Tag Archives: Market Dominance

IT in Business: Business IT Development: The Advice Was – Make Sure it’s IBM Compatible

Early efforts to sell desktop computing into business were driven by focus on function, the most obvious targets being accounting and payroll.

Business computing had undergone a sea change in the late 1970s. At this point in time it became possible to assemble a hardware package, small enough to sit on a desk, yet capable of delivering effective processing power. The personal computer was born.

The Burden of Choice Simplified

There were many offerings in those early days, each with its own unique selling proposition, but there was little compatibility between the different solutions. A businessman making a poor selection would be faced with expensive data migration after only a short time.

In 1981 Bill Gates gained a contract from computer giant IBM to provide a version of the Microsoft MSDOS operating system for the worldwide marketing of the IBM PC. Compatibility had arrived.

The Marketing Theme – Cut Costs

Secretarial functions such as typing and scheduling soon followed on the heels of accounting in the race to computerise the office. While hardware and operating systems were increasingly compliant with the emergent so called ‘IBM Compatibility’ standards, there were still many choices for businessmen to stumble over in application selection and poor choice would often lead again to expensive data conversion and transfer in the mid-term.

The rapid evolution of both hardware and software offered many tempting cost reduction opportunities for business, especially for those in the SME sector who hadn’t hitherto been positioned to justify the substantial costs incurred by the introduction of computerisation. Now even a small business could balance the cost of a personal computer and software against the savings to be made performing a single business function, such as payroll or sales ledger.

All too often this led to the perception that computerisation equated to personnel reduction, frequently a mistaken assumption as headcount is usually more closely related to redundancy of process than it is to function performance. The idea “buy a computer and sack three people” gradually gave ground to the concept of increased trade by improvement in the speed of business process.

Market Dominance and Control

The IBM decision to back Bill Gates’ operating system for personal computing gave Microsoft an enormous marketing edge over other players and the stolid advice to small businesses entering into computerisation for the first time was “make sure it’s IBM compatible”.

The limits on the technology used by early PCs meant that machines of the day were unable to perform more than a single task at a time. This factor probably influenced to some degree the IBM decision to back the Microsoft product. It seemed at the time that there was no way it could impact on the core IBM market of multi-tasking main-frame and mini-computer operation.

The Hidden Factors

The two factors that no-one foresaw were the amazing lateral thinking that led to the birth of computer networking and the fantastic rate at which technology developed. The idea that limited processing and storage in a single machine could be overcome by linking two or two hundred machines together and allowing them to share the workload, contributed greatly to the development of TCP/IP networking that today runs the whole of the Internet. The dominance of the software market by Microsoft, and the resource hunger of that software, has pushed the hardware manufacturers to greater and greater achievements in terms of processing power and storage. These days a good home PC delivers computing power of a magnitude similar to the business mainframe machines of the early eighties.