Late night tweetstorm addendum to earlier series on unbundling and rebundling: Younger followers asked me to expand on DEC/Sun/Microsoft unbundling: older history, therefore useful to study as precedent for our time.
Once upon a time (1950s-1960s), businesses mostly bought computers from IBM, and IBM also bundled in all the software & services you’d need. IBM bundled offerings were extremely expensive, while demand for computers spread to departments and smaller businesses who had less money. So DEC unbundled the computer itself from the total bundle and sold it for less money to customers who could then write their own software.
But a DEC computer itself was a bundle of proprietary components: VAX hardware, VMS operating system, RDB database, etc. In the 80’s, Sun came along & sold a similar power computer to DEC’s for 1/4 the cost w/unbundled components: Unix OS + Motorola chips.
DEC responded by going upmarket and becoming more like IBM; Sun and other Unix workstation vendors chewed through their market + grew it more. Critical point: At the point when DEC started to tip over, its integrated offering was as close to perfect as our industry will ever see.
Ask people who were working then (like me) and they’ll tell you to this day that they miss VAX/VMS and how productive they could be on it. Meanwhile Microsoft and Intel came along and fully implemented the unbundled low-cost computer, first PCs and then Windows-based servers.
Sun responded to Microsoft/Intel by rebundling: Rebuilding itself in DEC’s image with Sparc chip, Solaris OS — proprietary HW+SW stack. Again, Sun got close to perfection as an integrated system when it unbundled Microsoft+Intel and Linux+Intel went broad and forced the sale of the company.
Picking up thread with Microsoft: Microsoft has spent last 15 years rebundling, rebuilding itself in DEC’s image much like Sun. Now + HW! Once again, bundled Microsoft stack very close to perfect just as it comes under attack from next unbundling wave: mobile + cloud.
Fascinating twist: Under new leadership, Microsoft 2014 now committed to unbundling — full app + cloud support for iOS, Android, Linux! Microsoft is taking new unbundling strategy offensively vs new titans who are bundling as fast as possible! Apple, Google, Amazon, Oracle.
The point? I don’t know much about what our industry will look like in 50 years, but I’m quite confident these same dynamics will apply.