Microsoft Isnt IBM

By eweek  |  Posted 2003-06-09 Print this article Print
The article in the May 19 edition of eWEEK by Aaron Goldberg concerning the demise of Microsoft over time ("Microsoft Hits Downslope,") is interesting but, I think, far from accurate. Like Mr. Goldberg, many of us were there in the 70s through the 90s and saw IBM go from global computer dominance to near extinction. Some of us even remember the challenges IBM faced when the Justice Department called for the company to divest itself of its service bureau subsidiary, a situation that was similar to Microsofts legal challenges of recent years.

For Microsoft to go through the same cycle as IBM, the external and internal conditions that created the problems at IBM would also have to be present at Microsoft. That seems unlikely.

In the 1980s, IBM dominated the highly profitable mainframe computing hardware and software. This led some at IBM to see personal computing as a hardware opportunity only. They miscalculated and pursued a path that caused significant problems for management and shareholders. Nonetheless, IBM still remains dominant in hardware and software in the upper end of enterprise computing. This is often overlooked by those other than enterprise customers. In the 1990s, IBMs challenge was learning to be profitable again as profit margins on hardware began to shrink. IBM never lost its skills in creating and deploying large-scale computing systems.

Today, there are still struggles at IBM over hardware and software versus consulting. Most CIOs of large enterprises have suffered through IBMers selling hardware and software to the technical staff while selling outsourcing to the CEO. This conflict clearly demonstrates IBMs lack of a clear vision for its business lines.

Microsofts challenges have been different. Today, the company is a target of criticism, not for its failures but for its extreme success. To their credit, company leaders focused on software and abandoned mainstream computing hardware. Their ability to stay focused on software when they could have easily ventured into other computing areas is a testament to the clarity of their vision. This clarity was evident in the late 1990s when the company faced a Justice Department challenge similar to that of IBM, and it remained focused on developing and delivering new and innovative products.

The company is serious about many things, but its most impressive trait is knowing its most important asset is its people. Few companies have done as much to build and protect employee and shareholder value as has Microsoft. That factor alone will sustain the company through difficult cycles in the computing industry. Microsoft will have more challenges, but it is unlikely they will come from the same sources as IBMs.

Bob Whitehead retired as CIO of SunTrust Banks Inc. last year. He can be reached at


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel