The Limits of Strategy-Second Edition

Ernest von Simson

Description

A history and analysis of the business Computer industry by a widely recognized researcher and analyst of the companies in that industry.
1992 was a killing year for the four computer companies most important to business buyers. All four had been dominant suppliers of the preceding years. But on July 16, the CEOs of both digital equipment and Hewlett Packard were pushed into retirement. On August 9, many laboratories declared bankruptcy. In December, IBM halved it's dividend for the first time ever. This edition updates and extends earlier history.

Sujets

• Information Technology
• Computers
• Industries
• Informatique
• Computadora
• IBM
• Computer
• Economics
• International Business Machines
• Ordinateur
• Industry
• Business
• Leadership
• Management
• Culture
• Microsoft
• Hewlett-Packard

Informations

• Publié par: iUniverse
• Date de parution: 24 avril 2023
• Nombre de lectures: 0
• EAN13: 9781663250520
• Langue: English

Extrait

THE LIMITS OF STRATEGY

Second Edition

PIONEERS OF THE COMPUTER INDUSTRY



Ernest von Simson





THE LIMITS OF STRATEGY-SECOND EDITION
PIONEERS OF THE COMPUTER INDUSTRY

Copyright © 2023 Ernest von Simson.

All rights reserved. No part of this book may be used or reproduced by any means, graphic, electronic, or mechanical, including photocopying, recording, taping or by any information storage retrieval system without the written permission of the author except in the case of brief quotations embodied in critical articles and reviews.






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Any people depicted in stock imagery provided by Getty Images are models, and such images are being used for illustrative purposes only.
Certain stock imagery © Getty Images.

ISBN: 978-1-6632-5051-3 (sc)
ISBN: 978-1-6632-5053-7 (hc)
ISBN: 978-1-6632-5052-0 (e)

Library of Congress Control Number: 2023902217




iUniverse rev. date: 04/24/2023



The Limits of Strategy is a terrific book on two counts – first as a highly insightful romp through the history of the transformative industry of our times, written by someone with a unique perspective on how events were actually shaped; and second as a thought-provoking study of how strategic insight, management ability, corporate culture, and industry dynamics interact to determine a company’s success or failure, with lessons to be drawn whether your company is 170 days old or 170 years old.
Wick Moorman, CEO, Norfolk Southern Railroad
“An insightful analysis of all the key IT companies and individuals during the formative period of the industry. This book explains the competitive interrelationships between the different companies and how the IT industry evolved as a result. The lessons in the book are vital to any CEOs managing a business regularly disrupted by new entrants, new technologies, and different business models regardless of industry.”
Larry Ellison, Founder and CEO, Oracle Corporation
Very few people get to witness from the inside a massive new economic sector as it is formed and evolves over a quarter century while permeating all aspects of our lives. Ernie von Simson did just that, studying the computer industry, interviewing its leaders, and shaping the thinking of those of us who implemented this technology during these explosive years. But “The Limits of Strategy” goes way beyond a faithful reconstruction of the “what happened” to discuss the many personality quirks that are often called corporate strategy and that often led to unimaginable misfortune and disaster. Ernie has insight that was not captured by the public media. This is worth reading as human nature does not change quickly.
Scott McNealy, Founder and retired CEO, Sun Microsystems
Ernie von Simson has written a tour de force in his revealing insights into the corporate strategies of the dominant American and Japanese computer manufacturers during the explosion of the industry over a quarter century. From his unique vantage point as principal investigator and master strategist behind the successful, and highly respected, Research Board, Ernie offers fascinating perspective on the limits of strategy from the real life stories of the leading participants…in essence, it’s the people, stupid! A great read in general for the lessons to be had, and for the people like me who were involved, there is plenty to learn about the other guy to make this a real page turner.
George Conrades,
Chairman Akamai, Retired SVP, IBM Corporation
“Ernie von Simson’s “The Limits of Strategy” is a book that can be enjoyed at multiple levels. It is an excellent, detailed history of the computer industry from the 1970s to 2000, a time when the industry grew explosively and transitioned from backroom mainframes and supercomputers that few people cared about to the post-industrial, information age of the personal computer and the World Wide Web. As co-head of the Research Board, Ernie had a ringside seat to this history, as well as personal access to the people who made the history happen.
Then again “Limits of Strategy” is a superb business book on strategy, leadership and innovation. Each of its twenty chapters stands alone as a case study of how a company and its leaders reacted to turbulent times, whether it was coping with fast growth or trying to survive major technology and market changes. These case studies stimulate the mind, and provide excellent material for quite a number of graduate and executive management courses.
Finally, “Limits of Strategy” is a good read, a series of very interesting stories, full of real characters, - some of them quite well known, - and the dramas they went through in trying to navigate the turbulent waters that their companies and the IT industry in general lived through during the 25 years Ernie writes about. It is rare to find a business book that is as well written and actually fun to read as “Limits of Strategy.”
Dr. Irving Wladawsky Berger,
Chairman Emeritus IBM Academy of Technology



Contents
Preface
PRECIS
Introduction

Chapter 1 A Mad Dash through History
Chapter 2 The Strategic Gold Standard: The Watsons
Chapter 3 Reorganizing to Rearm: Frank Cary at IBM
Chapter 4 The Competitive Limits Of Technology: Amdahl versus IBM
Chapter 5 Transient Technology: Travails of the Mini Makers
Chapter 6 First Movers: The Dawning of the Personal Computer
Chapter 7 Defeated In Succession: An Wang at Wang Labs
Chapter 8 Retrospective Strategy: John DeButts at AT&T
Chapter 9 Foreign Cultures: AT&T’s Recruit from IBM
Chapter 10 The Perils of Incumbency: Sun and Oracle Take over the Neighborhood
Chapter 11 Self-Accelerating Economies of Scale: Apple, Microsoft, and Dell
Chapter 12 Choosing The Wrong War: IBM Takes On Microsoft
Chapter 13 Powering to the Apogee: Ken Olsen at DEC
Chapter 14 Tumbling to Collapse: The Palace Guard Ousts Olsen
Chapter 15 Field Force And Counterforce: DEC, HP, and IBM in Battle Mode
Chapter 16 Distracted By Competition: IBM Battles Fujitsu and Hitachi
Chapter 17 Navigating The Waves At IBM: Akers Runs Aground, and Gerstner Takes the Helm
Chapter 18 Squandered Competitive Advantage: IBM Mainframes and Minicomputers
Chapter 19 Building A Great Business: Paul Ely at Hewlett-Packard
Chapter 20 A Study in Contrasts: IBM and Hewlett Packard
Chapter 21 Limits Of Strategy?

Epilogue
Notes



Preface
It took nearly three decades for computers to emerge from back-office accounting machines to take on the mantle of IT—Information Technology. Today, they’re ubiquitous, affecting every aspect of our lives. There is more computing capacity in my cell phone than in the mainframe that mechanized the insurance company where I first learned to program.
The quarter-century from 1974 to 2000 was when this explosive change erupted; I had a ringside seat. With my wife and life partner, Naomi Seligman, I ran the Research Board, a quietly powerful think tank that observed and occasionally guided the computer industry. We were on stage at the entrance of today’s leaders and just before the departure of yesterday’s pioneers. We got to know and admire the giants of those years—including Gene Amdahl, John Chambers, Michael Dell, Larry Ellison, Paul Ely, Bill Gates, Lou Gerstner, Andy Grove, Grace Hopper, Steve Jobs, David Liddle, Bill McGowan, Scott McNealy, Sam Palmisano, Lew Platt, Eric Schmidt, and many more. We saw what factors determined the winners and losers. Above all we learned how disruptive technology can work to destroy even those who understand it well. And why great leadership is required to escape massive upheavals in markets, technologies, and business models. In essence, why there are limits of strategy. The story holds powerful lessons for those facing potentially disruptive technologies today.
My own presence in the most important industry of our time was accidental. I went to Brown University, studied International Relations, then served for three years on a Navy destroyer in charge of electronics and communications. Upon my discharge, I had a few months free in New York before starting graduate school in economics at the University of Chicago. To avoid feeling guilty about quitting in September, I looked for a short-term job that required minimal training. A systems analyst, drawing magnetic tape layouts in the Electronic Data Processing (EDP) department at U.S. Life Insurance, seemed perfect. And that career-bending accident determined the course of my life. I jettisoned my plans for Chicago and received an MBA in economics from New York University instead.
In those early days of computers, no one knew much; we were creating a discipline as we went along. After three years at U.S. Life, I answered a classified ad from the Diebold Group under the impression that I was applying to the safe-manufacturing company. It turned out to be a computer services and consulting firm founded by John Diebold, a charismatic and often flamboyant entrepreneur who was himself creating a practice as he went along—beginning with the term “automation,” which he claimed as his own. He had offices on Park Avenue scented by money; all the women were beautiful, all the men were brilliant and, for a kid from an i