true on the Web. Although other protocols on the Internet will continue to be used (FTP, Gopher, IRC, Telnet, SMTP, NNTP). HTML with extensions will be the standard that defines how information will be presented. Various extensions to HTML, including content enhancements like tables, and functionality enhancements like secure transactions, will be widely adopted in the near future. There will also be enhanced 3D presentations providing for virtual reality type shopping and socialization. Another unique aspect of the Internet is that because it buys communications lines on a commodity bid basis and because it is growing so fast, it is the only "public" network whose economics reflect the latest advances in communications technology. The price paid for corporations to connect to the Internet is determined by the size of your "on-ramp" to the Internet and not by how much you actually use your connection. Usage isn't even metered. It doesn't matter if you connect nearby or half way around the globe. This makes the marginal cost of extra usage essentially zero encouraging heavy usage. Most important is that the Internet has bootstrapped itself as a place to publish content. It has enough users that it is benefiting from the positive feedback loop of the more users it gets, the more content it gets, and the more content it gets, the more users it gets. I encourage everyone on the executive staff and their direct reports to use the Internet. I've attached an appendix, which Brian Flemming helped me pull together that shows some hot sites to try out. You can do this by either using the .HTM enclosure with any Internet browser or, if you have Word set up properly, you can navigate right from within this document. Of particular interest are the sites such as "YAHOO" which provide subject catalogs and searching. Also of interest are the ways our competitors are using their Websites to present their products. I think SUN, Netscape and Lotus do some things very well. Amazingly it is easier to find information on the Web than it is to find information on the Microsoft Corporate Network. This inversion where a public network solves a problem better than a private network is quite stunning. This inversion points out an opportunity for us in the corporate market. An important goal for the Office and Systems products is to focus on how our customers can create and publish information on their LANs. All work we do here can be leveraged into the HTTP/Web world. The strength of the Office and Windows businesses today gives us a chance to superset the Web. One critical issue is runtime/browser size and performance. Only when our Office - Windows solution has comparable performance to the Web will our extensions be worthwhile. I view this as the most important element of Office 96 and the next major release of Windows. One technical challenge facing the Internet is how to handle "real-time" content - specifically audio and video. The underlying technology of the Internet is a packet network which does not guarantee that data will move from one point to another at a guaranteed rate. The congestion on the network determines how quickly packets are sent. Audio can be delivered on the Internet today using several approaches. The classic approach is to simply transmit the audio file in its entirety before it is played. A second approach is to send enough of it to be fairly sure that you can keeping playing without having to pause. This is the approach Progressive Networks Real Audio (Rob Glaser's new company) uses. Three companies (Internet Voice Chat, Vocaltec, and Netphone) allow phone conversations across the Internet but the quality is worse than a normal phone call. For video, a protocol called CU-SeeMe from Cornell allows for video conferencing. It simply delivers as many frames per second as it sees the current network congestion can handle, so even at low resolution it is quite jerky. All of these "hacks" to provide video and audio will improve because the Internet will get faster and also because the software will improve. At some point in the next three years, protocol enhancements taking advantage of the ATM backbone being used for most of the Internet will provide "quality of service guarantees". This is a guarantee by every switch between you and your destination that enough bandwidth had been reserved to make sure you get your data as fast as you need it. Extensions to IP have already been proposed. This might be an opportunity for us to take the lead working with UUNET and others. Only with this improvement and an incredible amount of additional bandwidth and local connections will the Internet infrastructure deliver all of the promises of the full blown Information Highway. However, it is in the process of happening and all we can do is get involved and take advantage. I think that virtually every PC will be used to connect to the Internet and that the Internet will help keep PC purchasing very healthy for many years to come. PCs will connect to the Internet a variety of ways. A normal phone call using a 14.4k or 28.8k baud modem will be the most popular in the near future. An ISDN connection at 128kb