When vendor business models vanish

A couple of years back, I posted a piece, based on my own observations, on how megashifts can wipe out entire industries in a matter of a few years, as well as seemingly well-entrenched business processes.  

In light of recent events -- such as Microsoft coming out of its official state of denial about open source and Linux -- I thought I would revive the post. What I spoke about in the original post about is the wave on which Microsoft rose to fame and fortune -- the shift from dedicated, highly centralized office operations to self-administered, multi-tasking PCs.

Now, Microsoft is at the receiving end of a battle against irrelevance -- trying to preserve its business model against open source stacks/tools, the Web 2.0 platform, and service-oriented middleware. In some cases, the vendor has done a good job of embracing the threats (such as with .NET and Web services), but the threats keep coming on fast and furious.

Consider the impact of Web 2.0. In a recent Webcast, Gartner's David Mitchell Smith put it this way: "A product that costs hundreds of millions of dollars and took 15 years to develop and refine and roll out has its guts copied by a four-person company, who make the same application available at the click of a mouse." Smith was referring to Microsoft Word 2007, of course, and its new online competitor, Writely, now a part of Google.

"Video killed the radio star (and other paradigm shifts)"

Early in my career, I had the opportunity to work on some projects with the Association for Information Systems Professionals (AISP), a group that had taken one wild ride on the information technology roller coaster.

(Note: not to be confused with the Association of Information Technology Professionals, formerly Data Processing Management Association, a vibrant group based in Chicago.)

You see, AISP’s roots were in word processing technologies. At one time there was an entire industry built around word processing. Yes, you read it right; word processing– led by IBM, Wang Laboratories, and Xerox. Even Exxon built and sold word processors. Word processing terminals hit the market in the 1970s, and companies began to replace secretaries with huge, centralized word processing centers that would generate correspondence and documents.

AISP, in fact, was originally called the International Word Processing Association, or IWP. The association had its own huge, multi-million-dollar trade show every year called Syntopican. But the party began to break up as PCs gained a foothold in the 1980s, and word processing software became part of every desktop.

At first, analysts were incredulous that executives would sit down and type their own documents at a PC. And the concept of data processing/word processing integration seemed like a far-off fantasy. But that’s exactly what happened. Technology changed the corporate culture, and killed the suit executive. IWP/AISP rode the wave, but as PCs became ubiquitous in corporate offices in the late 1980s and 1990s, the association -- and the industry it represented -- completely disappeared.