Cyberspace
There was no particular reason why it took two guys at the University of Illinois to do it, any more than it should have taken two guys in Sunnyvale to do the Apple I. It’s just that sometimes the establishment needs a kick in the pants.
–Marc Andreessen, cofounder of Netscape
In 1994, Microsoft was riding high and Bill Gates was a billionaire. But that didn’t mean he wasn’t still driven by fear.
No matter that he was the richest person in America, viewed by most people as the symbol, and possibly the inventor, of the personal-computer revolution. Nor did it matter that he was the founder and leader of the company whose products dominated most of the industry. Gates truly believed that he and Microsoft held their position only by virtue of constant vigilance, aggressive competition, and tirelessly applied intelligence. He was convinced that some bright young hacker somewhere could knock out a few thousand lines of clever code in a couple of months that would change the rules of the game, marginalizing Microsoft overnight.
Gates knew about these hackers because he had been one. He had known the thrill of proving your mettle by outsmarting a giant corporation. Now he was on the other side, and somewhere out there he could picture the bright young hacker who would one day succeed in outsmarting him.
Microsoft’s Muscle
Microsoft continued to push into new areas. When the OS/2 deal fell apart, an operating-system project that had been quietly in development since 1988 was pulled to center stage, given serious funding, and dubbed “Windows NT.” NT would be sold into “corporate mission-critical environments”—chiefly the server market, which was then dominated by the venerable Unix operating system.
Server computers provided resources to—or “served”—computers connected to them on a network. File servers were like libraries, holding shared files; application servers held application programs used by many machines; mail servers managed electronic mail for offices. Servers were increasingly being used in business and academia, tended to be more expensive than individual users’ computers, and, because many users depended on them, were typically maintained by technically sophisticated personnel. And they typically ran the Unix operating system.
Unix came on the scene in 1969. Invented by two Bell Labs programmers, Ken Thompson and Dennis Ritchie, it was the first easily portable operating system, meaning that it could be run on many different types of computers without too many modifications. As Unix was stable, powerful, and widely distributed, it quickly became the operating system of choice in academia, with two results: lots of people wrote utility programs for it, which they distributed free of charge, and virtually all graduating computer scientists knew Unix inside and out. On the job, they typically had control of a server, and on it they preferred to run the familiar Unix, with its large, loose collection of utility programs.
Microsoft hoped to supplant Unix and take over the server market.
In addition to its NT project, Microsoft continued to exert a powerful influence over its MS-DOS and Windows OEMs. The control extended to dictating what icons representing third-party programs could appear on the user’s desktop when the computer first started up.
In 1994, Compaq, by then the leading personal-computer maker, decided to install a program on all its machines that would run “in front of” Microsoft Windows. This small “shell” program would display icons that let the user start selected programs. Although this shell program was very simple and wouldn’t supplant Windows, it would have undermined the gatekeeper role that Windows was coming to play, and thus undermined Windows’s control of the user’s desktop.
“We’ve got to stop this,” Gates said.
And he did. What was said, what was intimated, may never be known, but Compaq removed the program.
Compaq also backed down two years later, when Microsoft threatened to stop selling it Windows unless Compaq included Microsoft’s Internet browser on its machines.
Microsoft had become a powerhouse and Bill Gates was not reluctant to use that power.
The Internet Threat
In the 1980s, online systems had become a big thing. These were an outgrowth of the early computer bulletin-board systems (which offer a public area for posting messages to other users, much like a typical “corkboard” bulletin board found in an office), or BBSs. BBSs provided content, such as news services, discussion groups, stock quotes, and electronic mail, to their subscribers. CompuServe, Prodigy, America Online, and others maintained their own proprietary systems, which users could access with a local phone call.
When the Internet blossomed in popularity with the invention of the World Wide Web in 1994, the online systems began having trouble justifying their existence independent of the Internet, and all began offering Internet access. The sudden popularity of the Internet and the World Wide Web began changing the whole nature of computing, shifting the emphasis away from the operating system and the individual desktop to the network.
Every company struggled to forge an Internet strategy. New companies emerged to take advantage of this shift in the market. Amazon and others exploited radical new forms of electronic commerce. Cisco Systems provided the networking infrastructure for this new market.
