The Slow Death of Microsoft, HP, Cisco, and Intel: Where Do We Go From Here?

I had a relative who made his fortune opening television stores. In those heady days of early color TV, he made his mark by being The Expert when it came to RCA color TVs. Of course he commanded a premium for that knowledge. He prospered until Japanese manufacturers entered the market. Try finding an American manufacturer of TVs today, and you’ll find the search futile.

The world changes right before our eyes, yet few of us are consciously aware of it at the time. It’s only in retrospect that we are aware. Remember the boom days of the PC industry during the 1990s? Intel and Microsoft formed a partnership that resulted in growth that probably astonished their own executives. Of course it helped that Apple didn’t know what the hell it was doing. John Scully will go down as clueless in the history books because he chose NOT to license the Apple to other manufacturers. Instead, he kept margins high and sales low.

When I was a technology analyst and consultant, I marveled at how much discontent there was among Cisco’s customers. They grumbled while they continued to pay what they called the “Cisco premium” for equipment that could be purchased much cheaper from competitors. Of course, because Cisco was a proprietary system, you couldn’t really mix and match manufacturers even though rival products far out performed Cisco products. Customers confided to me that they were “in too deep to get out.”

During the boom days I offered some advice to the CEO of HP which she ignored. I suggested that the major advantage HP had was that it offered a wide range of different kinds of equipment that was far broader than its competition. Why not create an advantage for customers who bought different kinds of HP equipment by making them work so well together that customers would want to buy all HP equipment. HP continued selling its product as if they were unrelated. The result was that HP lost its short-lived market advantage in PCs, never found traction in the consumer market, and staggered in the printer marketplace. Today the company is fighting for its identity. It used to be known for “high prices and high performance.” Today, there really isn’t anything special to distinguish its equipment.

Microsoft never saw the Internet coming and then was late to the tablet market. Its mobile products never took off, and now people have viable choices other than purchasing Windows-based machines and running Office. It just reorganized, but to me, it looks like rearranging the deck chairs on a very well known ship that ran into trouble.

Big companies don’t collapse over night; they die by a thousand cuts, bleeding ¬†over a number of years that are filled with layoffs and reorganizations. Take Ebay. It looked invincible for a while until other companies offered auction sites that cost less. It turned to PayPal to keep its profits up, but today PayPal faces a lot of far more nimble competitors.

My point is that these changes happen all the time, but we don’t pay much attention unless we’re playing the stock market and worrying about our investments. I have a number of ex-colleagues who used to be analysts and experts that relied on these huge companies for consulting projects. Many of these people now have one-person consulting firms and are barely getting by. The many new startups on the block just don’t have money for high-priced consultants.

I used to have a very good record for predicting the future, particularly in technology. My current prediction is that mobile technology will become not just ubiquitous, but built-in. People will accessorize with mobile products, whether that means a built-in Internet chip in their heads, Google type glasses, or small earrings that serve as telephone receivers. Virtual reality gloves will mean that people will have access to a keyboard and monitor the size of everything they view. Devices won’t need much memory, because the cloud will be available everywhere, buttressed by very high-speed wireless links. That means that almost everyone will be connected all the time.

I read recently that 25% of people under 30 text while making love. It will be awhile before you see that in a movie, but it is happening, and it does reflect how our culture is changing. ¬†There won’t be any privacy anywhere.

When you think of that kind of future, it makes reading Pride and Prejudice even more enjoyable because it hearkens back to a time when relationships developed over months and years instead of minutes and privacy was cherished. If Jane Austen wrote her novel today, her heroine would be tweeting the entire time. She would Google men who interested her and spend time looking at their Facebook pages.

So, while you might think of the huge technology companies as dinosaurs who changed too slowly to flourish in a changing landscape, note the effect of changing technology not just on companies but on individuals. We’re far different today than we were in the 1990s. We have far less patience, demand far faster responses from everyone we know, and expect Wi-Fi everywhere we go. We expect technology to cost less every year and do far more. We want our technology to be intuitive and not require a steep learning curve. We’re not willing to wait while a Microsoft, an IBM, or Intel decides what is best for us. We want a manufacturer to prove its superiority and not really smugly tell us that we’re trapped because we already have so much of its proprietary equipment, we can’t economically move to a different manufacturer.

Not all big technology companies fail to adapt. IBM used to be known for its mainframe computers, but today it is a software and services company that is doing very well. It was nimble enough to morph into a different company fast enough to stay relevant.

The pace of life is much faster now than in any other time in history. We expect instant response when we place an order online. Amazon has been experimenting with same day delivery as a result. We expect our movies to catch our interest in the first five minutes. No more slow-developing French or Swedish movies for us! We expect authors to capture our attention within the first 10 pages. Many literary agents don’t read past the first 10 pages when determining whether or not to add a client.

That’s one reason why cartoon-like superheroes are so popular in movies today. Because people know about them from earlier movies or from reading about them in comic books, there’s a comfort level and familiarity with these characters which means that viewers will give stories a bit more time to develop. They already know all about the superheroes, so producers don’t have to provide much background; they can get right to the explosions, chases, and fights that make these movies so popular abroad. European and Asian distributors love the fact that such movies require such easy dubbing. Who cares if the superhero’s lips aren’t in synch with his French when the camera is focusing on the superhero fighting a super villain?

Of course it is possible to move too quickly. If you speed-read a novel and then can’t remember the name of the main character, you’re not really reading. If you Tweet constantly, then you’re not really living your life; instead, your making the entire world a voyeur, forced to watch you go through the motions of living. If our film industry and our publishing industry are reduced down to the lowest common denominators because people have little patience with character development, then we’ve lost something very important. Keep that in mind the next time you hear a beep and can’t determine which of the half dozen mobile devices you own is trying to remind you of something urgent.

 

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