STEVE JOBS TRIES TO DO IT AGAIN With $20 million from Ross Perot, the creator of the Apple II and Macintosh is attempting to build a revolutionary new computer. The effort is shrouded in secrecy and doubt.
By Brian O'Reilly REPORTER ASSOCIATES Edward C. Baig and Joshua Mendes

(FORTUNE Magazine) – CAN STEVE JOBS dazzle the world again with a new computer? Come summertime, we may know the answer. Since 1985 the man who started Apple Computer and quit in a huff nine years later has been cloistered in a hilltop office high above Palo Alto, California. With a handful of cronies, $20 million in cash from Texas billionaire Ross Perot, and a new company called Next Inc., Jobs has been working to produce a ''fourth wave'' microcomputer that he says will be ten times more powerful than the most popular Apple and IBM personal computers. His ambition, as always, is enormous. He wants to build a machine that will revolutionize higher education by simulating learning experiences difficult or impossible to provide for most students now. ''What we'd like to do is give every freshman biochemistry student access to a $5 million recombinant DNA wet lab,'' he said in a speech last October. ''We cannot do that. But what we can do is simulate that. We can let them build genes, see what kinds of proteins they make, and go back and rebuild the genes.'' Exactly how Jobs will do that and what it will cost remain the biggest mysteries to settle on Silicon Valley in anyone's memory. The suspense is no accident. Jobs -- who, colleagues say, will unveil his machine by June, a year later than originally promised -- appears determined to build anticipation to a frenzy, refusing to grant interviews, berating anyone who leaks anything to the public, even refusing to tell job applicants what they would work on if they were hired. When a well-known computer consultant said he had seen the machine, a Next employee accused him of lying to promote business. Secrecy has turned into a grim joke at Next. Heidi Roizen, a friend of Jobs and president of a software publishing company in Mountain View, California, asked some Next employees what they were doing and got a surprising answer: ''We could tell you,'' one said, ''but then we'd have to kill you.'' Wiring the nation's colleges and universities with a new computer could prove tougher than acing a physics final. Despite his past successes, Jobs is once again a rank upstart at a tiny company, competing on campus with established giants such as IBM, Apple, Digital Equipment, and Sun Microsystems. To displace them, says Gerald Kissler, who helped start a $50 million educational computing program at UCLA, Jobs will have to design a machine that is ''a quantum leap better than anything that exists now.'' He will have to persuade people to write software for the new machine. And he will have to price it low enough for students and financially squeezed colleges to buy it by the thousands. Jobs appears undaunted by the challenges. By all accounts, he remains the same brash, obsessive perfectionist he was at Apple, constantly driving colleagues to produce better than their best. ''He'll do anything to get his way,'' says Andy Hertzfeld, a software writer who has been asked to work for Next. ''When he's trying to convince you to do something, he'll take one tack, then switch.'' Andrea Cunningham, the head of a Silicon Valley public relations firm that worked for Next, clashed with Jobs and was fired, rehired, and then let go again. But she remains a grudging admirer. ''He brings you to your peak performance,'' she says. ''He has a vision and looks over your shoulder and tells you how to get there.'' What hath Jobs wrought? It is almost certainly a black desktop computer far more powerful than either an Apple Macintosh or an IBM PC. According to the few who have seen the machine, its graphics are drop-dead. It will run several programs simultaneously, allowing users to work, say, on a spreadsheet and a word processing program simultaneously. The Next machine is expected to be compatible with networking systems now in place on campuses and in offices. And it will adopt some variation of Unix, an operating-system software popular with universities, engineers, and the federal government, though Next is presumed to be developing its own screen displays to make Unix easier to use. EDUCATORS who have seen the computer are impressed. ''This machine will make it possible to do things five years sooner than I thought possible,'' says Peter Lyman, head of information systems at the University of Southern California. ''People will buy it for the same reason they buy a BMW: It's a beautiful machine.'' Lyman is a member of Next's advisory board, a group of computer managers and educators from two dozen top universities. Like other educators, he signed a nondisclosure agreement with Next and refuses to be more specific. Barbara Morgan, an advisory board member and director of advanced technology planning at the University of California at Berkeley, was ( similarly impressed. ''I had the same reaction as when I first saw the Macintosh,'' says Morgan. ''I wanted one.'' A third advisory council member says he was so taken by the music produced by the machine that he ''told Steve he should go into the piano business.''