will be very attractive as the connection costs from the RBOCs and the modem costs come down. I expect an explosion in ISDN usage for both Internet connection and point-to-point connections. Point-to-point allows for low latency which is very helpful for interactive games. ISDN point-to-point allows for simultaneous voice data which is a very attractive feature for sharing information. Example scenarios include planning a trip, discussing a contract, discussing a financial transaction like a bill or a purchase or taxes or getting support questions about your PC answered. Eventually you will be able to find the name of someone or a service you want to connect to on the Internet and rerouting your call to temporarily be a point-to-point connection will happen automatically. For example when you are browsing travel possibilities if you want to talk to someone with expertise on the area you are considering, you simply click on a button and the request will be sent to a server that keeps a list of available agents who can be working anywhere they like as long as they have a PC with ISDN. You will be reconnected and the agent will get all of the context of what you are looking at and your previous history of travel if the agency has a database. The reconnection approach will not be necessary once the network has quality of service guarantees. Another way to connect a PC will be to use a cable-modem that uses the coaxial cable normally used for analog TV transmission. Early cable systems will essentially turn the coax into an Ethernet so that everyone in the same neighborhood will share a LAN. The most difficult problem for cable systems is sending data from the PC back up the cable system (the "back channel"). Some cable companies will promote an approach where the cable is used to send data to the PC (the "forward channel") and a phone connection is used for the back channel. The data rate of the forward channel on a cable system should be better than ISDN. Eventually the cable operators will have to do a full upgrade to an ATM-based system using either all fiber or a combination of fiber and Coax - however, when the cable or phone companies will make this huge investment is completely unclear at this point. If these buildouts happen soon, then there will be a loose relationship between the Internet and these broadband systems. If they don't happen for some time, then these broadband systems could be an extension of the Internet with very few new standards to be set. I think the second scenario is very likely. Three of the biggest developments in the last five years have been the growth in CD titles, the growth in On-line usage, and the growth in the Internet. Each of these had to establish critical mass on their own. Now we see that these three are strongly related to each other and as they come together they will accelerate in popularity. The On-line services business and the Internet have merged. What I mean by this is that every On-line service has to simply be a place on the Internet with extra value added. MSN is not competing with the Internet although we will have to explain to content publishers and users why they should use MSN instead of just setting up their own Web server. We don't have a clear enough answer to this question today. For users who connect to the Internet some way other than paying us for the connection we will have to make MSN very, very inexpensive - perhaps free. The amount of free information available today on the Internet is quite amazing. Although there is room to use brand names and quality to differentiate from free content, this will not be easy and it puts a lot of pressure to figure out how to get advertiser funding. Even the CD-ROM business will be dramatically affected by the Internet. Encyclopedia Brittanica is offering their content on a subscription basis. Cinemania type information for all the latest movies is available for free on the Web including theater information and Quicktime movie trailers. Competition Our traditional competitors are just getting involved with the Internet. Novell is surprisingly absent given the importance of networking to their position however Frankenberg recognizes its importance and is driving them in that direction. Novell has recognized that a key missing element of the Internet is a good directory service. They are working with AT&T and other phone companies to use the Netware Directory Service to fill this role. This represents a major threat to us. Lotus is already shipping the Internotes Web Publisher which replicates Notes databases into HTML. Notes V4 includes secure Internet browsing in its server and client. IBM includes Internet connection through its network in OS/2 and promotes that as a key feature. Some competitors have a much deeper involvement in the Internet than Microsoft. All UNIX vendors are benefiting from the Internet since the default server is still a UNIX box and not Windows NT, particularly for high end demands, SUN has exploited this quite effectively. Many Web sites, including Paul Allen's ESPNET, put a SUN logo and link at the bottom of their home page in return for low cost hardware. Several