DEC's demise may offer a lesson for Microsoft

Microsoft has heaped so many stresses onto its corporate body in the past 10 months that it will have to beat almost insurmountable odds in order to remain viable, a business strategist said.

But Microsoft is by no means unique in the IT industry. "There's something endemic in technology companies that they are not built to last," said Peter DeLisi, founder and president of Fremont, Calif.-based Organizational Synergies.

DeLisi wasn't predicting Microsoft's collapse, but he does have firsthand knowledge of how a high-flying tech company can crash to earth: He spent 16 years at Digital Equipment Corp. (DEC), which was the world's second-largest computer company in the late 1980s but had disappeared by 1996, when Compaq bought it at a fire sale price of $9.6 billion.

In 1998, DeLisi wrote a paper about DEC's decline, and his insights have led some current and former Microsoft employees to draw parallels between their employer and DEC. The paper was mentioned numerous times by commenters responding to a post about Microsoft CEO Steve Ballmer's retirement in the blog Mini-Microsoft, which is purportedly written by a current Microsoft employee.

DeLisi was hesitant to cast Microsoft as a DEC doppelganger because he has never worked at Microsoft, but he did say that the company has stacked the deck against itself.

The biggest problem Microsoft faces is its search for a new CEO, said DeLisi, noting that it may be hard to find the right person to lead the company through these challenging times.

This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.

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