Recently, popular Apple blogger John Gruber has been on a mission to explain why, exactly, tech companies like Apple don’t need any stricter government oversight or be subjected to stricter rules and regulations. He does so by pointing to technology companies that were once dominant, but have since fallen by the wayside a little bit. His most recent example is IBM, once dominant among computer users, but now a very different company, focused on enterprise, servers, and very high-end computing.
Gruber’s argument:
It wasn’t too long ago — 20, 25 years? — when a leadership story like this at IBM would have been all anyone in tech talked about for weeks to come. They’ve been diminished not because the government broke them up or curbed their behavior through regulations, but simply because they faded away. It is extremely difficult to become dominant in tech, but it’s just as difficult to stay dominant for longer than a short run.
Setting aside the fact that having to dig 40 years into the past of the fast-changing technology industry to find an example of a company losing its dominance among general consumers and try to apply that to vastly different tech industry of today is highly questionable, IBM specifically is an exceptionally terrible example to begin with.
I don’t think the average OSAlert reader needs a history lesson when it comes to IBM, but for the sake of completeness – IBM developed the IBM Personal Computer in the early ’80s, and it became a massive success. Almost overnight, it became the personal computer, and with IBM opting for a relatively open architecture – especially compared to its competitors at the time – it was inevitable that clones would appear.
The first few clones that came onto the market, however, ran into a problem. While IBM opted for an open architecture to foster other companies making software and add-in cards and peripherals, what they most certainly did not want was other companies making computers that were 100% compatible with the IBM Personal Computer. In order to make a 100% IBM compatible, you’d need to have IBM’s BIOS – and IBM wasn’t intent on licensing it to anyone.
And so, the first clones that entered the market simply copied IBM’s BIOS hook, line, and sinker, or wrote a new BIOS using IBM’s incredibly detailed manual. Both methods were gross violations of IBM’s copyrights, and as such, IBM successfully sued them out of existence. So, if you want to make an IBM Personal Computer compatible computer, but you can’t use IBM’s own BIOS, and you can’t re-implement IBM’s BIOS using IBM’s detailed manual, what are your options? Well, it turns out there was an option, and the company to figure that out was Compaq.
Compaq realised they needed to work around IBM’s copyrights, so they set up a “clean room”. Developers who had never seen IBM’s manuals, and who had never seen the BIOS code, studied how software written for the IBM PC worked, and from that, reverse-engineered a very compatible BIOS (about 95%). Since IBM wasn’t going to just hand over control over their platform that easily, they sued Compaq – and managed to find one among the 9000 copyrights IBM owned that Compaq violated (Compaq ended up buying said copyright from IBM).
But IBM wasn’t done quite yet. They realised the clone makers were taking away valuable profits from IBM, and after their Compaq lawsuit largely failed to stop clone makers from clean-room reverse-engineering the BIOS, IBM decided to do something incredibly stupid: they developed an entirely new architecture that was entirely incompatible with the IBM PC: MCA, or the Microchannel Architecure, most famously used in IBM’s PS/2.
In the short run, IBM sold a lot of MCA-based machines due to the company’s large market share and dominance, but customers weren’t exactly happy. Software written for MCA-based machines would not work on IBM PC machines, and vice versa; existing investment in IBM PC software and hardware became useless, and investing in MCA would mean leaving behind a large, established customer base.
The real problem for IBM, however, came in the long run. Nine of the most prominent clone manufacturers realised the danger MCA could pose, and banded together to turn the IBM PC into a standard not controlled by IBM, the Extended Industry Standard Architecture (with IBM’s PC-AT of the IBM PC renamed to ISA), later superseded by Vesa Local Bus and PCI. Making MCA machines and hardware required paying hefty royalties to IBM, while making EISA/VLB/PCI machines was much cheaper, and didn’t tie you down to a single, large controlling competitor.
In the end, we all know what happened – MCA lost out big time, and IBM lost control over the market it helped create entirely. The clone makers and their successful struggle to break it free from IBM’s control has arguably contributed more to the massive amounts of innovation, rapid expansion of the market, and popularity and affordability of computers than anything else in computing history. If the dice of history had come up differently, and IBM had managed to retain or regain control over the IBM PC platform, we would have missed out on one of the biggest computing explosions prior to the arrival of the modern smartphone.
To circle back to the beginning of this article – using IBM’s fall from dominance in the market for consumer computers as proof that the market will take care of the abusive tech monopolists of today, at best betrays a deep lack of understanding of history, and at worst is an intentional attempt at misdirection to mislead readers.
Yes, IBM lost out in the marketplace because its competitors managed to produce better, faster, and cheaper machines – but the sole reason this competition could even unfold in the first place is because IBM inadvertently lost the control it had over the market. And this illustrates exactly why the abusive tech giants of today need to be strictly controlled, regulated, and possibly even broken up. IBM could only dream of the amount of control companies like Google, Apple, and Amazon have over their markets and users, and we are far, far beyond the point where the “market” can even dream of taking care of them.