Microsoft responded promptly, trying several approaches to carve out its profits from the phenomenon, and just as promptly cutting these attempts short when the market moved in a different direction. The company hadn’t settled on an Internet strategy, but it responded quickly to the rapidly changing landscape, more easily than most large companies could.
Perhaps it was because of the structure Gates installed when Hallman left.
In 1992, Gates set up an organizational arrangement that he could live with: the Office of the President. It was also known as BOOP—Bill and the Office of the President. It consisted of Bill and three close friends: Steve Ballmer, Mike Maples, and Frank Gaudette. By this time these friends had been influenced by Gates, and had arguably influenced him to the extent that he could trust them to make decisions he’d approve of.
He had succeeded in spreading himself thinner.
For so large a company as Microsoft to be able to change directions so quickly was impressive. The biggest fish in the pond and maneuverable, too: Microsoft in the mid-1990s dominated the personal-computer industry and seemed utterly invincible.
Until that bright young hacker came along.
Creating Cyberspace
One of the places where Tim Berners-Lee’s achievement in creating the Web was fully appreciated was at the National Center for Supercomputing Applications (NCSA) at the University of Illinois’s Urbana-Champaign campus. NCSA had a large budget, a lot of hot technology, and a large staff with “frankly, not enough to do,” according to one of the young programmers privileged to work there.
Even at $6.85 an hour, Marc Andreessen saw it as a privilege to work at NCSA. He was a sharp undergraduate programmer who loved being in an environment where he could talk about Unix code. Andreessen looked at what Berners-Lee had done and saw the potential of the Web, but he also saw that potential being restricted to a few academics, accessed on expensive hardware through archaic, arcane software. The opportunity to open up the Web to everyone looked to him like “a giant hole in the middle of the world.”
Riding in friend Eric Bina’s car one night late in 1992, Andreessen put the challenge to Bina: “Let’s go for it,” he said. Let’s fill that hole.
Figure 92. Marc Andreessen After cocreating the first visual web browser while a student at the University of Illinois, Andreessen cofounded Netscape.
(Courtesy of Netscape Communications Corp.)
They coded like mad. Between January and March of 1993, they wrote a 9,000-line program called Mosaic. It was a web browser, but not like Berners-Lee’s. Mosaic was a browser for the GUI generation, a web browser for everyone. It displayed graphics, it let you use a mouse and click on buttons to do things—no, to go places. Mosaic completed the process of turning abstract connection into place; using Mosaic, one had a compelling sense of going from one location to another in some sort of space. Some called it cyberspace.
This was exactly what Bill Gates had feared: some bright young hacker—well, two—had knocked out a few thousand lines of clever code in a couple of months that would change the rules of the game forever, putting the biggest software company in the world on the defensive, and threatening everything Gates had built.
Andreessen and Bina released Mosaic on the Internet. They signed on other NCSA kids to port Mosaic from the Unix operating system to other platforms, and released those on the Internet, too. Millions of people downloaded it. No piece of software had ever got into so many hands so quickly.
This thing let you travel the planet, virtually. It was amazing. It let you read about Shakespeare on a computer in a New York library, click once to zip across the ocean to England to look at a picture of the Globe Theater, click again to return to the stacks to read Hamlet—except that they’re different stacks. This copy of Hamlet happens to be on a website in Uzbekistan. Doesn’t matter; terrestrial geography isn’t relevant in cyberspace. You can browse a world of information without leaving your chair. None of this could happen until people had created the websites, but this took place in tandem with the spread of Mosaic. Everyone who tried it “got it”; Mosaic was a hit and Andreessen was a hero.
In December 1993, Andreessen graduated from college, wondering what to do for an encore. Gravitating to Silicon Valley, he met Jim Clark, founder of Silicon Graphics. Clark was impressed by Mosaic and by Andreessen’s grasp of the potential of the Web. By April 1994, the two had founded a company, first called Electric Media, then Mosaic Communications, and finally Netscape Communications. They were going to produce software in support of this new thing, this World Wide Web.
