When I started work as a Unix software engineer at Logica nearly 30 years ago, we were on the cusp of a revolution in IT. IBM was top dog in tech and Digital Equipment Corporation was the world's second-largest IT company. The other major players were the BUNCH companies: Burroughs, Univac, NCR, Control Data Corporation and Honeywell. Yet, just 10 years later, domination had passed to Oracle and Microsoft.
During that transition, we saw new players emerge which had disruptive technologies that changed the way people thought about and used IT. The PC brought power to the user's desk, allowing everyone to take advantage of personal productivity tools, while enabling the rise of client-server computing.
Today, we're on the brink of another upheaval, with disruptive technologies like the iPad and cloud computing changing the IT landscape. The assumption that we'll have Windows everywhere – in the same way we used to have IBM everywhere – is being challenged. We're seeing growing consumerisation of IT, with users accessing business systems through consumer-style devices, while cloud computing means the browser has become the new desktop and we're no longer tied to a particular machine to get at our data and applications.
Twenty-five years ago, faced with similar disruption, the dominant players dismissed or failed to understand these new disruptive technologies. In 1988, Ken Olsen, at the time chairman and president of Digital Equipment Corporation, dismissed Unix by claiming compatibility "doesn’t come by stamping Unix on the label. It doesn’t solve everything; there is no magic. It’s snake oil, absolute snake oil."
In 1998, a failing Digital Equipment Corporation suffered the ignominy of being sold to PC manufacturer Compaq. Proprietary operating systems were all but dead on the server: the majority were running some flavour of Unix – and supporting applications that could happily run on any kind of Unix. Meanwhile, IBM survived only by re-inventing itself as a services company and most of the BUNCH companies were acquired by rivals. Over the same time period, Oracle and Microsoft became the thought leaders of the client-server era.
Today, it's Oracle and Microsoft who seem to be running scared, trying to pretend consumerisation and cloud computing, led by Apple and Google, are insignificant developments. Larry Ellison, CEO of Oracle, told financial analysts in 2008 that cloud computing was just the latest fad in the IT industry and that talking about cloud computing had as much long-term impact as a fashion magazine saying, "Orange is the new pink". He later added, "I don't understand what we'd do differently in the light of cloud computing other than change the wording on some of our ads."
It might have been reasonable for the average person back then to wonder "What the hell is cloud computing?" and be confused by the tendency of IT marketing people to slap the latest buzzword on whatever it was they were already doing. It's pretty surprising that Ellison, one of the IT industry's supposed thought leaders, failed to understand such a significant change in the IT industry. Failed, in fact, as badly as DEC's Olsen failed to understand the impact of Unix two decades earlier.
The Googlighting 'attack ad'
More recently, Microsoft has mirrored Olsen's "snake oil" attack by creating the "Googlighting" video – ironically, posted on Google-owned YouTube. The video attempts to make fun of Google's move away from from its roots as a search engine provider into software as a service (SaaS). Perhaps this kind of "attack ad" works better in the US, where it's a common tactic in politics, but it strongly suggests Microsoft doesn't have enough positives to say about its own products or future plans.
On top of that, by framing customers' needs in the video around "Excel and Powerpoint", Microsoft seems to have spectacularly missed the mobility and collaboration aspects of the new era we're moving into – just as Digital's Olsen missed the point about Unix. In short, Microsoft reinforces the impression that the only way it can compete is if we remain stuck in the previous "personal productivity" era, but in the Post-PC world the focus has moved on to team productivity and collaboration as epitomised by SaaS services such as Google Docs.
You only have to look around to see the rest of the world has moved on. Google Apps for Business is gaining real momentum in the enterprise, with recent announcements in the last quarter that regulated organisations such as pharma giant Roche (90,000 employees), Spanish banking group BBVA (110,000 users) and UK government sites such as Hillingdon Borough Council (3,000 users) are switching their email platforms to Gmail.
Organisations like software giant SAP, charity The Stroke Association, food-and-drinks giant Kraft and global law firm SNR Denton have all adopted Bring Your Own Device (BYOD) policies in the last couple of years, while SAP has rolled out more than 2,000 corporate iPads to staff who would previously have used Windows laptops.
All these organisations are taking advantage of the productivity, mobility and collaboration benefits that come from users working with the device that suits them best, rather than a company-issued standard laptop, and from accessing business systems and data in the cloud.
Will companies like Microsoft and Oracle survive into this new era? It might seem unthinkable they'll go under, but few people believed back in 1988 that a company the size of Digital Equipment Corporation could fail within 10 years.
If there's any lesson to be learned from the last IT revolution and Digital's fall, it's that any company taking a head-in-the-sand approach to radical changes in the IT industry or spending its energies launching attacks on the new players emerging in this new era may find itself suffering the same fate. ®