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Computer Wars: The Fall of IBM and the Future of Global Technology
Now in paperback, the book THE WALL STREET JOURNAL called "required reading for anyone itching to know what happened at Big Blue." A behind-the-scenes look at the dramtic fall of IBM.
- GenresNonfictionHistory
272 pages, Paperback
First published December 21, 1993
71 people want to read
About the author
Charles Ferguson
7 books22 followersLibrarian Note: There is more than one author in the Goodreads database with this name.
Charles Ferguson if a film director and producer, software entrepreneur, writer and authority in technology policy. He won an Oscar in 2011 for Inside Job, his documentary on the financial crisis, and was an Oscar nominee for his first documentary, No End in Sight, on the war in Iraq. He has written four books, and is a life member of the Council of Foreign Relations and a director of the French-American Foundation.
Charles Ferguson if a film director and producer, software entrepreneur, writer and authority in technology policy. He won an Oscar in 2011 for Inside Job, his documentary on the financial crisis, and was an Oscar nominee for his first documentary, No End in Sight, on the war in Iraq. He has written four books, and is a life member of the Council of Foreign Relations and a director of the French-American Foundation.
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October 7, 2012
With hindsight, change in the tech business looks like a story of serial revolutions. But at any one time, things seem pretty stable and it’s surprisingly hard to spot those revolutions until they’re part of history.
Today, for instance, Apple is pre-eminent, Google appears untouchable, Facebook is looking for a way to turn massive popularity into massive earning power, and Microsoft is still raking it in but needs rather badly to have its Windows Mobile deal with Nokia come good.
Meanwhile, smartphones and tablets are tilting usage away from desktops and laptops. And, as ever, computing power and speed keep on improving. On the face of it, it’s hardly a world in chaos.
But rewind to 1993, less than 20 years ago, and you can see how far we’ve come: the landscape would be all but unrecognisable to someone who was only familiar with today’s players.
There was one massive company around which the whole industry revolved: IBM. By 1993, it was in crisis, making huge losses, but it was still almost impossible to imagine a computer business not dominated by IBM. Its strength had come from its mainframe and minicomputer divisions, although it had launched its phenomenally successful PC more than a decade earlier.
One of Bill Gates more profound observations is that "we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten." Charles Ferguson and Charles Morris’ Computer Wars (1993) is a test of that – as they look forwards from their point in time. The book’s subheading is “The Fall of IBM and the Future of Global Technology" - and indeed the book is both history and futurology.
Its most entertaining sections are undoubtedly those that look back, dealing with IBM’s problems. The authors are forensic and merciless in their analysis of how Big Blue fell off its perch, or rather, how Bill Gates helped tip it off. Gates’ reputation, still two years ahead of the triumphant launch of Windows 95, was already well established. The authors describe him as “the most respected and feared man in the computer industry – and the most hated.” But they give his ideas a good write-up, which stands the test of time:
“Software is the democratizing trumpet that is blowing down the walls of mainframe computer centres. It is the nexus between people and machines; humanize the software, Gates argues to anyone who will listen, and the industry’s potential is limitless – and who controls the software controls the industry.”
That was the strategy that was building Microsoft. IBM was Gates’ most important customer, but he was ruthless in pursuing his contractual advantages to allow him to sell his software to the so-called clone PC manufacturers. That meant that as Microsoft kept improving its software, the PC industry increasingly revolved around it rather than IBM. But IBM was so riven by internal feuds and management failures that it didn’t even realize what Gates was doing to it.
Microsoft sat between the chip manufacturers, principally Intel, and the computer makers. Over the years, its irreplaceability to the parties on either side allowed it to grow its profits while the rest of the industry was forced to compete to the death and operate on wafer thin percentages.
The authors’ look into the future is no less interesting than their account of recent history, albeit, understandably, less accurate. The flotation of Netscape was only two years ahead, and the Worldwide Web had been invented two years earlier. But there is no mention of the internet in the book. Instead, there’s talk of “interactive, multimedia computers” and “home multimedia stations”, which would receive content over the air, through fibre optic cables or tapes and CDs. The assumption was that this would be driven by the entertainment industry. But there’s also a vision of a more familiar world: “home catalog shopping and price comparisons would become the norm.”
And there’s a rather remarkable prediction of tablet computing: “most people cannot envision replacing their morning paper, or a good book, with a session at a video terminal. But once a home display station was the size and weight of a magazine, with magazine-picture sharpness and complete, cordless portability, the objections should disappear.”
While the book’s industry analysis correctly predicts the future dominance of what it calls ‘the Silicon Valley model’ (in which it includes Microsoft and Intel), as opposed to the big industrial businesses like IBM and the Japanese computer manufacturers, there is no hint of businesses such as Yahoo! or eBay – companies offering services online, rather than selling products through retail channels or subscription. But hardly anyone else saw that coming either.