The Browser Boom
They were not alone. By midyear there were dozens of web browsers: some free, some commercial; some available for Windows and the Macintosh and Unix, some platform-specific; some stripped-down, some festooned with bells and whistles. In addition to Mosaic, there were MacWeb, WinWeb, Internetworks, SlipKnot, Cello, NetCruiser, Lynx, Air Mosaic, GWHIS, WinTapestry, WebExplorer, and others.
Personal web pages became a fad. So did new uses of the Web, such as ordering pizza. Webcams were another fad—digital cameras feeding a continuous stream of pictures to a website. You could visit a website and watch coffee perk at MIT, check the commute traffic on Highway 17 coming up from the Santa Cruz beaches into Silicon Valley, or monitor the waves along the California coast. Steve Wozniak set up a Wozcam so friends could watch him work. The Web was a wave and Clark and Andreessen were riding it.
They hired Eric Bina and other NCSA kids from Mosaic, wrote a new browser from scratch, and made it as bulletproof and nifty as they knew how. By October 1994, they had a beta version out on the Internet. By December, they were shipping the release version of Netscape Navigator, along with other web software products. By the end of 1996, 45 million copies of Navigator were in people’s hands. The company was growing at a delirious rate, and Clark brought in industry veteran Jim Barksdale, who was widely respected for his management of McCaw Cellular Communications, as president.
Netscape was perceived in the industry, and on Wall Street, as a hot property. One admirer was Steve Case of America Online (AOL), the premier online service. He offered to put up money for Netscape’s first round of financing, but Clark turned him down, concerned that AOL’s involvement might put off potential customers who considered AOL to be competition. On August 9, 1995, Netscape filed its IPO of five million shares at $28 each. Its stock doubled by the end of the day, and Netscape was suddenly worth billions.
That year, Microsoft responded.
In May 1995, Gates had already described the Internet to his staff as “the most important single development to come along since the IBM PC in 1981.” In December, he announced publicly that the Internet would be pervasive in all that Microsoft did. Netscape’s stock dropped 17 percent and never recovered. Microsoft was going to enter the browser market. It did, rapidly and impressively, licensing some browser technology and developing its own browser, Internet Explorer, to compete with Netscape’s browser. The company launched by the young coder and the industry veteran was, in Gates’s opinion, a threat to Microsoft’s existence, and it needed to be snuffed out.
Gates was not alone in seeing the Internet as a threat to Microsoft’s dominance in the PC market. Bob Metcalfe, the networking guru who had developed the Ethernet protocol, wrote a weekly column for the industry magazine InfoWorld. In February 1995, he predicted that the browser would in effect become the dominant operating system for the next era. The dominant operating system for the current era was, of course, Microsoft’s Windows. Metcalfe was predicting that Windows’s dominance was on the verge of ending.
How, exactly, could a browser replace an operating system? Partly by providing the same capabilities; Netscape Navigator could launch application programs, display directories of files, and do most of the things an operating system did. Partly by making the choice of operating system invisible and irrelevant—Navigator ran on Macs and PCs and workstations and looked and acted the same on all of them—and partly by moving the center of the computing universe. Sun Microsystems had a slogan, “the network is the computer.” With Navigator, it didn’t matter if an application program or a data file was on your hard disk, on a server in the next office, or on a computer in another country. It didn’t matter what computer—Mac, PC, or Amiga—it was on; it just mattered whether you could get to it with your browser.
If the network was the computer, the browser was the operating system, and single-computer-based operating systems were irrelevant. Gates wasn’t going to let Windows become irrelevant.
Over the next few years, Microsoft, Netscape, and other companies whose interests intersected at the Internet crossroads performed a complex dance. Mostly it was Microsoft against everybody else, but there were complications.
Browser Wars
One of the most significant of those other companies was Sun Microsystems.
AOL was continuing a courtship with Netscape and a battle with Microsoft.
When Jim Clark rebuffed AOL’s offer to buy into Netscape, AOL purchased a browser from another source—grabbing the other browser just before Microsoft could—but Steve Case was still interested in both Netscape and its browser. The browser was regarded as the best available, and the company was a hot property. But there was another reason for his interest in Netscape: most AOL executives viewed Netscape’s team as people they could relate to. At AOL, Netscape was viewed as a natural ally in the war against Microsoft.
