Understanding IBM

Part 20. A Smooth 5-Speed

When Microsoft decides to go after a market, they throw their entire weight into the effort. Look at their assault on the Internet, for example; since 1996 they have gone from nowhere to nearly 50% of the browser market. Meanwhile, the mediocre quality of their other products has gotten worse as the resources have been channeled toward the goal of bankrupting Netscape and removing choice from the browser market.

On the other hand, IBM does not have such an "all or nothing" mentality. When a product fails to take the lion's share of the market, it may be discarded (such as was done with the Micro Channel PC architecture). Or, it may be placed on a "back burner" for continued development. It may even be given a lower priority but continued regular updates. The public may not hear much about the product -- such as OS/2 -- that is given such a lower priority. But the work and the progress continue anyway.

In this way, IBM has a entire set of "speeds" at which its various product categories are developed. It operates like a smooth 5-speed transmission, able to adjust to various market conditions and tune each product line to the appropriate level of activity. Running full-speed-ahead in fifth gear are Java and Internet commerce initiatives, as well as corporate middleware and services. In fourth gear are less-important but still vital activities such as PC hardware, AS/400, and mainframe sales. Third gear are key technologies like OS/2 and network management tools that are needed to leverage important niche markets. In second gear are various other projects that include legacy systems and research. In first gear are the products slated for end-of-life.

The Microsoft policy of all-or-nothing means that driving their information highway gets very rough at times -- change either happens too fast or not at all. As the installed base of Microsoft products grows, this mode of operation will become more frustrating and damaging to their business customers. IBM has learned not to put all its eggs in one basket, and not to kill off products just because they don't rule the marketplace. A smooth 5-speed will be a better vehicle for traveling the information highway than a noisy lawnmower.

Most recent revision: April 25, 1998
Copyright © 1998, Tom Nadeau
All Rights Reserved.

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