IT is one of the only industries that offers the prospect of
growing from start-up to global domination within a few decades,
and few can punish an organisation that makes a mistake as
cruelly.
Yet the choice of the most influential organisations of the past
40 years highlights the importance of innovation alongside the
ruthlessness needed to build a global brand and dominate global
markets.
Apple, Microsoft and Intel were all born in the 40 years since
Computer Weekly first appeared. But IBM, which was launched in
1924, and amazingly can trace its origins from the 1880s, will
forever be a case study in how a company can reinvent itself.
As well as the 10 organisations featured here, readers suggested
internet giant Google, enterprise software firms SAP and Oracle,
and the Free Software Foundation as potential IT greats.
The top 10 organisations
1. Apple
2. Microsoft
3. IBM
4. Intel
5. Xerox
6. cisco
7. Hewlett-Packard
8. Digital Equipment
9. Icann
10. Amdahl
1. Apple: corporate turnaround story makes for an
exciting ride
Few brands have produced the sort of loyalty among its users
than that enjoyed by Apple.
It is barely 30 years since Steve Jobs and Steve Wozniak began
Apple, kick-starting the personal computer revolution from a
garage. Times have changed, but Apple's impact is still felt as its
innovations become mainstream.
This is the company that completely transformed the way people
look at and use computers by developing the mass market for two
groundbreaking technologies originally developed by Xerox: the
graphical user interface and the mouse.
After making their first Apple appearance on 1983's Lisa, the
1984 Apple Macintosh brought these innovations to the mass market.
It was a critical breakthrough for user-friendliness in a world
where computer users had been forced to grapple with a command line
interface. The point-and-click era began with the Mac.
Ease of use - along with elegant, desirable design - has
remained an Apple hallmark. And although the firm's computers have
never been mainstream in IT organisations, Apple's flair for often
dramatic innovation is admired across the business world.
Yet despite its pioneering role and a loyal fan base, Apple lost
out to IBM's PC model and the rise of Microsoft's Windows operating
system because it maintained a tight proprietary grip on its
technology in an effort to maintain total control.
Apple's low point in 1993 saw 2,500 staff laid off, but its
subsequent rise from the ashes has been one of the biggest
corporate turnaround stories in recent years.
Founder Steve Jobs' return to Apple in 1997 began a shift from
an innovative technology firm with geeky fans, to a household name
in consumer electronics, symbolised first by the iconic "Bondi
blue" iMac computer and now by the flagship iPod music player.
Apple's desktop machines have continued to win plaudits for
design and quality, while fans note the security advantage of
machines that attract little attention from malware and virus
developers.
Despite this, the company has never been able to break back into
the corporate desktop market - except in the design and desktop
publishing niche - and its market share remains small.
In July, the company produced its second-best ever quarterly
results, announcing that it had sold 798,000 laptops - up 61% year
on year - just six weeks after the launch of the new Macbook.
Where next for Apple? The company's tie-up with chip maker Intel
and the "halo effect" of the iPod success have combined to lift its
computer sales this year. It is working on iTV - technology to
transfer films and other content from computers to televisions -
seeking to replicate its digital music success with film.
It remains to be seen whether the firm will continue its onward
march in the consumer electronics and multimedia market - and
whether increasing public familiarity with digital media will feed
back into a greater profile for Apple in the corporate market.
Apple devotees are likely to stick with it, though. It has been an
exciting ride.
2. Microsoft: from techie start-up to global business
phenomenon
Words like “ubiquitous” attach themselves to Microsoft. It is
not surprising: Microsoft is one of the biggest brands in the
world, with its Windows operating system and Office productivity
suite familiar to millions of business and home users
worldwide.
When a young Bill Gates snapped up the chance to provide an
operating system, MS-Dos, for IBM’s then new PC in 1981, the scale
of Microsoft’s domination of the field could not be imagined.
But as IBM-compatible machines became the PC standard, the world
opened up for the software start-up firm: cleverly, Gates kept the
rights to licence MS-Dos to PC makers.
Microsoft’s happy knack for making the best of existing ideas
was again manifested with the launch of Windows – with its
graphical user interface designed to rival that introduced by Apple
on its Macintosh. Windows appeared in 1985, a year after the Mac,
but the soaring popularity of IBM-compatible PCs meant it was
Microsoft that cleaned up.
