Microsoft Office's domination takes form
If you had a PC on your desk in 1986, chances are you were writing or crunching numbers on either WordPerfect or Lotus 1-2-3. Fast, lean, and full-featured, these programs were among the best that DOS had to offer. They were so good, in fact, that few businesses would dream of switching to the lacklustre alternatives from Microsoft.
Unfortunately, neither Lotus nor WordPerfect anticipated the success of Windows. They assumed that applications would dictate users' choice of operating system, not the other way around. As users began clamouring for GUI-based software, Microsoft was quick to fill the void with Word and Excel.
By 1990, Microsoft was shipping both programs, along with the newly introduced PowerPoint, in a bundle it called an 'office suite'. Compared with the single-purpose, DOS-based software sold by Lotus and WordPerfect, Microsoft was giving Windows users a better deal. In the end, the former market leaders may have delivered more functions, but their decision to forego early support of Windows was a costly one.
Louis Gerstner resurrects IBM
It had once been the behemoth of the computing industry, but by the time Louis Gerstner became CEO in 1993, IBM was literally falling apart. Having posted a $US4.97bn loss for 1992, the largest in American history, and with mainframe sales dwindling, senior management had begun spinning off business units to free them from the Big Iron anchor around their necks.
Gerstner put a stop to that. Consolidating and streamlining IBM's various divisions, Gerstner expanded IBM's software business and revitalised its corporate culture. But his most crucial move was to shift IBM's focus from products to services. Today, IBM's Global Services division remains one of its strongest earners, pulling in $15bn in revenue for 2007.
Equally important, IBM's new direction paved the way for countless other tech companies, including open source vendors who rely on support revenue to underwrite free software. From the brink of insolvency, Gerstner successfully steered Big Blue into a leading position for the internet age.