although some of you might be a little young to remember this it wasn't that
long ago when ibm was a player in the consumer pc space it's for everybody but
it lives in your room successors to the original ibm pc were common sites in
both homes and offices and their thinkpad line of laptops were positively
iconic and maintain a cult following to this day but in 2005 ibm sold off their
entire pc division to lenovo and these
days big blue no longer makes personal computers instead focusing on analytics
cloud computing and selling mainframes to larger organizations so what happened
that led them to this i mean just imagine if apple stopped making iphones
mcdonald's stopped serving up big macs or taylor swift stopped dating people to
provide fuel for her pop hits oh
that was rude so it turns out the seeds of ibm's downfall in the personal
computer space were sewn well before the early to mid 2000s although the original
ibm pc released in 1980 was very successful due to its relative
affordability and consumers familiarity with the ibm name it wouldn't take long
for its own world-changing invention to start slipping from its grasp you see
ibm originally developed just about all of the components in its pcs themselves
this allowed ibm to initially keep a stranglehold on the pc market a far cry
from what we're used to today where you might find parts from dozens of
manufacturers inside both home built and store-bought computers but as it became
resource and time-consuming for ibm to do everything themselves they started to
include components from other companies notably operating systems such as
microsoft's ms-dos and cpus from Intel
now ibm opening up their platform in this manner made it easier for other
companies to start building systems they labeled ibm pc compatible often at a
lower cost than big blue could do it i like how we're calling ibm big blue big
blue soon enough both pcs and their components were seen as commodity goods
instead of something special that consumers felt compelled to buy
specifically from ibm once this happened ibm's dominance began to evaporate ibm's
original business model which relied on vertical integration i.e doing it all
themselves helped them become a dominant force but was now actively working
against them especially in the pc space as more successful companies were
focusing on keeping their operations narrower for example specializing in
only hard drives or processors instead of manufacturing complete systems of
course other companies such as compaq were also selling complete systems but
they enjoyed more success than ibm as they didn't have to deal with the amount
of sheer bloat that ibm took on from
being such a vertically integrated business and by 1990 many of ibm's
divisions were operating on razor thin margins not just its pc operation making
matters worse was that ibm wasn't exactly raking in the dough from other
manufacturers licensing their technology for pc compatible systems instead
competitors just ended up developing or adopting open standards that cut out ibm
completely as the 1990s dragged on ibm
felt even more pressure from companies like dell who marketed and sold directly
to consumers cutting out the middleman ibm pcs on the other hand were more
commonly found in retail stores like radioshack and like ibm's pc division
they also went the way of the dodo by the time the mid-2000s arrived it was
even harder to make money selling pre-built pcs as fallen component costs
and the perception that the pc was no longer an unattainable luxury meant
margins were slim for many manufacturers but especially for ibm although big blue
ceo cited his opinion that they couldn't do much innovating in the pc space they
were also losing money hand over foot leading them to sell off their pc
operation to lenovo after 25 years in
the industry but there's some good news for old ibm fans lenovo still sells the
thinkpad complete with that little red mouse nub that'll take you on a
nostalgia trip back to 1992 and confuse
you a little along the way speaking of being confused you won't be
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