A good deal of resources in some large organizations are wasted on vanity projects initiated by mid-management specifically for such value-capture.
By the way IBM did it at least four times before: once when they Computing-Tabulating-Recording company reinvented themselves and their focus and became IBM; once after WWII when they made a push into electronic computing and once in the 60s with the phenomenal 360 project and finally in the 80s when PCs dominated revenue.
Thomas J Watson’s autobiography is a must-read and covers up through the 360.
When a technology is at the point where it is maturing, the cost of entry is bank-breaking. By then the first movers have attracted serious capital, but more importantly they have network effects on their side. Everyone can see this is the way to go and they are way ahead of you. There’s a decision point, spend billions to probably be an also-ran anyway, or essentially give the money to the shareholders.
Everybody focuses on the technology, but it’s the network effects that really matter. This is why WebOS and Windows Phone failed, why couldn’t HP and Microsoft buy their way into the mobile phone landscape? Their technology was excellent. The problem was the weren’t competing with Apple and a Google. They were competing with them, plus all the companies that had invested in the iPhone and Android ecosystems. The carriers, device manufacturers, software developers, service companies, all with huge investments in those platforms. Add that all up and it’s maybe 10x as much as just Apple and Google on their own. By now, probably a lot more.
So it’s all about timing. Google knew this, which is why 20% time happened. You pretty much have to invent the future to have any chance of owning it, or even getting a slice. Google was just incredibly lucky that Android fell into their laps at just the right time, and was powerful enough to compete with iOS. So the problem is, how do you keep genuinely innovating?
The opportunity came because the whole industry was moribund, they couldn't see the wood for the trees. Most of us hated our phones.
They thought the iPhone was just a phone, and judged it in those terms. A massive mistake that allowed Apple to walk away with over 90% of the profits of the entire industry right under their noses. Their network effect advantages didn't help them, because they were obsolete. It's like hoping the network of stables, fields, saddle makers and horseshoe manufacturers will save the horse drawn carriage from the car. The network effects that matter to smartphones are app stores, app developers and services for apps.
The iPhone vision of a hand held computer that happened to make phone calls was way broader than I could get my head around at the time. I remember predicting that there were maybe 10 apps that would ever make money on such a device :-).
Of course my phone does much more now, calling and texting being the least of it. I wouldn't go back ( * ), but I also won't go back to the cars of the 70s. This doesn't mean I hated my dad's car.
Apple invented a new phone which is not a phone as intended before 2007 and one that people liked. That's why they got so successful.
HP and Xerox are probably still good at what they used to do (I'm happy with my ZBook and LaserJet) but they are probably not where the bulk of the market is nowadays. So they seem to be fading away.
(*) Except that phones got so light and small around 2000 that they could almost fit in a closed fist and I'm missing that.
I somehow hate smartphones nowadays because of the "more is less" dimension but the iphone was a normal thing to happen.
Basically to become that successful, companies have some hit product that becomes their golden goose. All data in the world says that a dollar invested in keeping the golden goose alive and healthy is the optimal way to invest that dollar. No one in the company (not execs, or accountants, or engineers) would want to disrupt this good thing that's going on.
Like, suppose that technologists/engineers make rational data-driven decision - look at this huuuge pile of data that validates the decision to continue doing the same thing over and over again.
At that point the business model and original product are baked into the companies DNA, and despite new things coming along, they really can't even imagine what it's like to do anything else.
The ability to reinvent is truly the secret sauce to business. Very few execs can do this for their organizations. If someone could do it reliably and predictably, they'd instantly be compensated $100M+ and dropped into any of the companies you mentioned to 'turn it around'
Company success is often about judging timing... too early or too late == death both cases. Super hard to do.
This generation is risking that there won't be a next big thing, and so someone smaller but more focused comes from behind and slowly takes over while they are focusing too much energy on looking for a next big thing that never happens. A more focused organization would better look after the core business and not be disrupted by someone who does their core business just a little better.
I can't tell you which answer is right (ask me in 30 years), but I can see possibilities.
My point was more of a warning to startup founders and investors. They should not assume that Google and the others will be too slow to respond to a competitive threat that a startup poses or a big opportunity that a startup creates. They will pounce aggressively, and either acquire or kill the startup. Complacency about FAANG is very very dangerous to the health of a startup.
And if weve learned anything from this post, the much smaller company can apparently buy the larger one.
An excellent article about Fujifilm, and why it survived but Kodak died.
Kodak is dead. Today's Kodak is basically just a brand. The film division is a different entity.
https://petapixel.com/2018/10/19/why-kodak-died-and-fujifilm...
What the UK Kodak Pension Plan bought is Kodak Alaris - they sell still image film. And they buy that film from Eastman Kodak.
Maybe those companies that went gracefully into the night were able to pay out dividends for their owners to reinvest in Google, Facebook, etc and nobody lost much of anything from their decline?
In the embedded systems space, MIPS is alive and if not kicking, at least twitching a bit. ARM has grabbed a lot of marketshare, but MIPS will likely hang on to some of the very low-clock systems.
It is interesting to me as a technologist to remember these companies as both powerhouses in their domains and failing enterprises. What I don't know is what allows a company to successfully 're-invent' itself or to recover its core values and return to a previously powerful position. IBM did that once transitioning from PCs, Microsoft seems to have done it, and Apple pulled it off when Steve Jobs returned. SGI died, MIPS is nearly dead, Sun is dead, Compaq died, Dell might be considered a comeback, National Semiconductor died, AT&T Bell Labs died, Northern Telcom died, Polaroid died, Kodak is nearly dead.
There are obvious issues when the accountants take over and start squeezing the cash out of a company, and companies that just keep getting deeper and deeper into a technology that isn't going to survive when something new has come along. But why are these events so crippling that companies that have the resources to re-invent themselves seem to so often fail to do so?