Microsoft – just like IBM

When Bill Gates and Microsoft signed the PC-DOS deal with IBM in 1980 which turned out to be a key linchpin of the personal computer industry, there could scarcely have been a more striking difference between the two.

IBM was a $26 billion global giant (that is a “B”) with over 340,000 employees worldwide that ruled the computing world.  Microsoft was an unknown $7 million company with 40 employees, barely more than a startup.  IBM was a stodgy, slow moving company that represented the establishment, the status quo, run by a bunch of “suits”.  Microsoft... just like IBMMicrosoft was this little high-tech company with a dream, run by a bunch of kids in jeans… who needed baths.  Little did Gates understand at the time how similar a path they were to follow.

It was only five years earlier when Gates had left Harvard to go to Albuquerque, NM to form Microsoft with his friend Paul Allen.  MITS, a small electronics company in Albuquerque had just created the first true personal computer, the Altair 8800 (sans software) and Gates and Allen recognized the opportunity to be part of the birth of the PC industry.  They were all rebels, infidels to the IBM priesthood that ruled over the world of computing.  Their dream, in much the same vein as Martin Luther: computing should belong to the masses, not just corporate datacenters.

Over the next decade plus as that revolution blossomed IBM became irrelevant with respect to new technology.  They had spent many of those years in antitrust court telling the world they really weren’t a monopoly, and finally in 1982 the main suit by the US government was dropped as moot… which says it all.  But IBM wasn’t going anywhere.  Their “big iron” was in almost every corporate and university datacenter and there were millions upon millions of lines of software written specifically to run on those IBM mainframes.  To this day IBM systems and software built for them have such an installed base that they will be a fixture for at least another decade or two.

During that same time, PC’s running Windows (3.5 to ME to NT to XP) became the defacto standard for PC’s in the workplace.  The networking software to make all of those systems within a company work together ran on servers in corporate datacenters.  They weren’t replacing anything, especially IBM applications, they were new functionality doing things for us we didn’t do before.  First it was Outlook for email and its server component Exchange, then Active Directory for network logon, then SQL Server for database… it was like Kudzu, you don’t notice it until it is too late.

Today, Microsoft has positioned themselves (purposefully or not) such that they cannot be pushed out of the corporate world for at least another decade or two – just like IBM.  Microsoft has had their day in antitrust court, and now nobody cares – just like IBM.  The question for Microsoft now is can it parlay Surface and Windows Phone into a new life, or will they become just another key component in corporate computing, but irrelevant to those of us looking for the latest technology… just like IBM.


Leave a Reply

Your email address will not be published. Required fields are marked *