Complacency in the computer industry
G. “Anand” Anandalingam, Henry C. Lucas · 2004
Abstract This chapter explores what happened to IBM — the early victor in the computer industry — and how complacency and a focus on a single technology the mainframe computer, almost ruined the company. Digital Equipment succeeded because Ken Olson and his colleagues recognized that because the central processing unit of a computer was rapidly becoming cheaper to design and fabricate, small computers could offer a price/performance advantage over larger mainframe computers, the staple of the industry in 1960. Seemingly blinded by its own success and victory over mainframes, when personal computers came along, Olson felt they were a “toy” and did not pursue the market aggressively. Although DEC was a winner with minicomputers, it exhibited a sense of managerial optimism, hubris, and invulnerability when confronted with PCs, leading to the winner’s curse. DECs PCs were late to market, and were not particularly competitive.