Why Did NeXT Fail? (Or Did It?) 

My mini-series on NeXT Computer:

Installment 1: On the Creation of NeXT

Installment 2: NeXT: The Hardware

Installment 3: NeXT: The Software

Installment 4: NeXT: The Apple Purchase

Installment 5: Why Did NeXT Fail?

Over the last six months, I’ve been looking at the history of NeXT Computer. In the series, I’ve discussed the hardware, the software and more.

I’ve been avoiding, however, the topic of why the company failed. Or, at the very least, almost failed, as Apple bought them in the late 90s.

The answer, like most things in this industry, is complex. Let’s look at some factors.

Pricing & Market

NeXT went after the education market, which had been Apple’s territory. However, it did it with even more expensive hardware than Apple’s. Outside of the LC line, Apple’s systems were pricey in the early 1990s.

NeXT attempted to make up for this by aiming its sales teams at higher education, selling not mere computers, but “workstations.”

It didn’t catch on.

Third Wheel Syndrome

Historically, the PC industry has only allowed for two big players — Microsoft and Apple. IBM and others were in the mix early on, but once the dust settled, there simply wasn’t room for a third wheel. Even though NeXT built its own hardware and software like Apple, it couldn’t carve any space for itself from the ever-present Windows marketshare.

Unraveling

In 1987, Ross Perot invested $20 million in exchange for 16% of NeXT’s stock. He joined the board of directors in 1988.

He sold his stock in June 1991, after the second round of NeXT hardware flopped with a $9,999 price tag. He resigned from the board to focus on Perot Systems.

Around the same period, Steve Jobs was spending more and more attention and time at Pixar, which he had bought in 1986.

After the 1990 hardware didn’t sell well, NeXT stopped making hardware, focusing on OpenStep. The move, while vital to the company’s existence, meant shedding many employees and divisions. When OpenStep didn’t do well, the writing was on the wall for Steve Jobs’ second computer company.

NeXT’s Legacy

I would argue that while NeXT was going downhill, the Apple purchase means the company didn’t outright fail, as some have suggested.

The legacy of NeXT computer is strong. Looking around my office I see the following devices that have NeXT’s fingerprints:

  • MacBook Pro
  • iPad and iPhone
  • LaserJet printers
  • Gigabit Ethernet switch

NeXT’s software is the basis of OS X — and therefore iOS. The technology baked in to NeXTStep is what makes Apple’s current operating system software so stable, useful and rich. The development tools used by thousands of people every day to build applications for OS X and iOS find their roots in NeXT tools.

On the hardware end of things, technology like Ethernet, PostScript and more made huge advances thanks to NeXT systems. Additionally, the design of the NeXTCube has come back time and time again with Apple products, as has the willingness to move forward with storage technologies, despite the possible downsides of changing standards rapidly.

We owe a lot to NeXT, without a doubt. The company might not be around today, but its soul sure is.