universities have "Sunsites" named because they use donated SUN hardware. SUN's Java project involves turning an Internet client into a programmable framework. SUN is very involved in evolving the Internet to stay away from Microsoft. On the SUN Homepage you can find an interview of Scott McNealy by John Gage where Scott explains that if customers decide to give one product a high market share (Windows) that is not capitalism. SUN is promoting Sun Screen and HotJava with aggressive business ads promising that they will help companies make money. SGI has also been advertising their leadership on the Internet including servers and authoring tools. Their ads are very business focused. They are backing the 3D image standard, VRML, which will allow the Internet to support virtual reality type shopping, gaming, and socializing. Browsing the Web, you find almost no Microsoft file formats. After 10 hours of browsing, I had not seen a single Word .DOC, AVI file, Windows .EXE (other than content viewers), or other Microsoft file format. I did see a great number of Quicktime files. All of the movie studios use them to offer film trailers. Apple benefited by having TCP support before we did and is working hard to build a browser built from OpenDoc components. Apple will push for OpenDoc protocols to be used on the Internet, and is already offering good server configurations. Apple's strength in education gives them a much stronger presence on the Internet than their general market share would suggest. Another popular file format on the Internet is PDF, the short name for Adobe Acrobat files. Even the IRS offers tax forms in PDF format. The limitations of HTML make it impossible to create forms or other documents with rich layout and PDF has become the standard alternative. For now, Acrobat files are really only useful if you print them out, but Adobe is investing heavily in this technology and we may see this change soon. Acrobat and Quicktime are popular on the network because they are cross platform and the readers are free. Once a format gets established it is extremely difficult for another format to come along and even become equally popular. A new competitor "born" on the Internet is Netscape. Their browser is dominant, with 70% usage share, allowing them to determine which network extensions will catch on. They are pursuing a multi-platform strategy where they move the key API into the client to commoditize the underlying operating system. They have attracted a number of public network operators to use their platform to offer information and directory services. We have to match and beat their offerings including working with MCI, newspapers, and other who are considering their products. One scary possibility being discussed by Internet fans is whether they should get together and create something far less expensive than a PC which is powerful enough for Web browsing. This new platform would optimize for the datatypes on the Web. Gordon Bell and others approached Intel on this and decided Intel didn't care about a low cost device so they started suggesting that General Magic or another operating system with a non-Intel chip is the best solution. Next Steps In highlighting the importance of the Internet to our future I don't want to suggest that I am alone in seeing this. There is excellent work going on in many product groups. Over the last year, a number of people have championed embracing TCP/IP, hyperlinking, HTML, and building client, tools and servers that compete on the Internet. However, we still have a lot to do. I want every product plan to try and go overboard on Internet features. One element that will be crucial is coordinating our various activities. The challenge/opportunity of the Internet is a key reason behind the recent organization. Paul Maritz will lead the Platform group to define an integrated strategy that makes it clear that Windows machines are the best choice for the Internet. This will protect and grow our Windows asset. Nathan and Pete will lead the Applications and Content group to figure out how to make money providing applications and content for the Internet. This will protect our Office asset and grow our Office, Consumer, and MSN businesses. The work that was done in the Advanced Technology group will be extremely important as it is integrated in with our products. We must also invest in the Microsoft home page, so it will be clear how to find out about our various products. Today it's quite random what is on the home page and the quality of information is very low. If you look up speeches by me all you find are a few speeches over a year old. I believe the Internet will become our most important promotional vehicle and paying people to include links to our home pages will be a worthwhile way to spend advertising dollars. First we need to make sure that great information is available. One example is the demonstration files (Screencam format) that Lotus includes on all of their products organized by feature. I think a measurable part of our ad budget should focus on the Internet. Any information we create - white papers, data sheets, etc., should all be done on our