2 of 11Image
Information Technology, software and computer companies are certainly not without their share of poor executive decisions and mismanagement. While dozens of notable examples could have made our list, these were by far the top top 10 worst in the history of the technology industry, causing many billions of dollars of lost revenue or resulted in the downfall of entire companies.In the late 1970's, a small team within IBM began development of its legendary 5150 PC, which recently had its 30th anniversary. But to run this PC, IBM needed an operating system.At the time, there was only one serious contender, Digital Research's CP/M, which ran on a number of early personal computers including the Apple ][, The Osborne and the Kaypro, all of which had substantial market share in a small but quickly growing industry.In 1980, Under the direction of CEO John Opel, IBM attempted to contact Digital Research's founder and CEO, Gary Kildall, to license CP/M for use on the 5150 and other future PCs, but when negotiations failed, IBM went looking for another suitor.Bill Gates, Steve Ballmer and Paul Allen at Microsoft, seeing an opportunity in the making, approached a tiny software company, Seattle Computer Products, which had an x86-compatible OS which used a similar command interpreter to CP/M called 86-DOS. Microsoft purchased the OS and perpetual usage rights, which they then re-christened as "DOS", for a mere $75,000.After negotiating an almost unheard of non-exclusive licensing agreement with IBM, the company would be established as the leader in personal computer software for decades to come.Microsoft's MS-DOS would go on to sell tens of millions of licenses, and the software business for Windows and related follow-on products that Microsoft would generate which would build upon it would turn the company into an industry giant.Digital Research could very well have had the same licensing deal and IBM could have imposed stricter licensing terms on MS-DOS, or could have purchased either of the two companies outright, giving the company an exclusive. But it was not to be.Digital Research's CP/M became an also-ran and the company eventually attempted to produce it's own DOS clone, DR-DOS, which although having a number of technical improvements over Microsoft's OS, was a dud. It was eventually sold to Novell, then Caldera and then later on became the property of SCO.Eventually, the highly competitive MS-DOS based PC clone business made Digital Research's CP/M irrelevant and also would eventually force IBM to exit their own PC business in the late 1990s and early 2000's.
The year was 1982. British computer pioneer Dr. Adam Osborne, a man who has been universally credited with creating the portable computer industry announces the “Executive” OCC-2, the the successor to his current shipping product, the CP/M-based Osborne 1. In fact, over the next year, he also publicly discusses a second, smaller model, the “Vixen”, one which would follow on after that.Not many people will remember Adam Osborne and the significant contributions he made to help establish the personal computer industry. Many people reading this article weren’t even born when the Osborne 1, let alone the Vixen was shipped.However, there is one particular event in computer history in which Mr. Osborne’s name will forever be associated with:The Osborne Effect.What happened to the Osborne Computer Company after the announcements of the “Executive” and the “Vixen” is now classic business school material. Due to the pre-announcement of the newer, better products while the current inventory in the reseller channel was still full, buyers were no longer interested in current products.Despite the fact that the company had a number of advantages, one of those being that it bundled application and OS software with its computers, Osborne was also facing heavy competition from companies like Kaypro, Apple and IBM, so the timing couldn’t possibly have been worse.By November of 1983, the company went bankrupt, and Osborne Computer Corporation was no more.
In the late 1980's, HP determined that their PA-RISC systems architecture for enterprise-class servers was going to hit a performance scaling threshold and began to investigate a new systems architecture, VLIW (Very Long Instruction Word).In 1994, under the direction of CEO Lewis E. Platt, believing that it was no longer cost-effective for HP to have its own microprocessor foundry, the company ceased production and development of PA-RISC, shut down its own foundries and instead partnered with Intel to produce this new VLIW 64-bit enterprise chip, which came to be known as the IA-64.Released by Intel and HP as the "Itanium" in 2001 after seven years of development and billions of dollars of R&D invested, the chip earned the early nickname of "Itanic" due to its low performance compared to less expensive, commodity x86 chips in most regular business applications. IA-64 also proved to be horribly slow when executing x86 instructions, which it had to do using software emulation.Eventually, both AMD and Intel would produce 64-bit x86 systems, which when clustered in HPC configurations would easily outperform equivalent IA-64 systems for significantly less money.IBM and Sun would continue to develop their POWER and SPARC architectures for their high-end servers, which eroded most of HP's high-end market share.While other vendors such as Dell and IBM briefly introduced and sold Itanium-based systems, they shortly discontinued them. An executive at Dell publicly referred to the product as an "Albatross".As if this wasn't awful enough, in 2002 HP merged with Compaq, which had only just acquired Digital Equipment Corporation (DEC) four years before, along with its powerful 64-bit Alpha RISC chip and Windows NT/Digital UNIX servers that had seen some moderate success in High-Performance Computing environments.Seen by both executives at HP and Compaq as a redundant overlapping product under the new merged company and with Intel's IA-64 efforts underway, the Alpha -- arguably a much more mature, better supported and more desirable platform was phased out.Third-party OS development for Itanium other than HP's HP/UX UNIX derivative is now practically non-existent, as Microsoft no longer produces an IA-64 version of Windows Server. Itanium is considered to be a deprecated and legacy architecture by the Linux Kernel Project and is no longer actively supported by mainstream Linux distributions such as Red Hat, SuSE, Debian and Ubuntu.HP is now the only company to sell Itanium-based servers under their Integrity brand, and Oracle recently announced that it would no longer be developing software for the chip.