1967 Shows The Past Isn't Prologue

If you've got top technology and are attracting top talent, you're a shoo-in for future success as an IT vendor, right? Maybe. Using

the past to predict the future sounds like a good idea, but it doesn't always compute.

Today, there's a lot of hand-wringing about the dominance of Microsoft and Cisco Systems, and much of it is based on how powerful those companies have been virtually since their inception. Many people believe that their monopolies will persist indefinitely. And there's some history to support those concerns. For example, 35 years ago, IBM was crushing its competition with its new 360 series mainframe, giving rise to its eventual antitrust problems.

The popularity of the 360 system prompted aggressive searches for IT talent by IBM, not unlike those of recent years by leading IT vendors. Indeed, advertisements in a 1967 issue of The New York Times tried to lure the best and the brightest to work as 360 and Cobol programmers - as long as they possessed the ability to do block diagramming.

Predicting IBM's continued success back then would have been a snap based on its storied history and its dominant market position, especially if you looked at the woes of its competitors at the time.

General Electric was behind IBM in technology and was getting hammered in 1967 by somber reports of bugs in its 600 series computers. There were so many problems that the machines were recalled and GE's French partner, Bull, stopped selling them altogether. Suggesting then that GE's long-term prospects in computing were dim wasn't hard. But to imply that the company would have fallen on hard times as a result would have been dead wrong.

Data communications is one area where we learn that an impressive business history and leading position in the present aren't enough on which to bet the future. (Steve Ballmer and John Chambers, take note.)

In 1967, Western Union was hailed as the leader in data communications in the U.S., a role it lost quickly. This despite the company's rich history and aggressive recruitment of top technical talent, luring engineers with a progressive work environment and "a shirt-sleeve approach to systems problems with patience and imagination." That sounds groovy, and the promised 35-hour work week, with no travel, came with a starting salary of $12,000. The "outstanding and understanding" supervisors at Western Union possibly offset the wage scale. That and no block diagrams. Still, the company's data comm ascendancy was brief.

History proves that having leading technology and attracting top talent can guarantee business success. Or not.

Pimm Fox is a freelance writer in San Francisco. Contact him at pimmfox@pacbell.net.

Copyright © 2002 IDG Communications, Inc.

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