Steve Jobs MIT 1992 / Steve Jobs talk /Steve Jobs speech /

19921:13:13English

Transcript

Machine transcript in the original language. It may contain errors. Select a timestamp to play that moment.

Good afternoon ladies and gentlemen and welcome to the second
albeit unexpected presentation by the distinguished speaker series this year.
We are honored to have with us today Steve Jobs, the president and chief executive officer
of Next Computer Corporation.
Steve has consistently been one of the computer industry's foremost entrepreneurs.
Along with partner Steve Bodniak, their entrance into the industry was via the traditional
entrepreneur route of building computers in a garage.
Such an inauspicious start, however, saw the creation of Apple, a formidable challenge
to IBM in the personal computer market.
A true visionary, Steve was known at an early age for his belief that a PC could be put
on every desk and made simple enough for use.
Educationally, he had the right credentials to make it big in the computer industry because
he dropped out of Reed College.
As Apple grew, the founders' original interest and the growing corporate culture diverged.
Both eventually left Apple to re-establish their entrepreneurial roots.
1985, Steve founded a new computer company, Nex Corporation,
to design a revolutionary computer called the Cube.
Targeting the hidden workstation market, Nex has found they're going tough
against entreated competitors such as Sun Microsystems.
However, with 1991 revenues hitting $127 million,
business has grown substantially.
With the backing of Ross Perot, Nex shouldn't be short of funds in the future,
or in a more unlikely scenario, a friendly year in the White House.
The current plans for Next Computer involve a public offering,
possibly in the next 14 months.
We hope to hear today just what a good investment that should be.
Steve has consistently been recognized for his contribution
to American largest high-tech industry.
Most recently he was appointed to the President's Export Council last August
with a role to advise on government policies and programs that affect trade performance.
Outside of work, Steve is married to Lorraine, previously an MBA student at Stanford University,
and also a sister of one of our classmates, Brad Powell.
The couple met when Steve gave a similar speech to these afternoons at Stanford,
days before the big area earthquake.
Let's hope the history doesn't repeat itself.
Ladies and gentlemen, we are extremely grateful for Steve
to giving up his time to be with us this afternoon.
Would you please give a warm welcome to our distinguished guest, Steve Jobs.
Thank you.
Hi.
I guess we get to spend an hour or so together today.
and most of the time I wanted to spend just talking about what you want to talk and answering some questions.
But I thought if you wanted I'd take about 10 minutes or 15 minutes up front
and tell you what we're doing next and why the world might need another computer company.
Is that something you guys think about these things?
Okay.
I thought I'd tell you about some of our mistakes.
Maybe that would be more useful.
We have a lot of scar tissue.
There's a really interesting book that was written by a guy named Paul Strassman.
And Paul has one of the more interesting jobs on the planet.
He's this chief information officer, CIO of a very large organization called the Pentagon.
And they really understand software there.
I had a conversation with him not too long ago, and he said the lesson from the Gulf War was that the best software will win the war.
And so they're trying to do a lot of work in the software area.
He wrote a book, though, before he got this job called The Business Value of Computers.
And it's rather thick and it's not good bedtime reading.
But you can plow through it and there's some incredible stuff in it.
And he asked two questions in particular.
One was he surveyed a bunch of companies from not very successful all the way up to really successful.
And there's somebody taking notes here.
And he asked how much they spent on information technology as a percentage of revenues.
And he got a very counterintuitive answer, right?
You'd think that the really successful companies would either spend more or less than the not successful companies,
depending on your theory.
But it was exactly the same.
They all spent about 2% of revenues on information technology.
And he found this curious, and so he asked another question.
How do they spend their money?
And he found out that the really successful ones,
actually let's start with the not so successful ones.
As success increases and dollars increase,
he found out that the not so successful ones
spent the majority of their money on management productivity,
and the more successful ones spent the majority of their money
on operational productivity applications, right?
Now, this was not very pleasant for me to read
because I spent the first 10 years of my life
on management productivity, which was PCs, right?
PCs and Macs never attacked operational productivity.
They just attacked management productivity.
Why is that?
Because you can't go down to your local computer store
and buy an app that will help you do stock trading
or will help you run a hospital or will help you in whatever operational part of your business you want to automate.
Unless you're a very, very small business, then you could run some accounting packages.
But other than that, if you're a medium-sized or large business, these things never attacked operational productivity.
So we zoom out and we say, how have people attacked operational productivity with information technology?
Well, in the 60s, they bought a mainframe and they got some terminals and a bunch of COBOL programmers and they wrote a few apps.
And most of them were kind of backroom apps.
And it sort of worked for the very few that could afford to do this.
In the 70s, they got a mainframe and some terminals and they did the same thing.
And a few of them got a few mini computers and terminals and tried to do it a little cheaper.
In the 80s, nothing changed.
Mainframe and terminals, minis and terminals until maybe about two or three years ago.
What happened two or three years ago was that the front office started to realize that they needed operational apps so bad that they couldn't depend on the MIS folks anymore.
They started taking life into their own hands and working with, sometimes working with the
MIS folks to start downsizing and getting some servers and running some industry standard
databases like Sybase or Oracle in the servers and making a little local area network and
getting maybe some Sun workstations and spending about two years writing some mission critical
operational applications like trading apps for Wall Street, perfect example.
And it kind of worked.
And the reason that they needed to do this was because more and more they were discovering that things like new products required a custom operational application.
An example, if you're in financial services and you come up with a new product, it's only three things.
It's an idea, it's a sales force, and it's a custom app to bang on databases to make the product real,
to do the mortgage swaps or whatever it is you want to do.
Without the app, you don't have a product.
And so there has been an increasing buildup of demand
from the front parts of corporations
to create more and more and more of these operational applications.
And I think it's going to get to the point
where this becomes fairly clear
that this is the next big revolution in desktop computing.
is to attack the operational productivity.
And as we start to re-engineer the way we do things,
to automate a lot of this in custom applications.
Sounds a little strange now to most people.
Sounds like desktop publishing did in 1985.
Nobody knew what it was.
Everybody thought it was kind of a strange vertical thing

