The Bee In Be's Bonnet

Apple said no, but Be CEO Jean-Louis Gassee insists he can carve out a market for his operating system

In the late 1980s, Jean-Louis Gassee was Apple Computer Inc.'s most feared and loved executive. Brought over from France in 1985 to run product development, he succeeded Steven P. Jobs as the company's technical visionary. He also ruled with an iron fist and demonstrated an arrogance that ultimately left Apple unprepared for competition from the lowly PC. Still, he was worshiped for his love of elegant technology, his charm, and his appetite for fun--like the massive Christmas bashes he hosted each year. "We literally looked forward to them for months," says Apple manager Frank Casanova, recalling a six-stage music-fest starring Ella Fitzgerald in 1990. Gassee, says Casanova, is a "a crazy, passionate, romantic guy."

Today Gassee is still throwing parties, but the settings are far different. Having failed to win a critical bid to sell his tiny software company, Be Inc., to Apple last fall, Gassee is back to pursuing what looks like an impossible quest: to make a place for Be in a Microsoft-dominated world. On Jan. 9, he hosted a dinner at a French restaurant in San Francisco to persuade executives of Mac clonemakers and Apple suppliers not to give up on Be in the wake of Apple's Dec. 20 decision to buy Jobs's NeXT Software Inc. A few days later, he threw a party at his Silicon Valley home to rally his 50 or so staffers.

The French-born entrepreneur now insists he's relieved the Apple deal didn't happen--but brushing off setbacks is classic Gassee. His 1990 ouster from Apple at the hands of ceo John Sculley? "He did me a great favor: He hired me, promoted me, and let me go with enough money to start my own company." Losing the Apple deal? He shrugs. "I'm just a poor French farmer abducted by aliens and raised by venture capitalists. What do I know?" Even a near-fatal incident in 1993, when his carotid artery burst while he was lifting weights, had its upside. He says he's more appreciative of his wife, Brigitte, a painter, and their three kids. "I've never been happier," he says.

So Gassee, 52, is back to being the Don Quixote of the computer industry. Even if every Mac cloner offers Be's cutting-edge operating system, BeOS, as an option, the lack of market share means software developers almost surely won't write Be-compatible programs. (BeOS can't run Mac programs.) And cash is tight: Be has less than $20 million and has yet to deliver a finished version of its program, which is due out in May.

JOBS WON. Pundits are already writing Be off. Says analyst Michael D. Gartenberg, of the Gartner Group Inc.: "No matter how you slice it, Gassee lost what Jobs got: a happy homecoming with Apple, a chance to cash out, and a way to get his technology into volume use."

Undaunted, Gassee is out to exploit the holes left by Apple's purchase of NeXT. Since NeXT's software is used mostly by big corporations, the deal leaves Gassee free to push BeOS as the choice for Mac loyalists who design CD-ROMs, Web sites, and such. And Mac cloners are turning to BeOS for a bit of excitement. "There's still room for Be," insists Stephen Kahng, ceo of fast-growing Power Computing Corp., which licensed BeOS last fall.

Gassee has a great distance to go, but he's staying the course--just as he did in the late 1980s when he refused to cut Apple's margins to compete with cheaper PCs he saw as inferior. That stance, and his support of Apple's embarrassingly heavy first portable Mac, cost him his job.

Nonetheless, Gassee's legendary Apple career kept him on high-tech's radar screen. He presided over Apple's first boom after developing the Mac II--the adaptable "open" Mac that made Apple a power. Changeable, cranky, and often profane, Gassee ranks second only to Jobs on the list of all-time Apple heroes, say Apple engineers. "Sculley was big to the outside world, but Jean-Louis was the bigger force inside Apple," says Casanova.

These days, Gassee's only hope is that software developers, wowed by Be's technology, will come up with fantastic applications that launch BeOS into the big time the way desktop publishing launched the Mac. Microsoft's dominance makes that scenario unlikely, but Gassee is sanguine. "I've been in this business for 29 years," says Gassee, who worked at Hewlett-Packard and Data General before joining Apple. "Great opportunities always came along in the past, and I have great faith the tide will take us somewhere good."

Gassee has seen tougher times. In mid-1995 and in early 1996, he remortgaged his home to cover Be's payroll. But venture capitalists including Microsoft director David F. Marquardt invested $14 million last April and say they'll raise more this year. Gassee, who has invested $2 million, is upbeat. "I still have a nice car and a nice house, and I can't drink more than two bottles of Bordeaux a day anyway," he says.

Still, Gassee clearly wanted to sell to Apple. He tried in 1994 and 1995 to no avail. After Apple's new chief technology officer, Ellen Hancock, showed interest last summer, Gassee went into overdrive. In August, he presented Apple with seven plans to integrate Be's technology. In October, he flew to Hawaii for a two-hour meeting with vacationing Apple ceo Gilbert F. Amelio. And though he initially sought a stock deal worth $300 million-plus, insiders say he cut his price to $200 million by mid-December.

Where did he go wrong? Apple executives say they chose NeXT for its mature, market-ready software. But there's no doubt Gassee overplayed his hand. After Apple made a bid "well south of $100 million" in early November, he walked away, knowing Apple had promised to lay out its software plan in January. He then upped the pressure by signing the licensing deal with Power Computing.

Apple executives resented his tactics. Insiders say he also hurt his chances by demanding--not unreasonably--that Apple add a director with deep PC experience and by leaking to the press. But if his strategy backfired, it may have hurt Apple as well. Says one Mac industry exec: "Nobody really thought Apple did the right thing with NeXT."

Now, to reach the digerati who are his target market, Gassee says he'll license BeOS for far less than $50 per copy--about what Apple charges for its Mac OS. Should the company snare even a modest share of this fast-growing market, which Be thinks could triple to 9 million users by 2000, Be might eke out a living.

CLONES ALONE. Even that is a long shot. But to prosper, Be must expand further--say, to Mac lovers who are sick of Apple's problems but can't stomach buying Microsoft's Windows. That's what outside investors like Marquardt, now Be's largest shareholder, are banking on. But first, Gassee must get BeOS out the door. No one denies the software looks great on paper. It should blast through reams of movie clips, sound tracks, and high-resolution images all at once. But so far it doesn't work with all printers or support any language but English.

And Gassee hasn't won over the developers that count. While the prospect of an Apple deal generated excitement at smaller Mac software shops, key players aren't interested. Says Adobe Systems Corp. ceo John E. Warnock: "We haven't done any development on Be, and it's not high on our priority list."

Gassee is making more headway with Mac cloners. Power Computing will offer both BeOS and Mac OS on its machines starting in March. Cloners DayStar Digital, Umax Data Systems, and Motorola's computer group hint they'll follow suit.

In mid-January, Gassee called Amelio to arrange a meeting to clear the air--and let Amelio know he'd still like to license BeOS to Apple. That's a bold move, given the bad blood that's developed. But Gassee will need that sort of chutzpah--and his usual durable optimism--to carry him through. He shows no signs of giving up. "I don't understand," he says, "why everyone thinks what is now is what will be tomorrow. In an industry that changes as fast as this one, anything can happen."

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