IT greats: Innovation is the key to greatness

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IT greats: Innovation is the key to greatness

Computer Weekly Staff

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


Read article: Journey to the future

Read article: Who is the greatest

Read article: Driving forces: Top 10 greatest IT people

Read article: Chips with everything: Hardware top 10

Read article: The soft machine at the heart of IT: Software top 10

Read article: Innovation is the key to greatness: The top 10 organisations


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