After completing the book, Charles Ferguson showed he understood the business far better than most consultants and commentators – by starting a business to develop software (Frontpage), and selling his business to Microsoft. It’s the tale he tells entertainingly in his High Stakes, No Prisoners - so entertainingly that I went to find this earlier work, which is written with the just same intelligence and pace.
Today, for instance, Apple is pre-eminent, Google appears untouchable, Facebook is looking for a way to turn massive popularity into massive earning power, and Microsoft is still raking it in but needs rather badly to have its Windows Mobile deal with Nokia come good.
Meanwhile, smartphones and tablets are tilting usage away from desktops and laptops. And, as ever, computing power and speed keep on improving. On the face of it, it’s hardly a world in chaos.
But rewind to 1993, less than 20 years ago, and you can see how far we’ve come: the landscape would be all but unrecognisable to someone who was only familiar with today’s players.
There was one massive company around which the whole industry revolved: IBM. By 1993, it was in crisis, making huge losses, but it was still almost impossible to imagine a computer business not dominated by IBM. Its strength had come from its mainframe and minicomputer divisions, although it had launched its phenomenally successful PC more than a decade earlier.
One of Bill Gates more profound observations is that "we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten." Charles Ferguson and Charles Morris’ Computer Wars (1993) is a test of that – as they look forwards from their point in time. The book’s subheading is “The Fall of IBM and the Future of Global Technology" - and indeed the book is both history and futurology.
Its most entertaining sections are undoubtedly those that look back, dealing with IBM’s problems. The authors are forensic and merciless in their analysis of how Big Blue fell off its perch, or rather, how Bill Gates helped tip it off. Gates’ reputation, still two years ahead of the triumphant launch of Windows 95, was already well established. The authors describe him as “the most respected and feared man in the computer industry – and the most hated.” But they give his ideas a good write-up, which stands the test of time:
“Software is the democratizing trumpet that is blowing down the walls of mainframe computer centres. It is the nexus between people and machines; humanize the software, Gates argues to anyone who will listen, and the industry’s potential is limitless – and who controls the software controls the industry.”
That was the strategy that was building Microsoft. IBM was Gates’ most important customer, but he was ruthless in pursuing his contractual advantages to allow him to sell his software to the so-called clone PC manufacturers. That meant that as Microsoft kept improving its software, the PC industry increasingly revolved around it rather than IBM. But IBM was so riven by internal feuds and management failures that it didn’t even realize what Gates was doing to it.
Microsoft sat between the chip manufacturers, principally Intel, and the computer makers. Over the years, its irreplaceability to the parties on either side allowed it to grow its profits while the rest of the industry was forced to compete to the death and operate on wafer thin percentages.
The authors’ look into the future is no less interesting than their account of recent history, albeit, understandably, less accurate. The flotation of Netscape was only two years ahead, and the Worldwide Web had been invented two years earlier. But there is no mention of the internet in the book. Instead, there’s talk of “interactive, multimedia computers” and “home multimedia stations”, which would receive content over the air, through fibre optic cables or tapes and CDs. The assumption was that this would be driven by the entertainment industry. But there’s also a vision of a more familiar world: “home catalog shopping and price comparisons would become the norm.”
And there’s a rather remarkable prediction of tablet computing: “most people cannot envision replacing their morning paper, or a good book, with a session at a video terminal. But once a home display station was the size and weight of a magazine, with magazine-picture sharpness and complete, cordless portability, the objections should disappear.”
While the book’s industry analysis correctly predicts the future dominance of what it calls ‘the Silicon Valley model’ (in which it includes Microsoft and Intel), as opposed to the big industrial businesses like IBM and the Japanese computer manufacturers, there is no hint of businesses such as Yahoo! or eBay – companies offering services online, rather than selling products through retail channels or subscription. But hardly anyone else saw that coming either.
After completing the book, Charles Ferguson showed he understood the business far better than most consultants and commentators – by starting a business to develop software (Frontpage), and selling his business to Microsoft. It’s the tale he tells entertainingly in his High Stakes, No Prisoners - so entertainingly that I went to find this earlier work, which is written with the just same intelligence and pace.
May 6, 2009
Mr. Ferguson chronicles IBMs failure to respond to the changing computing market place and captures its fall from preeminence. This book is hugely significant to me in my current industry, telecommunications. IBM's ironic efforts to protect their monopoly dominance of the computing market with techniques that were ultimately responsible for the company's fall from preeminence are being repeated by today's broaband providers. IBM attempted to retain an archaic and inflexible model wherein the hardware and software were inextricably tied to one another. Today's broadband providers are attempting to force the Internet into a model where services are inextricably tied to the physical infrastructure owned by the provider. This model stymies innovation and undermines market forces
Fortunately, there is another way. My company, OHIvey, is engaged in helping communities deploy open service provider fiber to the premise. We teach communities how to have truly competition across true broadband.
Displaying 1 - 2 of 2 reviews