There are other examples in technology that unfolded similarly to the story of IBM. The browser wars are sometimes cited as examples of tech giants not needing any regulations or oversight either, but just like how the clone makers could only beat IBM by breaking IBM’s control, browser makers – specifically, Mozilla – could only challenge Microsoft’s Internet Explorer because for all its countless faults, Windows is a fairly open platform, and Windows users were, at the very least, free to use and set as default any browser they wished.
Imagine if Microsoft had done an iOS, and had not allowed Windows users to use anything but Internet Explorer (or Internet Explorer skins). Do you honestly believe Mozilla would’ve stood a single chance in hell of breaking Internet Explorer’s stranglehold on the browser market?
There are countless examples from the past, in all kinds of industries, where monopolised or otherwise strangled markets had to be forcibly fixed by governments or the legal system. Take, for example, the strangehold the Wright Company and the Curtiss Company had on the airplane industry at the onset of World War I in the US – so tight was their control, that the production of new airplanes had all but stalled, and technological development in aviation in the US had come to a standstill. The United States government was forced to step in and force the industry to set up a patent pool every manufacturer was forced to join, thereby dislodging the market.
IBM lost its dominance exactly because the market became more open, less controlled, and easier to enter. By using IBM’s story as an argument, you’re arguing that we need more openness in the market, not less – and much like IBM 40 years ago, Apple, Google, Amazon, and others are not going to relinquish that control willingly.
History has taught us that if we want more innovation, more competition, and more choice, we need to curtail the big technology companies, and I think we’re well past the point where forced break-ups should be on the table.
Because I really wouldn’t want to live in a world where the IBM PC was the only game in town.
Can ya rephrase that in 2 sentences?
Anyway. Apple should just be left to run wild and bring down the US. Everywhere also only idiots care for it. (these days).
Also microsoft did IOS, it was win mobile 7/8/10. I likes win mobile before that (and win ce before that).
Apple IOS was just new and different and not a logical prograssion to some idiots.
(it was also done better before ios, but hey ho).
Thankfully outside the US it tanked and never gained dominence due to beign a non 3G device at launch. Obviously the US was a 3rd world (yes I know) country at the time.
Sure, 3G is a thing, the UI was appealing, but the price at launch and the exclusive carriers’ plans where just out of reach for many customers.
Plus the lack of mms and copy/paste was another thing, when everybody else could do it for years.
Great article. But no need to debunk daringfireball. He’s literally a professional Apple shill and his website doesn’t even allow comments, for good reason. People would dismantle his ridiculous strawmen instantly and everyone reading would know what a fraud he really is.
If you Google “daring fireball” the first result is “daring fireball with comments” which will take you to a Google Chrome addon that adds a comment section to daringfireball. It’s really great and I highly recommend it.
Damn shame that we have to credit him for Markdown though. It really seems like the kind of thing where, if the dice had fallen just a little differently, we could credit someone more respect-worthy with the flavour of lightweight markup everyone uses now.
You have to separate the man from his creation, respect the work.
Good or merely adequate? I don’t think anyone would buy his paintings if it wasn’t for the fact he infamously died in that bunker.
Markdown wasn’t the only lightweight markup at the time. In fact, various GitHub web inputs used to support Markdown, Textile, and one other I’m forgetting.
Also, AsciiDoc, reStructuredText, and Textile predate Markdown by two years (2002 vs. 2004).
If you go back further, you find stuff like the *emphasis* convention used on IRC that some IRC clients would render in boldface.
Not to mention Perl’s Plain Old Documentation which goes back to at least 2000 and feels sort of like an intermediate evolutionary stage between those an the earlier roff markup used for manpages with a bit of JavaDoc or LaTeX influence thrown in.
The concept of lightweight semantic markup which can be translated into HTML was exploding at the time and Gruber was just in the right place, at the right time, with the right reach and offering to take off.
John Gruber is a hopeless shill. He’s the same guy that tried to justify Apple simultaneously kowtowing to the Chinese government and posing as a privacy champion as “well, they had two choices, sticking up to their principles and giving up the Chinese market; or relenting and allowing China to store iCloud data” (completely ignoring the third choice: Apple stopping lying so blatantly about how much they supposedly care about their users’ privacy)
He won’t ever change, he needs to keep following the party line or won’t ever get to interview Craig Federighi again.
Fortunately, only the most deluded of Apple fanboys still listen to him these days.
Regulation occurs because of an inablity for the “market” to function. As for what the “market” is that answer depends on who you ask. It’s also not confined to big tech as some would have you believe. There are countless examples of the positive application of regulation in dozens of other spheres.
