[12251] in Commercialization & Privatization of the Internet
Re: NII and Reality
daemon@ATHENA.MIT.EDU (Mark Stahlman (via RadioMail))
Wed May 11 14:34:59 1994
Date: Wed, 11 May 1994 06:56:50 PDT
From: Mark Stahlman (via RadioMail) <stahlman@radiomail.net>
Cc: com-priv@psi.com
To: baer@jessica.stanford.edu
>>Since every major computer technology driven economic opportunity in the
>>past 30 years has come from startup companies, how are the startups being
>>represented at this conference? I'm a fairly well known analyst and
>>commentator on these issues and I'm very frustrated at the extremely low
>>level of reality awareness in much of the discussion around the NII.
>>
>Didn't IBM standardize the PC? Didn't Intel and Motorola build the chips?
>
>--Paul Baer
> BARRNet
In 1981, a group of IBM "wild-ducks" selected startup Microsoft's operating
system (after trying to get startup Digital Research's CP/M OS) and
faltering memory house Intel's microprocessor (although IBM corporate had
selected Motorola's design). Then, IBM had to purchase 20% of Intel to
keep them alive. The team leader at IBM put his badge on the table and
pledged to introduce the machine in one year or he would quit -- after five
separate efforts by "mainstream" IBM groups had failed to bring under
$5000 machines to market.
After IBM fired it's very non-corporate PC boss in 1984, the company lost
whatever "control" it had in the market and startups like Compaq, Lotus,
Apple, Businessland and hundreds of others built the PC industry -- an
industry that every established mainframe and minicomputer vendor miserably
failed in. While IBM's early role was important, it neither contributed
the technology nor the (more valuable) economic model with which the PC
industry has prospered -- startups did all of that. Furthermore, IBM which
has publically admitted that it's PC business has never been able to
sustain the profitablity of its major PC competitors. (I've written a
fairly detailed piece on all of this entitled "Why IBM Failed" which was
published in the March 1993 issue of Upside after being pulled by the
Harvard B-School faculty from the cover of HBR).
There is no greater example of the crucial economic need for unfettered
entrepreuerial market access than the personal computer industry. It's
recent and very accessible history (the billionaires are still in their
thirties) should give serious pause to anyone who contemplates assisting
federal officials with interventions into future technology driven markets.
Mark Stahlman
New Media Associates
New York
stahlman@radiomail.net