Transcript

Machine transcript in the original language. It may contain errors. Select a timestamp to play that moment.

Good afternoon ladies and gentlemen and welcome to the second

albeit unexpected presentation by the distinguished speaker series this year.

We are honored to have with us today Steve Jobs, the president and chief executive officer

of Next Computer Corporation.

Steve has consistently been one of the computer industry's foremost entrepreneurs.

Along with partner Steve Bodniak, their entrance into the industry was via the traditional

entrepreneur route of building computers in a garage.

Such an inauspicious start, however, saw the creation of Apple, a formidable challenge

to IBM in the personal computer market.

A true visionary, Steve was known at an early age for his belief that a PC could be put

on every desk and made simple enough for use.

Educationally, he had the right credentials to make it big in the computer industry because

he dropped out of Reed College.

As Apple grew, the founders' original interest and the growing corporate culture diverged.

Both eventually left Apple to re-establish their entrepreneurial roots.

1985, Steve founded a new computer company, Nex Corporation,

to design a revolutionary computer called the Cube.

Targeting the hidden workstation market, Nex has found they're going tough

against entreated competitors such as Sun Microsystems.

However, with 1991 revenues hitting $127 million,

business has grown substantially.

With the backing of Ross Perot, Nex shouldn't be short of funds in the future,

or in a more unlikely scenario, a friendly year in the White House.

The current plans for Next Computer involve a public offering,

possibly in the next 14 months.

We hope to hear today just what a good investment that should be.

Steve has consistently been recognized for his contribution

to American largest high-tech industry.

Most recently he was appointed to the President's Export Council last August

with a role to advise on government policies and programs that affect trade performance.

Outside of work, Steve is married to Lorraine, previously an MBA student at Stanford University,

and also a sister of one of our classmates, Brad Powell.

The couple met when Steve gave a similar speech to these afternoons at Stanford,

days before the big area earthquake.

Let's hope the history doesn't repeat itself.

Ladies and gentlemen, we are extremely grateful for Steve

to giving up his time to be with us this afternoon.

Would you please give a warm welcome to our distinguished guest, Steve Jobs.

Thank you.

Hi.

I guess we get to spend an hour or so together today.

and most of the time I wanted to spend just talking about what you want to talk and answering some questions.

But I thought if you wanted I'd take about 10 minutes or 15 minutes up front

and tell you what we're doing next and why the world might need another computer company.

Is that something you guys think about these things?

Okay.

I thought I'd tell you about some of our mistakes.

Maybe that would be more useful.

We have a lot of scar tissue.

There's a really interesting book that was written by a guy named Paul Strassman.

And Paul has one of the more interesting jobs on the planet.

He's this chief information officer, CIO of a very large organization called the Pentagon.

And they really understand software there.

I had a conversation with him not too long ago, and he said the lesson from the Gulf War was that the best software will win the war.

And so they're trying to do a lot of work in the software area.

He wrote a book, though, before he got this job called The Business Value of Computers.

And it's rather thick and it's not good bedtime reading.

But you can plow through it and there's some incredible stuff in it.

And he asked two questions in particular.

One was he surveyed a bunch of companies from not very successful all the way up to really successful.

And there's somebody taking notes here.

And he asked how much they spent on information technology as a percentage of revenues.

And he got a very counterintuitive answer, right?

You'd think that the really successful companies would either spend more or less than the not successful companies,

depending on your theory.

But it was exactly the same.

They all spent about 2% of revenues on information technology.

And he found this curious, and so he asked another question.

How do they spend their money?

And he found out that the really successful ones,

actually let's start with the not so successful ones.

As success increases and dollars increase,

he found out that the not so successful ones

spent the majority of their money on management productivity,

and the more successful ones spent the majority of their money

on operational productivity applications, right?

Now, this was not very pleasant for me to read

because I spent the first 10 years of my life

on management productivity, which was PCs, right?

PCs and Macs never attacked operational productivity.

They just attacked management productivity.

Why is that?

Because you can't go down to your local computer store

and buy an app that will help you do stock trading

or will help you run a hospital or will help you in whatever operational part of your business you want to automate.

Unless you're a very, very small business, then you could run some accounting packages.

But other than that, if you're a medium-sized or large business, these things never attacked operational productivity.

So we zoom out and we say, how have people attacked operational productivity with information technology?

Well, in the 60s, they bought a mainframe and they got some terminals and a bunch of COBOL programmers and they wrote a few apps.

And most of them were kind of backroom apps.

And it sort of worked for the very few that could afford to do this.

In the 70s, they got a mainframe and some terminals and they did the same thing.

And a few of them got a few mini computers and terminals and tried to do it a little cheaper.

In the 80s, nothing changed.

Mainframe and terminals, minis and terminals until maybe about two or three years ago.

What happened two or three years ago was that the front office started to realize that they needed operational apps so bad that they couldn't depend on the MIS folks anymore.

They started taking life into their own hands and working with, sometimes working with the

MIS folks to start downsizing and getting some servers and running some industry standard

databases like Sybase or Oracle in the servers and making a little local area network and

getting maybe some Sun workstations and spending about two years writing some mission critical

operational applications like trading apps for Wall Street, perfect example.

And it kind of worked.

And the reason that they needed to do this was because more and more they were discovering that things like new products required a custom operational application.

An example, if you're in financial services and you come up with a new product, it's only three things.

It's an idea, it's a sales force, and it's a custom app to bang on databases to make the product real,

to do the mortgage swaps or whatever it is you want to do.

Without the app, you don't have a product.

And so there has been an increasing buildup of demand

from the front parts of corporations

to create more and more and more of these operational applications.

And I think it's going to get to the point

where this becomes fairly clear

that this is the next big revolution in desktop computing.

is to attack the operational productivity.

And as we start to re-engineer the way we do things,

to automate a lot of this in custom applications.

Sounds a little strange now to most people.

Sounds like desktop publishing did in 1985.

Nobody knew what it was.

Everybody thought it was kind of a strange vertical thing