The IBM PC BIOS copyright issues really only exists in the US. The so-called “clean room” technique is not required in other jurisidictions.
I’m a big fan of open standards.
Seems to me that IBM didn’t really lose, as much as they realized their high level of engineering, and hence high cost, wasn’t a valid way to keep in the consumer grade market of PCs which were all a race to the bottom. It’s the only reason Apple still exists, because they have created the illusion that they are such a better (so higher priced) build, solution, etc than a normal Windows PC. But much like alcoholic beverages, you get what you pay for. Spend 2 grand on a laptop, whether it’s Apple or Asus, it’s going to be pretty good. It’s just that Apple doesn’t sell at the lower price points as Dell, etc, so they get that brand loyalty and illusion of quality.
IBM did the same thing and mostly priced themselves out to a point they don’t care, and then sold off the consumer side to Lenovo. Hell the Thinkpad I have in my possession was ~4000 in the late 90s, and it’s a tank. While IBM did lose their monopoly over the PC, and anyone who lived through the 80s and 90s remembered they were called IBM Compatibles long before they were referred to as PCs as a more generic term (considering PC just means Personal Computer, and all of the Amigas, STs, C64s, A8s, etc were also PCs). Now we’re stuck with trying to identify computers differently by architecture vs brand…
I have no idea. I’ve owned an Apricot and Archimedes. They weren’t cheap and there was nothing wrong with their engineering.
I’m happy with my Lenovo Thinkpad. It has a real keyboard and 15″ screen and built like a brick and user maintainable. The dock is pretty funky too. I also have a spare Thinkpad and a spare motherboard and spare keyboard which is enough spare parts to keep going for another 10-20 years. I bought all this used in “as new” condition for less than an equivalent specified single Apple or Dell laptop.
I’m not saying what wine I drink in case it gets too popular and the price goes up but I’ll just say it’s the best grape press and costs less than what most people drink so I get better quality for less. Some high street retailers have very good buyers too. I was doing some cooking which required white wine so bought a Chardonney the shop manager recommended. For lb6 it was more like a lb12 or lb18 bottle of wine. I also have a skirt which I bought new off Ebay for about lb8 which a fashion photographer friend thought was made of silk and she opined it was something she would wear. It’s actually polyester but the dye is very good. She had a good eye too and the Zara skirt she wore was something she grabbed from a charity box. The thing is a lot of people don’t have much of a clue what they see when they see it.
Oh, you also neglected to mention OS/2 as part of IBM’s efforts to recapture the market.
https://www.theregister.com/2012/11/27/the_os_wars_os2_25years_old/
…this one about OS/2 is also fun but not as directly relevant:
https://www.theregister.com/2012/11/23/why_os2_failed_part_one/
I feel that among other things sideloading apps on iOS, not owing a company 30% in advance if you want a job in programming and having the right to repair the device you bought. By a person that was educated by the state to be fit to repair such device. Pure basics that anybody saying otherwise, or saying just wait another 25 years, to sort itself out. Well, no.
Those of us who were around at in the early 80s know Gruber’s claims are absolute BS. The IBM PC was an expensive niche machine that sold in relatively small numbers (peaking at 750,000 units) in 1984). It never had more than a single digit percentage share of the ‘personal computer’ market which covered everything from the ZX Spectrum to extremely expensive Unix workstations.
The ZX Spectrum were “home computer,” and “workstations” were well… “workstations.”
The PC literally defined the “personal computer” segment.
The IBM PC was an expensive niche office machine that sold in low numbers – it didn’t define anything. Without the clones it probably would have disappeared without a trace in the mid 80s because competitors made cheaper and better machines.
The only advantages the PC had were IBM support and a good range of business software. It was pretty much useless for anything except office tasks as it had a monochrome screen and no sound. The IBM PC sector took another decade and the rise of the clones (and add on hardware such as GPUs and sound cards) to make any real impact.
Whilst i admit that things like the C64 and ZX Spectrum are indeed a category of their own, machines like the Commodore PET and Apple ][ are much more “Personal Computer” like than “Home Computer”. The PC was a category well before the IBM PC came to market, it’s just the UIBM PC was reasonably high specced at the time. Even knee-jerk reaction competitor machines like the DEC Rainbow and Tandy 2000 struggled to outperform the IBM PC
The IBM PC only had ‘high’ specifications if you bought the very expensive versions with high priced options such as hard drives and more memory. The $1500 base model from 1981 had just 16K of RAM and a single floppy drive. It was as slow as molasses and totally outclassed in many ways (sound and graphics) by far cheaper machines like the C64. [The C64 outsold the PC by a order of magnitude.]
