What turned IBM from tech titan to cautionary tale

livemint.com:

Macs give Apple a chunkier India pie Many of those Fortune 500 companies did eventually recover, but for IBM It was the beginning of the end. Despite major changes, including the unceremonious sacking of CEO John Akers, and layoffs, IBM (US) suffered a net loss of almost $16 billion from 1991 to 1993. The exit of Akers, a quintessential IBM-er, was a clear sign that the days of stability and continuity were over.

Abrupt though it seemed, IBM’s decline had started long before that. Despite having birthed the personal computer in 1981, the company refused to put its might behind it on the grounds that it couldn’t possibly carry out the tasks performed by a mainframe. Its initial sales estimate for PCs was a peak of 400,000.

Since the big boys at the company held the tiny machine in disdain, the company violated its own policy and used chips and operating system software from two small companies – Intel and Microsoft, respectively. Also read: Intel shares slump 27% as turnaround struggle deepens But in an instance of either madness or arrogance, it didn’t prevent Intel and Microsoft from selling similar products to other companies. The future would prove that it had ceded the most profitable parts of the business to these two companies while keeping the least profitable portions for itself.

The decision resulted in a rash of PC clones, as they were called, from hundreds of smaller companies. These had the same features as the IBM PC but cost less. The PC market, which IBM was sure would fall to it just as mainframes had in an earlier era, proved to be its downfall.