Internet server. ITG needs to take a hard look at whether we should drop our leasing arrangements for data lines to some countries and simply rely on the Internet. The actions required for the Windows platform are quite broad. Pual Maritz is having an Internet retreat in June which will focus on coordinating these activities. Some critical steps are the following: 1. Server. BSD is working on offering the best Internet server as an integrated package. We need to understand how to make NT boxes the highest performance HTTP servers. Perhaps we should have a project with Compaq or someone else to focus on this. Our initial server will have good performance because it uses kernel level code to blast out a file. We need a clear story on whether a high volume Web site can use NT or not becaues SUN is viewed as the primary choice. Our plans for security need to be strengthened. Other Backoffice pieces like SMS and SQL server also need to stay out in front in working with the Internet. We need to figure out how OFS can help perhaps by allowing pages to be stored as objects and having properties added. Perhaps OFS can help with the challenge of maintaining Web structures. We need to establish distributed OLE as the protocol for Internet programming. Our server offerings need to beat what Netscape is doing including billing and security support. There will be substantial demand for high performance transaction servers. We need to make the media server work across the Internet as soon as we can as new protocols are established. A major opportunity/challenge is directory. If the features required for Internet directory are not in Cairo or easily addable without a major release we will miss the window to become the world standard in directory with serious consequences. Lotus, Novell, and AT&T will be working together to try and establish the Internet directory. Actually getting the content for our directory and popularizing it could be done in the MSN group. 2. Client. First we need to offer a decent client (O'Hare) that exploits Windows 95 shortcuts. However this alone won't get people to switch away from Netscape. We need to figure out how to integrate Blackbird, and help browsing into our Internet client. We have made the decision to provide Blackbird capabilities openly rather than tie them to MSN. However, the process of getting the size, speed, and integration good enough for the market needs works and coordination. We need to figure out additional features that will allows us to get ahead with Windows customers. We need to move all of our Internet value added from the Plus pack into Windows 95 itself as soon as we possible can with a major goal to get OEMs shipping our browser preinstalled. This follows directly from the plan to integrate the MSN and Internet clients. Another place for integration is to eliminate today's Help and replace it with the format our browser accepts including exploiting our unique extensions so there is another reason to use our browser. We need to determine how many browsers we promote. Today we have O'Hare, Blackbird, SPAM MediaView, Word, PowerPoint, Symettry, Help and many others. Without unification we will lose to Netscape/HotJava. Over time the shell and the browser will converge and support hierarchical/list/query viewing as well as document with links viewing. The former is the structured approach and the later allows for richer presentation. We need to establish OLE protocols as the way rich documents are shared on the Internet. I am sure the OpenDoc consortium will try and block this. 3. File sharing/Window sharing/Multi-user. We need to give away client code that encourages Windows specific protocols to be used across the Internet. It should be very easy to set up a server for file sharing across the Internet. Our PictureTel screen sharing client allowing Window sharing should work easily across the Internet. We should also consider whether to do something with the Citrix code that allows you to become a Windows NT user across the Network. It is different from the PictureTel approach because it isn't peer to peer. Instead it allows you to be a remote user on a shared NT system. By giving away the client code to support all of these scenarios, we can start to show that a Windows machine on the Internet is more valuable than an artitrary machine on the net. We have immense leverage because our Client and Server API story is very strong. Using VB or VC to write Internet applications which have their UI remoted is a very powerful advantage for NT servers. 