It is the 25 year anniversary of the PC and I have long wondered if the industry standard technologies that resulted from the PC revolution were accidental because the computer industry always favored proprietary technologies.
It was good to discuss this subject when I recently met with IBM's top strategist, Irving Wladawsky-Berger. We talked about the disruptive effect of the PC technology. It disrupted the business models of huge sectors in the computing industry, nearly all the minicomputer and mainframe companies were put out of business or disappeared through acquisitions. Even IBM barely survived--it had to reinvent itself as an IT services company.
There are many definitions of a disruptive technology, but to me, a disruptive technology is something which disrupts the business models of large numbers of companies. You can see the train wreck happening in front of you, but you cannot get out the way.
The East Coast minicomputer companies could see what was happening, but they couldn't change course, or downsize fast enough. Mr Wladawsky-Berger said that it was IBM's research labs, the largest in the world, that helped save the company.
"In labs, we were able to see a few years ahead and we could predict the disruptive effect of the PC but our management wasn't able to react fast enough." He said that making the necessary changes at IBM, the cuts in staff and projects was very difficult to do.
"People talk about having to 'eat your children' but those people clearly have no children of their own," he said. I agree, as a father of two fantastic kids my instincts are to protect them as much as I can, and I can see how that kind of emotional involvement in business ventures, the people you work with, the communities created, makes it so tough to make the hard decisions.
I remember chatting with Ed Zander, the first interview since he left as president of Sun Microsystems. He said the worst thing about his job was laying off people at Sun, following the dotcom dotbust. Sun had never been in that position before, its culture was one of fast paced growth and loyalty to staff. Mr Zander went on to join Motorola as CEO and make the tough restructuring decisions as an outsider.
And that's why Lou Gerstner, an outsider, was brought in to run IBM. I read Mr Gerstner's account of those times in his excellent book, "Who says elephants can't dance?" He had to be incredibly rigorous and disciplined in his ten-year-long transformation of IBM, in response to the incredible disruption wrought by PC technologies.
I asked Mr Wladawsky-Berger why IBM chose off-the-shelf components and software for its IBM PC, and thus enabled an open industry platform that spawned a massive industry. Up until then, proprietary computer systems were the way the computer industry made money, and lots of it.
Mr Wladawsky-Berger said that IBM used off-the-shelf technologies to create the PC platform precisely because it did not take the threat from the PC seriously. "We dealt with big, complex computer systems, our management did not look to the PC as something that could seriously challenge our business."
But some researchers in IBM's labs did see the writing on the wall and eventually that message was recognized. IBM was lucky in that it had a large enough business base that gave it time to make the changes needed for survival. Others didn't have the same solid customer base and took too long to make changes and are now gone.
Are the platform industry standards of the PC industry an anomaly? I think they were because we haven't been able to see much of the same in other industries.
The network comms business, and the cell phone business sectors remain resolutely based on many competing technologies. Intel and Microsoft were not able to convince those industries to standardize on components and software in the same way as happened within the PC industry.
And the reason for that, IMHO, is that Intel and Microsoft sucked all the margins out of the PC business leaving tiny slivers for the manufacturers. Why would other companies allow the same to happen in their sectors?
- - -