Windows now accounts for about 90% of the client operating
system market. The Microsoft flagship has also made gains in the
server market, creeping up and marginally overtaking Unix last
year.
Microsoft’s grip on the market is double edged, with many
corporate users both fearing proprietary lock-in, and heaving a
sigh of relief that the de facto standards Microsoft has imposed
have lessened the problems of interoperability between applications
and systems.
The firm has built on the dominance of Windows, making inroads
into new markets by bundling new applications into Windows – and
sparking clashes with antitrust regulators in the US and Europe.
But although the European Commission has imposed heavy fines on the
software firm, there is no sign that Microsoft is losing its
combativity – it is set to challenge the fines through the
courts.
The launch of Office in 1989 only added to Microsoft’s pervasive
presence. The company has stepped up its push into the enterprise
application market by encouraging partners to integrate existing
business applications with the familiar Office environment.
New products to support collaboration, mobile working, customer
management and enterprise search are set to follow, as Microsoft
seeks to make the most of its unparalleled user base.
For Microsoft, much hangs on the success of the next versions of
its core products – Windows Vista and Office 2007. But the firm has
already notched up two achievements not often seen in tandem: it
has made a fortune for founder Bill Gates – and it has succeeded in
a smooth transition of power with Gates moving away from his
operational role. Other businesses will envy such success.
3. IBM: industry leader that transformed the way the world
works
Many companies dream of introducing a product that defines an
industry and changes the way the world works; few live up to the
aim, especially when they have already dominated an industry for
decades. But the launch of the PC by IBM in 1982 transformed
business computing and allowed personal computers to become a
mainstay of business and everyday life.
The little desktop machine provided all of 16Kbytes of user
memory – but crucially, it was developed with an open architecture
that set a standard, allowing other manufacturers to produce their
own “IBM-compatible” machines. The new standard meant the modern
desktop computer and software industry could take flight.
IBM’s success sent the fortunes of two other firms rocketing
too: chip maker Intel and the then tiny Microsoft, which developed
the Dos operating system for the new machines.
But IBM’s history of breaking new ground predated the PC – and
has continued as the world’s largest IT company reinvents itself to
maintain its hugely dominant presence.
The company launched as International Business Machines in 1924
and produced tabulating and calculating machines that were then at
the cutting edge of technology for businesses.
By 1944, it had produced the first machine that could execute
long computations automatically, the
50-foot long Mark I. This was followed by the IBM 701, built using
vacuum tubes that were smaller and faster than Mark I’s switches,
allowing it to handle business applications such as billing and
payroll.
IBM’s continued push into new technology produced the first
computer disc storage system in 1957. Then another major leap
forward saw the development of the IBM System/360 mainframe in
the
mid-1960s. The S/360s could run different applications
simultaneously, where previous computers had been custom-built to
fit a specific purpose.
The next decade saw IBM researchers devise the relational
database, while Big Blue continued to develop tools for business
that today are mainstream: laser readers for supermarket checkouts
and early cash machines.
After its initial PC success and market dominance in the early
1980s, IBM began to struggle, losing ground to rival firms. Annual
losses hit £4bn in 1993.
But the turnaround in IBM’s fortunes over the past decade has
been impressive, with the company – ever focused on the corporate
market – pitching to provide “integrated business solutions”,
tapping into the wide-ranging strengths of its huge portfolio of
hardware products, software, services and expertise.
Big Blue’s change of direction was sealed in 2004 when it sold
off its PC business to Lenovo, concentrating on its more lucrative
software and services arms, which in turn have been developed by
canny acquisitions.
There are no signs of any slowdown in the pace of change. IBM is
investing £3bn in India – home to an eighth of its workforce – as
it moves to outflank the local outsourcing market. And IBM’s huge
contribution to open source suggests it is keeping a sharp eye not
only on new technologies, but new business and development models
for the future.
4. Intel
Chip maker Intel has succeeded in an unlikely task. The producer
of the most vital part of a modern computer has managed to make its
brand a household name. Its 1991 “Intel Inside” campaign created a
new public awareness of the microchip.
But Intel has been inside for a long time: since the company
secured the contract to provide chips for the groundbreaking 1981
IBM PC, it has powered a huge proportion of the world’s computers,
earning its title as the world’s largest chip maker.
