- 1 - Failures of Large Computer Companies Final Project submission for CSEP590A: History of Computing, autumn 2006 December 7, 2006 Archie Russell - University of Washington Avichal Singh - University of Washington Bruce Sherwin - University of Washington Christopher Scoville - University of Washington James Vasil - University of Washington Bernt Wahl - University of California, Berkeley- 2 - Contents Introduction................................................................................................................................... 3 Apple Computer............................................................................................................................ 4 1 History..................................................................................................................................... 4 1.1 Early Failures .................................................................................................................. 5 1.2 Mid-late 90's failures ...................................................................................................... 6 2 Analysis................................................................................................................................. 11 2.1 Policy considerations .................................................................................................... 12 Digital Equipment Corporation (DEC) .................................................................................... 14 1 Introduction........................................................................................................................... 14 2 DEC Matures ........................................................................................................................ 15 3 DEC Fails.............................................................................................................................. 16 4 Conclusion ............................................................................................................................ 17 International Business Machines (IBM) ................................................................................... 19 1 Empire Crumbles .................................................................................................................. 19 2 Mainframe Myopia ............................................................................................................... 19 3 Dominant Design .................................................................................................................. 20 4 Company Culture .................................................................................................................. 22 5 Independence: won and lost.................................................................................................. 23 6 Conclusion ............................................................................................................................ 24 7 Notes ..................................................................................................................................... 25 NeXT Software............................................................................................................................ 28 1 Early History......................................................................................................................... 28 2 Failure in Hardware .............................................................................................................. 29 3 Limited Success in Software................................................................................................. 30 4 NeXT's Big Break................................................................................................................. 30 5 Final Analysis ....................................................................................................................... 31 6 Postscript............................................................................................................................... 31 7 Notes ..................................................................................................................................... 31 Silicon Graphics (SGI)................................................................................................................ 33 1 SGI History ........................................................................................................................... 33 2 Analysis of SGI's Failures..................................................................................................... 34 3 Conclusions from SGI........................................................................................................... 36 Comparison ................................................................................................................................. 38 1 Comparison ........................................................................................................................... 38 1.1 External Forces ............................................................................................................. 38 1.2 Internal Forces .............................................................................................................. 40 Bibliography ................................................................................................................................ 41- 3 - Introduction By studying the history of computer companies that fell from industry-leading positions, we can identify the major reasons that caused these companies to fail and come up with a list of lessons to learn from their mistakes. We chose to analyze Apple Computer, Digital Equipment Corporation (DEC), International Business Machines Corporation (IBM), and Silicon Graphics (SGI), because they were all leaders that fell from glory in their respective markets. In addition we cover NeXT to also add perspective from a small company, trying to survive in markets dominated by large ones. By studying the business decisions, the leadership changes, how well each company reacted to technological changes, and the customer reaction to the company’s products, we found similarities in the events that led to failure. People often accuse large companies of being too large and bureaucratic to be
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