At a cost of $1,565, the 5150 was 28 pound computer that had a whopping 40KB of ROM and 16KB of RAM (without the floppy disk drives). Most watches today have more computing capacity than that now. And yet, it quickly became an incredible success and within two years, thanks to IBM’s uncharacteristic decision to publish the architecture, Compaq Computer had introduced their clone. And hundreds followed.
Fast forward to 2005 when IBM sold the entire PC business to Chinese PC maker Lenovo for $1.75 billion; IBM just didn’t want to continue to compete in a commodity-based business - not their value strategy. And now, we’re entering a new era where the platforms are smartphones, tablets and embedded devices and everything is connected to the Cloud. Where standalone computing is becoming a thing of the past and the great opportunities are in exploiting the social networking spaces.
All in just a short, 30 years.
This is a story as much about the lifecycle of value as anything. The birth of a new value proposition - personal computing - in a world of expensive, mini and mainframe computers. In a world of custom-written software, packaged software. In a world of proprietary computing platforms, an open platform. In a world of calculators and typewriters, spreadsheets and word processors.
New value to be discovered everywhere.
But, in technology, as in every industry, value is created, exploited, commoditized, and eliminated. Moore’s law has been then driving force in new value creation for computing and yet, there’s been a consistent drag on this new value and it comes from the very industry that blossomed from the original IBM PC - software and application software to be specific.
How many applications that are still in use today were written ten or even twenty years ago? Sure they’ve been patched and ported and prettied up over time, but at their heart they’re still based upon a computing environment that just doesn’t exist any more. Not today's Internet, today's operating systems or today's wireless networks or today's computing platforms and, most certainly, not today's customers.
Not to name names, but we don’t have to look far to find applications that are still being sold today, that were originally written around the early days of the PC era. Amazing and troubling, for like earth’s plate tectonics, sometimes when those old plates shift, they move very fast and very violentlynd a lot of value can go away very quickly in the process. I believe the pressure has been building for some years now, and the value shift for application software will happen and those that think they have the time to prepare will be left in the dust. It will be fast, furious and final.
Are you ready? What's your value strategy?