January 2010 (18.01) issue
By Daniel Roth
Just after midnight on August 24, 1995, a student named Jonathan Prentice walked into a bookshop in Auckland, New Zealand, pulled out 200 New Zealand dollars, and became the first owner of Windows 95. Turning to a reporter, Prentice declared: “I will be able to play solitaire and send faxes at the same time.” And with that rallying cry, the Windows 95 craze exploded. Lines formed around the world as consumers jostled to buy copies; journalists in Poland prepared to take a Microsoft-sponsored submarine ride under the Baltic Sea; The Times of London handed out free papers wrapped in a Windows ad; and the Empire State Building lit up in Windows’ signature colors. Within a month, Microsoft’s new operating system had sales of more than $250 million and Bill Gates went from being a nerd to … well, he was still a nerd, but an invincible rock-star nerd. The future was very clear: PCs — running Microsoft software — would be the single most important device in our lives.
In Silicon Valley, Larry Ellison followed the glowing press coverage and fumed. He had lived in Gates’ shadow since March 1986, when Oracle, Ellison’s database- software company, had gone public just a day before Microsoft. Gates got attention for everything he did, but barely anyone knew Oracle. Windows 95 was the last straw. “There was peace in the Middle East and war in Bosnia the same week,” he later groused. “And all that the major networks seemed to cover was people in parking lots waiting up all night to get their first copy of Windows 95.” His grudge wasn’t just about ego; Microsoft had already begun nosing around the database- software industry, and its mounting war chest meant that it could easily fund a push into Oracle’s territory.
Immediately after the Windows 95 launch, Ellison called one of his lieutenants, Farzad Dibachi, to his mansion in Atherton, California. For years, Dibachi — who was responsible for brainstorming new business strategies — had urged Ellison to think more broadly about his company’s potential. Now, the two discussed a vision for Oracle that would neutralize Microsoft’s main advantage: the dominance of its operating system. They imagined a simple machine that would eschew software installed on a hard drive in favor of accessing applications online. Data — videos, documents, pictures — would be stored in Oracle databases instead of on the computer itself. In place of a robust operating system, this machine would work with programs and files through browsers like Netscape Navigator. Ellison liked the idea, and he and Dibachi started working on a speech so the CEO could share it with the world. The device would be called the network computer.