But the C64 was still limited by it’s 16 bit address bus. Sure, it shipped with more memory, but the IBM PC could address more memory once you remortgaged your house to afford it. It’s also worth remembering that the C64 was predominantly a games machine, where high performance graphics are required, whereas the PC was primarily a business machine where graphics mainly consisted of the odd graph here and there.
When it came to performance, the DEC Pro350 could outperform the IBM PC in most ways, including supporting up to 4MB RAM, but was way more expensive price-wise. The same can be said comparing the PC to the C64. Price vs performance was a big thing, and features like hard disk support, larger addressable memory space and 80 column support really sold computers in the early 80’s
The PC was a good middle ground. Decent performance, good feature set, expandable, and reasonably cheap compared to other business machines
The IBM PC is to the Personal Computer like the iPhone is to the smartphone.
Defining a market segment does not imply creating said segment or even being first to market. There were other Personal Computers before the IBM PC. But our expectation of what a PC is was shaped and defined almost completely by the IBM PC architecture.
I have no idea why some people are having such a hard time grasping such a basic concept.
When you say Personal Computer now, we think of something that is derived from the IBM PC. Not an Apple II or any of the obscure proprietary systems that went nowhere.
Just like when we say “smartphone” we think of something that derived from the original iPhone package.
javiercero1,
Actually I always considered apple computers to be “personal computers” too. Apple’s marketing campaigns tried to differentiate them “Mac vs PC”, but in my head it always sounded weird because to me macs are personal computers too.
The modern slabs of glass definitely resembles iphone v1, but when I think of “smart phones” I actually think of nokia first. I guess it’s different for everyone.
The PC didn’t define anything, it was a logical follow-up of the many CP/M-compatible computers.
That moment when you realise that if software patents and DMCA existed back then, the BIOS reverse engineering success story wouldn’t have happened, because it would’ve been illegal.
kurkosdr,
+1, so true.
The legal environment has dramatically hurt competition. Patents are by definition legal monopolies, it may be necessary to reevaluate their utility to industries where their harm can outweigh their value. Especially when the net result is less competition and less innovation.
This article is almost comically incorrect—not about IBM’s loss of control over the PC market, but over why IBM was considered a monopoly in the first place. Its dominance was first and foremost in the mainframe sector, and it held that position from the early 1960s to the mid-1990s. They were considered particularly horrible in the 70s. The trend toward smaller computers, first with DEC’s minis and later with a much wider variety of micros, subverted Big Blue’s control moreso because IBM was complacent than anything else. https://en.wikipedia.org/wiki/BUNCH
Thank you. IBM’s dominance was always in the “large systems” marketplace, which it held since the beginnings of commercialised computing. Their market dominance was, and still is so strong in that sector that even modern IBM mainframes have a degree of compatibility with machines dating from the 50’s. The market has indeed shrunk over time, with most companies computing needs migrating to minicomputers (in the late 70’s, 80’s) and later to more commodity workstation/server hardware in the 90’s to today. But even today, if you need a “big iron” mainframe, IBM is who you buy from.
Yeah, IBM knew Mainfraimes would be profitable for a long period of time, and that they would be chosen less and less by new companies, which is why they created the first PC. The PC’s were basically a short term success, but long term failure, so they went back to focusing on mainframes.
I don’t know why so many IBM things are fading and failing to catch on. Maybe classic Xerox parc syndrome of failing to capitalize on great inventions.
Much of it is due to being late to market in most segments it’s tried to enter. Even today, IBM seem to struggle to compete in the AI space against companies like Facebook, Google and Microsoft.
I think it’s partly due to the stuffy corporate vibes that IBM gives off, as well as the worrying lack of job security, as they seem to want to “downsize” nearly every 6 months. Good talent would rather work in a more modern organisation like Google where layoffs are rare than work in a stuffy shirt-and-tie organisation where you might get canned next week.
I insist, Guber should never be a reference. He is and will be an Apple super fanboi. He is the one that writes the agenda for the rest of Apple’s fainbois. If he is writing something about IBM, it may be to defends any kind of Apple position against an US monopoly lawsuit today. He will always defend Apple position, and he is an expert justifying why Apple should control the apps in an App Store, define which apps you can or can not install, and why it is good to live in the walled garden inside Apple.
If someday Apple fails his tax paying and got sue, he would show up defending why Apple is the only company on earth that should not pay taxes. He will invent something in the “reality distortion field” style used by his icon.
Gubber is so fanatic that other fanbois started calling Steve Jobs (when he was alive) the fake John Guber, since sometimes Steve failed to be as Apple fanatic as John.
When Gruber writes something, the next day you see all Apple fanbois saying exactly the same.
It’s true that if we leave a criminal alone, the criminal will eventually fade away. The problem is that there will be no deterrence to crime. Crushing competition using antitrust violating practices is a crime. Just because criminals eventually fade away is no justification to allow them to commit crimes against others.