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How quickly things change in the technology business! A decade ago, IBM was the awesome and undisputed king o f the computer trade, universally feared and respected. A decade ago, two little companies called Intel and Microsoft were mere blips on the radar screen of the industry, upstart startups that had signed on to make the chips and software for IBM's new line of personal computers. Though their products soon became industry standards, the two companies remained protected children of the market leader. What has happened since is a startling reversal of fortune? IBM is being ravaged by the worst crisis in the company’s 79-year history. It is undergoing its fifth restructuring in the past seven years as well as seemingly endless rounds of job cuts and firings that have eliminated 100.000 jobs since 1985. Last week, IBM announced to its shell-shocked investors that it lost$
And just when IBM is losing ground in one market after another, Intel and Microsoft have emerged as the computer industry’s most fearsome pair of competitors. The numbers on Wall Street tell a stunning story. Ten years ago, the market value of the stock of Intel and Microsoft combined amounted to about a tenth of IBM’s. Last week, with IBM’s stock at an 11 year low, Microsoft’s value surpassed its old mentor’s for the first time even ($ $ $
Both Intel, the world’s largest supplier of computer chips, and Microsoft, the world’s largest supplier of computer software, have assumed the role long played by Big Blue as the industry’s pacesetter. What is taking place is a generational shift unprecedented in the information age - one that recalls transition in the U.S. auto industry 70 years ago, when Alfred Sloan's upstart General Motors surpassed Ford Motors as America’s NO.1 car maker. The transition also reflects the decline of computer manufacturers such as IBM, Wang and Unisys and the rise of companies like Microsoft, Intel and AT & T that create the chips and software to make the computers work. Just like Dr. Frankenstein, IBM created these two monster competitors, says Richard Shaffer, publisher of the Computer Letter. Now, even IBM is in danger of being trampled by the creations it unleashed.
Although Intel and Microsoft still have close relationships with Big Blue, there is little love lost between IBM and its potent progeny. IBM had an ugly falling-out with former partner Microsoft over the future of personal-computer software. Microsoft developed the now famous disk operating system for the IBM PC called DOS-and later created the . operating software for the next generation of IBM personal computers, the Personal System/2. When PS/2 and its operating system, OS/3, failed to catch on, a feud erupted over how the two companies would upgrade the system. Although they publicly patched things up, the partnership was tattered. IBM developed its own version of OS/3, which has so far failed to capture the industry's imagination, Microsoft's competing version, dubbed New Technology’, or NT, will debut in a few moths and will incorporate Microsoft's highly successful Windows program, which lets users juggle several programs at once. Windows NT however, will offer more new features, such as the ability to link many computers together in a network and to safeguard them against unauthorized use.
IBM and Intel have also been parting company. After relying almost exclusively on the Santa Clara California company for the silicon chips that serve as computer brains, IBM has moved to reduce its dependence on Intel by turning to competing vendors. In Europe, IBM began selling a low-cost line of PCs called Ambra, which runs on chips made by Intel rival Advanced Micro Devices. IBM also demonstrated a sample PC using a chip made by another Intel enemy, Cyrix. And last October, IBM said it would begin selling the company’s own chips to outsiders, in direct competition with Intel.
IBM clearly feels threatened. And the wounded giant still poses the biggest threat to any future dominance by Intel and Microsoft. Last year, it teamed up with both companies’ most bitter rivals-Apple Computers and Motorola-to develop advanced software and microprocessors for a new generation of desktop computers. In selecting Apple and Motorola. IBM bypassed its longtime partners. Just as Microsoft’s standard operations system runs only on computers built around Intel’s computer chips, Apple’s software runs only on Motorola's chips. Although IBM has pledged that the new system will eventually run on a variety of machines, it will initially run only computer programs written for Apple’s Macintosh or IBM's OS/2. Its competitive juices now flowing. IBM last week announced that it and Apple Computer will deliver the operating system in 1994-a year ahead of schedule.
