History of the Computer Industry in One Slide

As the inimitable Yogi Berra once said: "It's tough to make predictions, especially about the future." I have been giving talks recently, including one at Harvard's Kennedy School eGovernment Executive Education Program, where I try to predict the future of IT and how firms and organizations will have to adapt radically or face extinction. A large scale industry shift is underway and its significance is likely to be far greater than people realize.

In looking at the future, it's always worthwhile to understand the past. In my talks about the future of IT, I lead with the following question:

"What paradigm shift in the computer industry brought us here?"

The audience usually provides answers such as: networking, the personal computer, TCP/IP, etc. These were all significant developments but don't get at the seismic shift that led to present state of affairs. Andy Grove in Only the Paranoid Survive not only posed the question but provided the answer.

"Going into the eighties, the old computer companies were strong, growing and vital...But by the end of the eighties, many large vertical computer ocmpanies were in the midst of layoffs and restructuring..."

What happened? In a famous diagram, Grove described the transformation of the computer industry from a set of vertically integrated silos, dominated by companies such as IBM, DEC, Sperry Univac and Wang, to a horizontal stack which made possible modular recombination of cheap components. That was the fundamental transformation in the computer industry that demolished the old computer companies, a number of them permanently. A similar transformation is underway in the computer industry and it will be equally seismic in its consequences. Stay tuned.

Acknowledgment: I came across the diagram in "Designs and Design Architecture: The Missing Link between 'Knowledge' and the 'Economy'" by Carliss W. Baldwin and Kim Clark