AIM alliance

Microsoft's worst nightmare is a conjoined Apple and IBM. No other single change in the dynamics of the IT industry could possibly do as much to emasculate Windows.[3]

From the 1980s into the 1990s, the computer industry was moving from a model of just individual personal computers toward an interconnected world, where no single company could afford to be vertically isolated anymore. Infinite Loop says "most people at Apple knew the company would have to enter into ventures with some of its erstwhile enemies, license its technology, or get bought".[4]^{: 428–429} Furthermore, Microsoft's monopoly and the Wintel duopoly threatened competition industrywide, and the Advanced Computing Environment (ACE) consortium was underway.

Phil Hester, a designer of the IBM RS/6000, convinced IBM's president Jack Kuehler of the necessity of a business alliance.[5] Kuehler called Apple President Michael Spindler, who bought into the approach for a design that could challenge the Wintel-based PC. Apple CEO John Sculley was even more enthusiastic.[6]

On July 3, 1991, Apple and IBM signed a non-contractual letter of intent, proposing an alliance and outlining its long-term strategic technology goals. Its main goal was creating a single unifying open-standard computing platform for the whole industry, made of a new hardware design and a next-generation operating system. IBM intended to bring the Macintosh operating system into the enterprise and Apple intended to become a prime customer for the new POWER hardware platform. Considering it to be critically poorly communicated and confusing to the outside world at this point, industry commentators nonetheless saw this partnership as an overall competitive force against Microsoft's monopoly and Intel's and Microsoft's duopoly.[7][8] IBM and Motorola would have 300 engineers to codevelop chips at a joint manufacturing facility in Austin, Texas. Motorola would sell the chips to Apple or anyone else.

Executives said the negotiations were stop and go, sometimes seeming to founder and then speeding up as impasses were resolved. The main disagreements occurred when one company or the other thought it was giving away too much technology. Executives said that the technological contributions of both sides were evaluated and that money was used to balance the terms, in what negotiators referred to as the "cosmic arithmetic." But how much money is being paid, and which company is paying, is closely guarded information.

— The New York Times[1]

Between the three companies, more than 400 people had been involved to define a more unified corporate culture with less top-down executive decree. They collaborated as peers and future coworkers in creating the alliance and the basis of its ongoing future dialog which promised to "change the landscape of computing in the 90s".[1]

In 1992, the earth shook: IBM and Apple clasped hands and pronounced themselves allies. From this union sprang Taligent ... developing nothing less than a universal operating system.

— Macworld[9]

On October 2, 1991, the historic AIM alliance was officially formed with a contract between Apple CEO John Sculley, IBM Research and Development Chief Jack Kuehler, and IBM Vice President James Cannavino.[10][11][2]^: 69 Kuehler said "Together we announce the second decade of personal computing, and it begins today" and Sculley said this would "launch a renaissance in technological innovation", as they signed the foot-high stack of papers comprising the contract. The New York Times called it "an act that a year ago almost no one in the computer world would have imagined possible". It was so sweeping that it underwent antitrust review by the United States federal government.[1]

In 1992, Apple and IBM created two new companies called Taligent and Kaleida Labs as had been declared in the alliance contract, with the expectation that neither would launch any products until the mid-90s.[1] Since 1988, Apple had already created a next-generation operating system, codenamed "Pink"; and Taligent Inc. was incorporated to bring Pink to market as the ultimate crossplatform object-oriented OS and application frameworks. Kaleida was to create an object-oriented, cross-platform multimedia scripting language which would enable developers to create entirely new kinds of applications that would harness the power of the platform. IBM provided affinity between its own Workplace OS and Taligent, replacing Taligent's microkernel with the IBM Microkernel and adopting Taligent's CommonPoint application framework into Workplace OS, OS/2, and AIX.

It's natural that many people saw Apple's alliance with former adversary IBM Corp. as an ominous portent for the independent future of the Macintosh. The sight of Apple and IBM chief executives gripping and grinning on national television wasn't nearly as confusing as their vow to bring the Mac and IBM desktop computers into the 21st century with shared technology such as PowerPC chips, PowerOpen Unix, and new operating software from Taligent Inc. and Kaleida Labs Inc. Present and future shock aside, that's a lot to digest.

— MacWeek[12]

CISC microprocessors, including the mainstream Intel x86 products, were considered an evolutionary dead end, and that because RISC was the future, the next few years were a period of great opportunity.

The alliance's hardware is based on the PowerPC processors—the first of which, the PowerPC 601, is a single-chip version of IBM's POWER1 CPU. Both IBM and Motorola would manufacture PowerPC integrated circuits for this new platform. The computer architecture base is called "PReP" (PowerPC Reference Platform), later complemented with OpenFirmware and renamed "CHRP" (Common Hardware Reference Platform). IBM used PReP and CHRP for the PCI version of IBM's RS/6000 platform, which was adapted from existing Micro Channel architecture models, and changed only to support the new 60x bus style of the PowerPC.[13]

The development of the PowerPC is centered at an Austin, Texas, facility called the Somerset Design Center. The building is named after the site in Arthurian legend where warring forces put aside their swords, and members of the three teams that staff the building say the spirit that inspired the name has been a key factor in the project's success thus far.

— MacWeek, 1993[12]

Part of the culture here is not to have an IBM or Motorola or Apple culture, but to have our own.

— Motorola's Russell Stanphill, codirector of Somerset[12]

In 1994, Apple delivered its first alliance-based hardware platform, the PowerPC-based Power Macintosh line, on schedule as predicted by the original alliance contract.[1] Infinite Loop considered the PowerPC to be five years too late to the overall market, "no more than a welcome offering to Apple's own market base", and further hamstrung by the legacy architecture of System 7.[4]^{: 434–435}

In 1995, IT journalist Don Tennant asked Bill Gates to reflect upon "what trend or development over the past 20 years had really caught him by surprise". Gates responded with what Tennant described as biting, deadpan sarcasm: "Kaleida and Taligent had less impact than we expected." Tennant believed the explanation to be that "Microsoft's worst nightmare is a conjoined Apple and IBM. No other single change in the dynamics of the IT industry could possibly do as much to emasculate Windows."[3]

Efforts by Motorola and IBM to popularize PReP and CHRP failed when Apple, IBM, and Taligent all failed to provide a single comprehensive reference operating system for server and personal markets—mainly Taligent's OS or IBM's Workplace OS. Windows NT was the only OS with mainstream consumer recognition that had been ported to PowerPC, but there was virtually no market demand for it on this non-mainstream hardware. Although PowerPC was eventually supported by several Unix variants, Windows NT, and Workplace OS (in the form of OS/2), these operating systems generally ran just as well on commodity Intel-based hardware so there was little reason to use the PReP systems. The BeBox, designed to run BeOS, uses some PReP hardware but is overall incompatible with the standard. Kaleida Labs closed in 1995. Taligent was absorbed into IBM in 1998. Some CHRP machines shipped in 1997 and 1998 without widespread reception.

Relations between Apple and Motorola further deteriorated in 1998 with the return of Steve Jobs to Apple and his contentious termination of Power Macintosh clone licensing. Reportedly, a heated telephone conversation between Jobs and Motorola CEO Christopher Galvin resulted in the long-favored Apple being demoted to "just another customer", mainly for PowerPC CPUs. In retaliation, Apple and IBM briefly expelled Motorola from the AIM alliance, and forced Motorola to stop making PowerPC CPUs, leaving IBM to design and produce all future PowerPC chips. Motorola was reinstated into the alliance in 1999.[14]