Microsoft had been steadily moving into AOL’s territory, online systems, for years. Although AOL was enabling people to get on the Internet with its web browser, its business was primarily as an online service. Since the 1980s, online services provided Internet connections, hosted electronic discussion groups, and provided email services. All these were also available on the Internet, but online services were a lot easier to work with—and familiar. Microsoft had entered this market with its Microsoft Network, MSN. AOL was still the unchallenged leader of the online companies, but it was worried.
The future of online companies was becoming cloudy as browsers made the Internet easier to navigate. That was why AOL needed a browser and why it was interested in Netscape, and it was why Microsoft was willing to undercut its own MSN in order to beat Netscape.
In 1995, Microsoft committed itself publicly to the Internet. What that meant was soon evident. After licensing browser technology from a small company and then developing its own browser, Internet Explorer, Microsoft approached AOL. Getting AOL’s browser replaced by Microsoft’s would be a huge blow to the stellar public image of Netscape. By this time, AOL had millions of subscribers; if every one of them began using Microsoft’s browser, Netscape would be well on its way to second place behind Microsoft in the browser wars.
To get its browser on AOL subscribers’ screens, Microsoft was willing to make a very sweet deal. In exchange for AOL’s licensing Internet Explorer, Microsoft would put an icon for AOL on the Windows desktop. This amounted to free advertising and an endorsement from Microsoft on every Windows user’s computer screen each time the user started up the machine. This was a major sellout of Microsoft’s own online service, MSN, but that didn’t matter. What mattered to Microsoft was crushing Netscape. And the price made the sweet deal even harder for AOL to turn down—AOL could have the browser for free.
Incredibly, AOL still considered turning down the offer. Microsoft was the enemy. In the end, AOL cut deals with both Netscape and Microsoft, but Microsoft’s browser was promoted as the preferred browser. Netscape got the short end of the stick.
During the negotiations with Netscape, Case emphasized the importance of Netscape’s website. This was an immensely popular area on the Web, and Netscape could easily sell advertising on it. Millions of people were visiting Netscape’s site on a daily basis. Case pointed out that it was analogous to the presence that the online services were able to have with their subscribers. Microsoft understood this and was already evolving its MSN into its own website. Case didn’t think Netscape understood what a treasure it had.
At the same time, AOL was negotiating with Sun regarding Java, and Netscape was working with Sun on a simple language, unrelated to Java but called JavaScript. Written by Brendan Eich, JavaScript would let people add interactive features to web pages without the need to learn a full programming language like Java. All three companies saw Microsoft as the enemy and had reason to work together.
Now everyone was threatening Microsoft. At least that was the view from Microsoft’s headquarters. Sun had ideas about a Java-based operating system. Netscape was developing the browser as an alternative to an operating system, in a sense. And Oracle jumped into the fray by pushing stripped-down machines that wouldn’t run Windows.
In October 1996, Oracle and Netscape announced that they would be working together on an NC, a network computer. This announcement showed how fear of Microsoft could drive companies together; two months earlier, Marc Andreessen had ridiculed the NC and Larry Ellison had derided Netscape’s technology as “very, very thin.”
The anti-Microsoft contingent got a heavy hitter in the late 1990s when IBM made a big commitment to Java. But Microsoft continued to make inroads into the Internet and online spaces. By the end of 1997 Internet Explorer had passed Netscape’s browser in popularity, and by the end of 1998 MSN had passed Netscape’s Netcenter site in the number of visitors and had become a major portal, a place that millions of people used as a sort of home base from which to conduct their explorations of the Web. Netscape was rapidly losing ground. It wasn’t clear what its future would be.
Open Source
Early in 1998, fighting for survival in the market Andreessen had launched just five years earlier, Netscape did something that made jaws drop in corporate boardrooms and cheers rise from programmers. It freed the source code for its browser.
The source code for its products is the equivalent of a software company’s crown jewels, to be protected against prying eyes and thieving hands. Legal wars had been fought over such intellectual property, so bitterly that in some cases the warring companies were damaged beyond recovery. Borland was deeply wounded by the cost of such litigation; Digital Research had lost its chance to recover from the IBM disaster when Apple threatened to sue over GEM; and Software Arts was driven out of business by protracted litigation with Personal Software.
