How Microsoft Quietly Became the World’s Most Valuable Company

IBM did it first.

Crickets.

I miss my Zune.

I am muting all corporate ads like this while Twitter is censoring conservatives and not following their own TOS to selectively remove people from their platform.

And nobody is better off for it

Took a page from IBM

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There is no way to stop technological innovation. There is so much to learn from history lessons. 'Think different.' – Steve Jobs

Just like legends have their legends too, so happens with incumbent companies that once in the past were on the disruptor side.

Well, today the 'sleeping giant' Microsoft is in the incumbent's business of providing services, consulting and startup ventures. This is the other side of the innovation equation.

So IBM finished its personal computer era with a transition from innovator in computer hardware to being one of the many players in services, software and consulting. That's how disruption happens and evolves.

In 2004, the Chinese computer maker Lenovo took over IBM's personal computer market, becoming a key player in the global tech industry. IBM got out of the PC business, selling it to Lenovo.

Back in the 1980s, IBM thought that there was no way that some tech geek could destroy their supremacy on personal computers. However, it really happened. Michael Dell started Dell Company from his college room and became the CEO of a Fortune 500 company eight years later.

The “IBM compatible architecture” became an industry standard and the “PC” became a standard generic term.

After a few companies reverse-engineered the IBM PC BIOS, competitors such as Compaq, Dell and HP came out with their own “IBM compatible” personal computers and peripherals, creating a fast growing industry.

Within two years, personal computers were no longer a hobbyist phenomenon. People started buying the IBM PC, and the next generations of compatible computers by the thousands, and then the tens of thousands.

This opened the market and led to the extraordinary success of the PC. At the same time, this also was a terrible mistake for IBM, which marked the beginning of the end of IBM supremacy in the computer market.

They made the IBM PC an open-architecture product and published a technical reference of the system circuits' designs and software source codes. With this information, other companies could develop system software and build peripheral components for the PC.

They went to Microsoft for the QDOS/MS-DOS operating system and to Intel for its 8088 microprocessor. They chose an existing monitor from Japan and a dot-matrix by Epson. Only the keyboard and the system unit box itself were designs from IBM.

It was the first time that the team in charge at IBM decided to go outside the company and use off-the-shelf parts to fast combine a cheap microcomputer they could sell for US$1500.

Until then, proprietary computer systems were the way the computer industry made money, and lots of money. Until that moment, IBM had designed and made nearly everything it sold.

3) Third, the license agreement enabled Microsoft to license its operating system to other companies making small computers, as well as to IBM.

When it introduced the PC, IBM did three things out of character. 1) First, it told the whole world how it built the PC and invited others to develop hardware pieces that would work with it. 2) Second, it bought the operating system from a third-party company, Microsoft.

When the concept of a microcomputer came up first at IBM headquarters, a senior executive asked: “Why would anyone want to take a computer home with them?”

The funny and sad thing is that IBM which started the whole show of the PC has never really understood the potential of the new disruptive technology.

The IBM PC was not the first computer, and even not the most advanced. But short time after it arrived on the market in 1981 it became the leading platform in the information revolution that brought computing out of the glass house and into the daily life.

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