Even under assault from rival AMD, Intel still holds 72.9% of
the market for server and PC chips.
The company was formed in 1968 by former Fairchild Semiconductor
staff Bob Noyce and Gordon Moore and has been rolling out
breakthrough technologies since the start.
Intel began with random access memory (Ram) products, launching
its 1103 DRam (dynamic Ram) silicon chip in 1970. The silicon
product was a bestseller, leaving its magnetic core memory
predecessors behind, and the success set Intel firmly on its
feet.
New developments followed thick and fast, with Intel launching
its first microprocessor in 1971. In 1974 it launched the 8080 chip
– a powerful general purpose microprocessor that was adopted in
everything from traffic lights to cash registers and powered one of
the first PCs, the Altair 8800.
Intel’s developers kept churning out the chips, introducing the
8086 16-bit microprocessor in 1978. The end of the decade saw Intel
enter the Fortune 500 list of leading companies.
Then came the breakthrough deal with IBM, which saw Intel’s 8088
chip selected for Big Blue’s first PC. Manufacturers making IBM
clones seized on Intel technology, propelling the firm into a
dominant position. By 1994 Intel could claim to power 85% of all
desktop machines.
Today, the Centrino mobile processor aims to capitalise on the
growth of Wi-Fi. And a recent deal with Apple will see Intel chips
inside every Mac by the end of next year.
5. Xerox
To the general public “Xerox” means to photocopy, and the
company now bills itself as a “document management” specialist. But
where would Apple be without Xerox? Its famous Palo Alto Research
Centre developed the graphical user interface (GUI) and the mouse.
Steve Jobs saw the commercial potential and – following the usual
financial negotiations – made IT history.
6. Cisco
When the founders of probably the world’s best known network
equipment supplier were driving to register their company, they saw
San Francisco’s Golden Gate Bridge and at a stroke had both their
name and their logo. Cisco was not the first to develop a router to
link one network to another, but it boasted the first
multi-protocol router to allow previously incompatible computers to
communicate.
7. HP
Founded in a garage on New Year’s Day 1939 by Bill Hewlett and
Dave Packard, HP has played a key role at many a twist and turn of
IT history over the past 40 years, from electronic calculators
through personal computers to digital imaging and beyond. No wonder
that garage is one of California’s official historic landmarks.
8. Dec
It was mini-mania in the 1960s, with the miniskirt, the mini car
and inevitably the minicomputer. Digital Equipment, or Dec as it
was better known, was the giant of the mini world. Having kicked
off the whole show with the PDP-1, Dec went on to clean up with the
PDP-8, PDP-11 and Vax. Soon it was second only to IBM in size.
9. Icann
Without the Internet Corporation for Assigned Names and Numbers
sorting out domain name and IP address issues, the web might be
chaos. But not everybody is happy with the organisation’s work.
Some object to Icann’s historic links with the US government,
although not many would go as far as those advocating a domain
names free-for-all.
10. Amdahl
“Never let your best talent walk” is an adage that should have
been remembered by IBM when Gene Amdahl, designer of the
groundbreaking System 360, left in the late 1960s to go it alone.
As one former user says of Amdahl’s IBM-compatible machines, “They
were cheaper, they were better technology and they were orange –
that gave IBM something to think about when they visited you.”
Leo the British lion is readers’ cup of
tea
J Lyons and Company has a place in the hearts of Computer Weekly
readers. It is not their parents’ tales of tea shops on London’s
street corners, but the remarkable foresight of its directors in
building the first business computer (certified by Guinness World
Records) – Leo (Lyons Electronic Office) – which was rolled out in
November 1951.
Designed and built by John Pinkerton under the leadership of
John Simmons, Leo handled the company’s accounts and logistics.
The system was taken over by English Electric in 1963, which
developed the highly successful Leo III used at blue-chip firms
across the world right up into the 1980s.
Your big names
Outside the main choices for greatest organisation, the most
popular of your suggestions were:
1. Sun Microsystems
2. AMD
3. Google
4. Oracle
5. Dell
6. Free Software Foundation
7. AT&T/Bell Labs
8. Massachusetts Institute of Technology (MIT)
9. World Wide Web Consortium
10. SAP
11. Red Hat
12. Nokia
13. McAfee
14. Fujitsu
15. Novell
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