But Netscape was proposing to put its source code on the Internet for all to see. And not just see. Programmers would be free to use the code to develop new products. But what they developed would also have to remain open to other developers. This meant that Netscape could use enhancements written by other programmers in its browser. The company was inviting the entire software community to help develop its software. The project and its website were called Mozilla, the original code name for Netscape’s browser.
Andreessen and Clark knew that there were risks in doing this, but they also knew the benefits of open systems. The personal-computer industry had been built on the free sharing of information. Where progress was rapid, it made sense to share, they believed. In fast-growing areas like the Internet, it didn’t make sense to protect technology that was growing rapidly obsolete anyway. It was a bold plan.
But not without precedent. Most of the software underlying the Internet had been developed in this open way. In particular, the Unix operating system had advanced in this open manner.
In 1991 a young programmer in Finland named Linus Torvalds began work on a new variant of the Unix kernel (the part of an operating system that handles basic operations such as memory, files, and peripheral interfaces). Torvalds called his operating system Linux, and he made the source code public, inviting the programming community to contribute to its enhancement.
Linux was itself built on a tradition of open development. Torvalds even toyed with naming it Freax, for Free Unix. Torvalds did all of his development work using another freely available Unix variant called MINIX, written by Andrew Tanenbaum in the Netherlands. At the same time, Richard Stallman and Bill Joy had variants of Unix (called GNU for “GNU’s Not Unix,” and BSD for "Berkeley Software Distribution," respectively) in advanced states of development. All were in some fashion or other open software. Linux was soon covered by the GNU General Public License, written originally by Stallman, which guarantees users the right to use, study, share, and modify the licensed software. The name Linux refers most properly to the kernel, and the operating system as a whole is sometimes called GNU/Linux.
The response to Linux was electrifying: in six years, Linux went from a hobby project at the University of Helsinki to become the dominant version of Unix. It was ported to Intel PCs and the Mac and spread like a virus through the software-development community. Before long, competition from Linux was getting to Microsoft. In an internal document revealed by Eric S. Raymond, Microsoft laid out the threats that Linux and free software posed to Microsoft and the strategies for countering them. The popularity of Linux in the server market was forcing Microsoft to rethink NT, the high-end operating system that it had hoped would supplant Unix in that market. With apparently thousands of talented programmers contributing to the development of Linux, it was questionable that even Microsoft could keep up.
Web professionals, in particular, understood and appreciated the open source model. Apache, the leading web-server program, was a free, open source product, as were many other must-have Internet tools. The Internet and the Web had emerged in academic environments where this was the natural model. It may not have been the most obvious commercial model, but that was deceiving. Linux companies were making money, attracting investors. And open is not the same as free.
Meanwhile, on May 18, 1998, the US Justice Department and the attorneys general of some 20 states filed an antitrust suit against Microsoft that would drag on interminably, alleging, among other things, that Microsoft abused its monopoly position in operating systems to thwart competition, particularly in the case of Netscape.
Netscape was thwarted, all right. The company was thrashing about, trying to decide whether its future, if it had one, was in browsers, in other web software, in services, or in promoting its website as a source of advertising revenue. The fate of Mozilla was uncertain.
Then, on November 24, 1998, AOL announced that it had agreed to buy Netscape Communications in a stock swap valued at some $4.2 billion. Case finally got the company he thought would complement AOL. Sun Microsystems figured in the deal, too, with Sun promising to market the Netscape software that AOL didn’t need in return for a cut of its earnings on the products and some Sun-developed technology. Netscape’s assets were carved up and served to the parties most likely to be capable of exploiting them. Microsoft pointed to the deal as evidence that the playing field had been leveled and that the lawsuit should be dropped. The court didn’t see it that way.
At the same time, the Mozilla project, by enlisting the help of hundreds of programmers outside the company, finished a new version of the browser. Although AOL announced continued support for Mozilla, it hardly mattered. Now that it was an open source product, the browser had, as one journalist put it, “gone directly from the Internet’s endangered species list to virtual immortality.” No longer tied to one company, it would be around as long as programmers saw value in maintaining it. But immortal or not, it had been marginalized by Microsoft.