4. Forms/Languages. We need to make it very easy to design a form that presents itself as an HTML page. Today the Common Gateway Interface (CGI) is used on Web servers to give forms 'behavior' but its quite difficult to work with. BSD is defining a somewhat better approach they call BGI. However we need to integrate all of this with our Forms3 strategy and our languages. If we make it easy to associate controls with fields then we get leverage out of all of the work we are doing on data binding controls. Efforts like Frontier software's work and SUN's Java are a major challenge to us. We need to figure out when it makes sense to download control code to the client including a security approach to avoid this being a virus hole. 5. Search engines. This is related to the client/server strategies. Verity has done good work with Notes, Netscape, AT&T and many others to get them to adopt their scalable technology that can deal with large text databases with very large numbers of queries against them. We need to come up with a strategy to bring together Office, Mediaview, Help, Cairo, and MSN. Access and Fox do not support text indexing as part of their queries today which is a major hole. Only when we have an integrated strategy will we be able to determine if our in-house efforts are adequate or to what degree we need to work with outside companies like Verity. 6. Formats. We need to make sure we output information from all of our products in both vanilla HTML form and in the extended forms that we promote. For example, any database reports should be navigable as hypertext documents. We need to decide how we are going to compete with Acrobat and Quicktime since right now we aren't challenging them. It may be worth investing in optimizing our file formats for these scenarios. What is our competitor to Acrobat? It was supposed to be a coordination of extended metafiles and Word but these plans are inadequate. The format issue spans the Platform and Applications groups. 7. Tools. Our disparate tools efforts need to be brought together. Everything needs to focus on a single integrated development environment that is extensible in a object oriented fashion. Tools should be architected as extensions to this framework. This means one common approach to repository/projects/source control. It means one approach to forms design. The environment has to support sophisticated viewing options like timelines and the advanced features SoftImage requires. Our work has been separated by independent focus on on-line versus CD-ROM and structured display versus animated displays. There are difficult technical issues to resolve. If we start by looking at the runtime piece (browser) I think this will guide us towards the right solution with the tools. The actions required for the Applications and Content group are also quite broad. Some critical steps are the following: 1. Office. Allowing for collaboration across the Internet and allowing people to publish in our file formats for both Mac and Windows with free readers is very important. This won't happen without specific evangelization. DAD has written some good documents about Internet features. Word could lose out to focused Internet tools if it doesn't become faster and more WYSIWYG for HTML. There is a critical strategy issue of whether Word as a container is strict superset of our DataDoc containers allowing our Forms strategy to embrace Word fully. 2. MSN. The merger of the On-line business and Internet business creates a major challenge for MSN. It can't just be the place to find Microsoft information on the Internet. It has to have scale and reputation that it is the best way to take advantage of the Internet because of the value added. A lot of the content we have been attracting to MSN will be available in equal or better form on the Internet so we need to consider focusing on areas where we can provide something that will go beyond what the Internet will offer over the next few years. Our plan to promote Blackbird broadly takes away one element that would have been unique to MSN. We need to strengthen the relationship between MSN and Exchange/Cairo for mail, security and directory. We need to determine a set of services that MSN leads in - money transfer, directory, and search engines. Our high-end server offerings may require a specific relationship with MSN. 3. Consumer. Consumer has done a lot of thinking about the use of on-line for its various titles. On-line is great for annuity revenue and eliminating the problems of limited shelf-space. However, it also lowers the barriers to entry and allows for an immense amount of free information. Unfortunately today an MSN user has to download a huge browser for every CD title making it more of a demo capability than something a lot of people will adopt. The Internet will assure a large audience for a broad range of titles. However the challenge of becoming a leader in any subject area in terms of quality, depth, and price will be far more brutal than today's CD market. For each category we are in we will have to decide if we can be #1 or #2 in that category or get out. A number of competitors will have natural advantages because of their non-electronic activities. 4. Broadband media applications. With the significant time before widescale iTV deployment we need to look hard at which applications can be delivered in an ISDN/Internet environment or in a Satellite PC environment. We need a strategy for big areas like directory, news, and shopping. We need to decide how to persue local information. The Cityscape project has a lot of promise but only with the right partners. 