How quickly things change in the technology business! A decade ago, IBM was the awesome and undisputed king o f the computer trade, universally feared and respected. A decade ago, two little companies called Intel and Microsoft were mere blips on the radar screen of the industry, upstart startups that had signed on to make the chips and software for IBM's new line of personal computers. Though their products soon became industry standards, the two companies remained protected children of the market leader. What has happened since is a startling reversal of fortune? IBM is being ravaged by the worst crisis in the company’s 79-year history. It is undergoing its fifth restructuring in the past seven years as well as seemingly endless rounds of job cuts and firings that have eliminated 100.000 jobs since 1985. Last week, IBM announced to its shell-shocked investors that it lost
And just when IBM is losing ground in one market after another, Intel and Microsoft have emerged as the computer industry’s most fearsome pair of competitors. The numbers on Wall Street tell a stunning story. Ten years ago, the market value of the stock of Intel and Microsoft combined amounted to about a tenth of IBM’s. Last week, with IBM’s stock at an 11 year low, Microsoft’s value surpassed its old mentor’s for the first time even (
Both Intel, the world’s largest supplier of computer chips, and Microsoft, the world’s largest supplier of computer software, have assumed the role long played by Big Blue as the industry’s pacesetter. What is taking place is a generational shift unprecedented in the information age - one that recalls transition in the U.S. auto industry 70 years ago, when Alfred Sloan's upstart General Motors surpassed Ford Motors as America’s NO.1 car maker. The transition also reflects the decline of computer manufacturers such as IBM, Wang and Unisys and the rise of companies like Microsoft, Intel and AT & T that create the chips and software to make the computers work. Just like Dr. Frankenstein, IBM created these two monster competitors, says Richard Shaffer, publisher of the Computer Letter. Now, even IBM is in danger of being trampled by the creations it unleashed.
Although Intel and Microsoft still have close relationships with Big Blue, there is little love lost between IBM and its potent progeny. IBM had an ugly falling-out with former partner Microsoft over the future of personal-computer software. Microsoft developed the now famous disk operating system for the IBM PC called DOS-and later created the . operating software for the next generation of IBM personal computers, the Personal System/2. When PS/2 and its operating system, OS/3, failed to catch on, a feud erupted over how the two companies would upgrade the system. Although they publicly patched things up, the partnership was tattered. IBM developed its own version of OS/3, which has so far failed to capture the industry's imagination, Microsoft's competing version, dubbed New Technology’, or NT, will debut in a few moths and will incorporate Microsoft's highly successful Windows program, which lets users juggle several programs at once. Windows NT however, will offer more new features, such as the ability to link many computers together in a network and to safeguard them against unauthorized use.
IBM and Intel have also been parting company. After relying almost exclusively on the Santa Clara California company for the silicon chips that serve as computer brains, IBM has moved to reduce its dependence on Intel by turning to competing vendors. In Europe, IBM began selling a low-cost line of PCs called Ambra, which runs on chips made by Intel rival Advanced Micro Devices. IBM also demonstrated a sample PC using a chip made by another Intel enemy, Cyrix. And last October, IBM said it would begin selling the company’s own chips to outsiders, in direct competition with Intel.
IBM clearly feels threatened. And the wounded giant still poses the biggest threat to any future dominance by Intel and Microsoft. Last year, it teamed up with both companies’ most bitter rivals-Apple Computers and Motorola-to develop advanced software and microprocessors for a new generation of desktop computers. In selecting Apple and Motorola. IBM bypassed its longtime partners. Just as Microsoft’s standard operations system runs only on computers built around Intel’s computer chips, Apple’s software runs only on Motorola's chips. Although IBM has pledged that the new system will eventually run on a variety of machines, it will initially run only computer programs written for Apple’s Macintosh or IBM's OS/2. Its competitive juices now flowing. IBM last week announced that it and Apple Computer will deliver the operating system in 1994-a year ahead of schedule.
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