BeOS and the Mac clone future

How would you characterize your negotiations with Be to license its operating system alongside the Mac OS on your clones?
Initially, I was somewhat skeptical that somebody could come in and write a new operating system. But I am really impressed with Jean-Louis [Gassée, Be founder and chairman] and his team. I am not brave enough to take that kind of big challenge. What we are doing is much less challenging than what he is doing, but I think he has superior technology.

What makes his technology superior?
Technology has changed. People are using computers differently now. Nowadays, multimedia and Web content authoring is very popular, much more than doing word processing or spreadsheets. When Windows 95 or other operating systems were written, they were based on the old environment. So, Be came in and basically did a technology leapfrog to address the changes.

What were the key considerations in doing the Be deal?
I've known Jean-Louis for some time. He and I are good friends. Basically I told him there was one thing I needed from him and it was the most important thing. I had to make sure I had access to [Be's] technology for quite a long time, no matter what happens. He basically told me he was going to check with his board members. Two days later he said yes.

[Editors Note: Apple had earlier been in negotiations to acquire Be for its operating software, but talks broke down over price.]

What do you think of the Apple-Be negotiations?
I believed that Be and Apple needed each other and I had high hopes that those two companies would come to terms. In my contract with Be, I made sure that our deal would not interfere with Apple's deal with Be.

Industry analysts have predicted that clone makers will represent about ten percent of the Macintosh-desktop market. What do you think of that figure?
I think ten percent is a very do-able target in 1997. In fact, it may be larger than ten percent. Apple's management has said they think the compatibles market can go up to 25 percent of the market. I think those numbers are do-able, but it's difficult to say right now when that will be.

How are you faring against the other clone makers such as Umax and Motorola?
They came into the market later than us and are making some progress, but we are still shipping more products than all the other licensees combined at this time. We were a little shy of shipping 100,000 units in our first year, but we exceeded our revenue goal and have been profitable from almost the first full quarter of operation.

Who do you consider your competition--the clone makers or the PC makers that also sell through a direct channel like Power Computing?
We are not really competing with the clone makers, in some sense, because they use a different channel. They're using the traditional two-tier retail channel, where we're focusing our effort on a direct channel.

Looking at all your life experiences, what were some of the key things that helped shape and affect the way you run your business today?
IBM gave me the basic training in technology and some management training in terms of structure and organizational skills. After IBM, I came to Silicon Valley and got involved in a few start-up companies. I learned a lot about starting a company and the entrepreneurial spirit. I also was a consultant to lots of companies in the earlier days, especially Korean companies like Samsung and Goldstar. I was fortunate enough to be an advisor to the high levels of management, even up to the chairman's level. I learned their way of doing business--how they negotiate the deals, their strategies. As consultant you teach a lot, but you also learn a lot from the other people too.