Ibm Think
what do you think will happened if IBM had a closed architecture and internal development strategy?
The historical development of computers demonstrates that the introduction and sustenance of market players, such as Microsoft and intel, is a consequence of the open architacture and outsourcing strategy adapted by IBM. Discuss consequences on the market as well as on IBM.
Back in the late 1980’s, IBM attempted to close their architecture and regain the market share that they had lost to competitors because of their previous open architecture. They lost ground because they were a huge, slow moving company and other startups were faster to market and could operate with less cost. So IBM came out with a completely new line of computers called “PS/2″ (Personal System 2). The architecture was closed, so anyone who wanted in on the action had to acquire a license from IBM. As a result, the computers and peripherals were extremely expensive.
It turned out to be a total disaster. In 1991 IBM had the largest loss in corporate history up to that point.
Even though the PS/2 line was considered more advanced than the other architectures of that time, people were not ultimately willing to pay the money for it. IBM lost out to the smaller, cheaper competitors who stayed with traditional architecture.
When IBM made their first PC in 1981, the only way they could do it was to use “off the shelf” components. The went to Intel for the CPU and they also went to another company for the operating system. The first company they approached was not interested due to IBM’s strict secrecy requirements. So IBM went to Microsoft, who didn’t have a problem with the secrecy. Since Microsoft didn’t have an operating system either, they bought one called QDOS (Quick and Dirty Operating System) from Seattle Computer Products. They modified it for the new IBM PC and the rest, as they say, is history.
Microsoft did something very important at that time though: they retained the rights to the software, so that they could sell and distribute it to IBM’s competitors. That turned out to be a big mistake for IBM.
IBM lost so much money in the early 1990s, they almost went out of business. This is largely why they are no longer a key player in the desktop market. They ultimately decided to go back to what they knew best: Mainframes and big business.
IBM ThinkPad T21