5. Electronic commerce. Key elements of electronic commerce including security and billing need to be integrated into our platform strategy. On-line allows us to take a new approach that should allow us to compete with Intuit and others. We need to think creatively about how to use the Internet/on-line world to enhance Money. Perhaps our Automatic teller machine project should be revived. Perhaps it makes sense to do a tax business that only operates on on-line. Perhaps we can establish the lowest cost way for people to do electronic bill paying. Perhaps we can team up with Quickbook competitors to provide integrated on-line offerings. Intuit has made a lot of progress in overseas markets during the last six months. All the financial institutions will find it very easy to buy the best Internet technology tools from us and others and get into this world without much technical expertise. The Future We enter this new era with some considerable strengths. Among them are our people and the broad acceptance of Windows and Office. I believe the work that has been done in Consumer, Cairo, Advanced Technology, MSN, and Research position us very well to lead. Our opportunity to take advantage of these investments is coming faster than I would have predicted. The electronic world requires all of the directory, security, linguistic and other technologies we have worked on. It requires us to do even more in these ares than we planning to. There will be a lot of uncertainty as we first embrace the Internet and then extend it. Since the Internet is changing so rapidly we will have to revise our strategies from time to time and have better inter-group communication than ever before. Our products will not be the only things changing. The way we distribute information and software as well as the way we communicate with and support customers will be changing. We have an opportunity to do a lot more with our resources. Information will be disseminated efficiently between us and our customers with less chance that the press miscommunicates our plans. Customers will come to our "home page" in unbelievable numbers and find out everything we want them to know. The next few years are going to be very exciting as we tackle these challenges are opportunities. The Internet is a tidal wave. It changes the rules. It is an incredible opportunity as well as incredible challenge I am looking forward to your input on how we can improve our strategy to continue our track record of incredible success. HyperLink Appendix Related reading, double click to open them On-line! (Microsoft LAN only, Internet Assistant is not required for this part): * "Gordon Bell on the Internet" email by Gordon Bell * "Affordable Computing: advertising subsidized hardware" by Nicholas Negroponie * "Brief Lecture Notes on VRML & Hot Java" email by William Barr * "Notes from a Lecture by Mark Andresson (Netscape)" email by William Barr * "Application Strategies for the World Wide Web" by Peter Pathe (Contains many more links!) Below is a hotlist of Internet Web sites you might find interesting. I've included it as an embedded .HTM file which should be readable by most Web Browsers. Double click it if you're using a Web Browser like O'Hare or Netscape. HotList.htm A second copy of these links is below as Word HTML links. To use these links, you must be running the World Internet Assistant, and be connected to the Web. Cool, Cool, Cool.. The Lycos Home Page Yahoo RealAudio Homepage HotWired - New Thinking for a New Medium Competitors Microsoft Corporation World-Wide-Web Server Welcome To Oracle Lotus on the Web Novell Inc. World Wide Web Home Page Symantec Corporation Home Page Borland Online Disney/Buena Vista Paramount Pictures Adobe Systems Incorporated Home Page MCI Sony Online Sports ESPNET SportsZone The Gate Cybersports Page The Sports Server Las Vegas Sports Page News CRAYON Mercury Center Home Page Travel/Entertainment ADDICTED TO NOISE CDnow The Internet Music Store Travel & Entertainment Network home page Virtual Tourist World Map C(?) Net Auto Dealernet Popular Mechanics

Welcome to the History of Computing Podcast, where we explore the history of information technology. Because understanding the past prepares us for the innovations of the future! Todays episode is on the History of chip-maker Broadcom. This is actually two stories. The first starts with a movement called fabless semiconductors. LSI had been part of Control Data Corporation and spun off to make chips. Kickstarted by LSI in the late sixties and early seventies, fabless companies started popping up. These would have what are known as foundries make their chips. The foundries didn’t compete with the organizations they were making chips for. This allowed the chip designers to patent, design, and sell chips without having to wield large manufacturing operations. Such was the state of the semiconductor industry when Henry Nicholas met Dr Henry Samueli while working at TRW in the 1980s. Samueli had picked up an interest in electronics early on, while building an AM/FM radio in school. By the 80s he was a professor at UCLA and teamed up with Nicholas, who was a student as well, to form Broadcom in 1991. They began designing integrated circuit (also referred to as a microchip). These are electronic circuits on a small flat piece (or "chip") of semiconductor material, usually silicon. Jack Kilby and Robert Noyce had been pioneers in the field in the late 50s and early 60s and by the 80s, there were lots and lots of little transistors in there and people like our two Henry’s were fascinated with how to shove as many transistors into as small a chip as possible. So the two decided to leave academia and go for it. They founded Broadcom Corporation, Henry Nicholas’ wife made them a logo and they started selling their chips. They made chips for power management, memory controllers, control units, and early mobile devices. But most importantly, they made chips for wi-fi. Today, their chips provide the chips for most every Apple device sold. They also make chips for use in network switches, are responsible for the raspberry pi and more. Samueli holds over 70 patents on his own, although in-all Broadcom has over 20,000, many in mobile, internet of things, and data center! By 1998 sales were good and Broadcom went public. In 2000, UCLA renamed the school of engineering to the Henry Samueli School of Engineering. Nicholas retired from Broadcom in 2003, Samueli bought the Anaheim Ducks in 2005. They continued to grow, make chips, and by 2009 they hit the Fortune 500 list. They were purchased by Avago Technologies in 2016. Samueli became the Chief Technology officer of the new combined company. Wait, who’s Avago?!?! Avago started in 1961 as the semiconductor division of Hewlett-Packard. In the 60s they were pioneers in using LEDs in displays. They moved into fiber in the 70s and semiconductors by the 90s, giving the world the optical mouse and cable modems along the way. They spun out of HP in 99 as part of Agilent and then were acquired from there to become Avago in 2005, naming Hock Tan as CEO. The numbers were staggering. Not only did they ship over a billion optical mouse chips, but they also pushed the boudoirs of radio frequency chips, enabling industries like ATMs and cash registers but also gave us IR on computers as a common pre-bluetooth way of wirelessly connecting peripherals. They were also key in innovations giving us wifi+bluetooth+fm combo chips for phones, pushing past the 100Gbps transfer speeds for optical and doing innovative work with touch screens. Their 20,000 patents combined with the Broadcom patents give them over 40,000 patents in just those companies. They went public in 2009 and got pretty good at increasing revenue and margins concurrently. By 2016 they went out and purchased Broadcom for $37 Billion. They helped Broadcom diversify the business and kept the name. They bought Brocade for $5.9B in 2017 and CA for $18.9 billion in 2018. Buying Symantec in 2019 bumps the revenue of Broadcom up from $2.5 billion to 24.6 billion and EBITDA margins from 33 percent to 56 percent. The aggressive acquisitions caught the eyes of Donald Trump who shut down a $117 billion dollar attempted takeover of Qualcomm, a rival of both the old Broadcom and the new Broadcom. Broadcom makes the Trident+ chips, the network interface controllers used in Dell PowerEdge blade servers, the systems on a chip used in the raspberry pi, the wifi chipsets used in the Nexus, the wifi + bluethooth chips used in every iPhone since the iPhone 3GS, the Jericho chip, the tomahawk chip. They employ some of the best chip designers of the day, including Sophie Wilson who designed the instruction set for an early RISC processor and designed the ARM chip in the 80s when she was at Acorn. Ultimately cash is cheap these days. Broadcom CEO Hock Tan has proven he can raise and deploy capital quickly. Mostly building on past successes in go-to-market infrastructure. But, if you remember from our previous episode on the history of Symantec, that’s exactly what Symantec had been doing when they became a portfolio company! But here’s the thing. If you acquire companies and your EBITDA drops, you’re stuck. You have to increase revenues and reduce EBITDA. If you can do that in Mergers and Acquisitions, investors are likely to allow you to build as big a company as you want! With or without a unified strategy. But the recent woes of GE should be a warning. As you grow, you have to retool your approach. Otherwise, the layers upon layers of management begin to eat away at those profits. But you dig too far into that and quality suffers, as Symantec learned with their merger and then demerger with Veritas. Think about this. CA is strong in Identity and Access Management, with 1,500 patents. Symantec is strong in endpoint, web, and DLP security, with 3,600 patents. Brocade has over 900 in switching and fiber in the data center. The full device trust and reporting could, if done properly go from the user to the agent on a device to the data center and then down to the chip in a full zero trust model. Or Broadcom could just be a holding company, sitting on around 50,000 patents and eeking out profit where they can. Only time will tell. But the lesson to learn from the history of both of these companies is that if you’re innovating, increasing revenues and reducing EBITDA, you too can have tens of billions of dollars, because you’ve proven to be a great investment.