So far, so good. But can Jobs really build a BMW of a computer that students and colleges can afford? The average student now spends $1,200 to $1,500 for a computer and a printer. The colleges pay somewhat more, but most are avowed bargain hunters. Vicky A. Walsh, director of computing for the humanities division at UCLA, says she can't afford any bells or whistles on the machines she buys. ''A school this large needs low-end machines,'' she says. ''You're talking $3,000.'' What might Jobs's baby cost? Raymond Neff, former assistant vice chancellor at Berkeley and head of computers there, recalls hearing Jobs say that the basic machine will cost $3,000 to $5,000. ''With basic software and peripherals like laser printers, you're easily at $7,500,'' says Neff, who saw a Next prototype months ago. ''When I asked 50 students if they would spend $5,000 for a computer, only two said yes.'' And what will run on the machine? Though Jobs is almost certainly developing software in-house, big software companies have so far shown a palpable lack of enthusiasm for Next. Microsoft Chairman Bill Gates says his company wants to concentrate on office-automation products and has no plans to rewrite its popular software for Next. Paul Brainerd, president of Aldus, a software publishing company in Seattle, says he's too busy with established computer makers to risk a lot of time and money on Jobs's untested concept. Creating good simulation software, known as courseware, for the college market is tough. Stanford University developed a program called the Would-Be Gentleman, in which students adopt the role of a young landowner aspiring to get ahead in 17th-century France. By responding to a series of events presented cartoonlike on a Macintosh, they learn the importance of land and prestige in an agrarian society. But Gentleman took years to develop. ''It requires about 100 hours to produce one hour of courseware,'' complains a school official. ''Even a dinky homework assignment can take a week.'' Another hitch: Writing courseware doesn't help a junior professor get tenure, so young, computer-literate academics don't devote much time to it. JOBS has alleviated some of his software problems by choosing Unix for his operating system -- the ''traffic cop'' software that controls the computer's central operations. A large supply of Unix programs has been developed over the years and could probably be adapted fairly easily to run on the Next machine. The problem is that most Unix programs lack good graphics; they would have to be rewritten to provide razzle-dazzle. Furthermore, hardly anybody knows which of the several Unix versions Jobs plans to use. Sun Microsystems and AT&T are working together to standardize Unix and make it easier to work with, but a Sun executive does not think Jobs plans to adopt their version. That kind of maverick behavior makes some educators nervous. By way of example, Neff, who will become a vice president at Case Western Reserve University in June, talks about the need to project computer graphics on a large screen in a lecture hall. ''If Steve goes for a fancy screen I can't use in the classroom,'' Neff says, ''forget it.'' Even if the Next machine came with a plentiful supply of software, Jobs might have trouble persuading professors that they really need it. UCLA has spent $50 million on computers over four years, but Kissler says the university has had a hard time measuring just how useful they have been. Lyman at USC acknowledges that there is more curiosity about a teaching machine than pent-up demand. ''We're two or three years from mass enthusiasm,'' he says. Experts at Sun Microsystems, which annually sells an estimated $250 million of workstations that universities use for research, question just how big the market for teaching machines is. ''I keep asking my office if we should target instruction,'' says Marleen McDaniel, head of college marketing at Sun. ''So far we don't see the money in it. The money is in the research end.'' For all the problems confronting Jobs, he has some powerful advantages as he tries to give soul to a new machine. For example, where IBM and Apple must make their new computers and software compatible with old versions, Jobs is free to experiment with new technologies. If he builds a blockbuster machine, it could become a new industry standard. At the very least, Jobs is likely to bring about substantial improvements in computers and their peripherals. Take graphics. Educators are eager to turn raw data into engaging charts, graphs, and pictures, displaying, for example, the behavior of a particle in a cyclotron or the impact of a new pricing strategy. ''We want to give students something they can react to,'' says Michael Carter, director of educational computing at Stanford, which has invested $658,000 of venture capital money in Next. Even top-of-the-line Macs and IBMs can take several seconds to crunch numerical data into an image. That isn't fast enough. Educators have learned that students lose interest if they have to wait just one-third of a second for an image. With a little help from sci-fi moviemaker George Lucas, Jobs is expected to introduce big changes in computer graphics. In 1986 Jobs bought a company called Pixar from Lucas. Pixar had developed a computer chip to speed up graphics displays, which helped Lucas create astonishingly realistic animations. Pixar technology will probably be incorporated into the Next computer. Finally, Jobs appears to be trying to combine into one computer tasks that now require a patchwork of add-ons or multiple machines. For example, creating a multimedia show on today's computers is difficult. But the Next machine apparently has large speakers that produce high-quality sound. And several colleges have asked Jobs to make it easier to project movie images -- from a Shakespeare play, perhaps -- on screen. Next may also be incorporating several devices -- laser printers, copiers, and facsimile machines -- into one unit that will create, store, and transmit images. If Jobs succeeds, and if his price is right, he will have a best-seller popular in any marketplace, which prompts suspicion among some that he is ultimately planning an assault on IBM, Apple, Sun Microsystems, and Apollo Computer in corporate and engineering environments. Winning converts on campus has in the past been a good first step toward penetrating other markets. Universities are far more likely to experiment with a new computer than corporations; Digital Equipment and Apple both had some of their most important successes in the classroom. And when students begin work after college, they often press their employers to buy the computers they used in school. ''Let's assume I invented a screwdriver for education and it was great,'' says Perot with a laugh. ''Don't you think mechanics would want one too?'' TWICE BEFORE Jobs has built machines that transformed the computer industry, with the Apple II in 1977 and the Macintosh in 1984. Past success, of course, is no guarantee of future glory. Witness the example of Jobs's old Apple partner, Steve Wozniak. He surfaced briefly a few years ago, announcing plans for a company that would make remote-controlled toys and devices for operating TVs, VCRs, and other home appliances. He has scarcely been heard from since. But Ross Perot, for one, does not think he will lose money overestimating Steve Jobs. ''Here is a 33-year-old with 50 years' worth of business experience,'' says Perot, Next's unofficial company cheerleader. ''I can't wait for his product to hit the market.''