Disruptive change steamrolls incumbents

Remember when Motorola ruled the mobile phone business worldwide? And then Nokia did? And then BlackBerry did? And now none of them do?

We all ask the same question about Kodak, monarch of the global photo industry for a century, now bankrupt, while Instagram, a photo-sharing service with a dozen employees, is sold to Facebook for $1 billion.

And while we’re at it, what will happened to Hewlett-Packard? To Dell? Once synonymous with PCs, Hewlett Packard and Dell are now struggling to keep up with the software-driven shift to integrated, differentiated systems.

Dell was the embodiment of scalable build logistics, coupled with standout customer service. It was the Amazon of personal computing – before Amazon existed.

As for HP, you remember “the HP way” and the original “two founders in a garage” narrative, right? The company was a true force driven by clear directives such as, “attack the undefended hill” and “number one or two in each targeted market.”

Disruptive change steamrolls incumbents faster than they can course-correct

Although disruptive change takes far longer to occur than most people account for, once it kicks in, it steamrolls incumbents faster than they can course-correct.

The Dell and HP story is about the shift to integrated, differentiated systems lead by software. Like most hardware-centric companies, neither HP nor Dell ever grokked software, certainly not in terms of any integrated strategy.

Maybe they thought they didn’t have to? After all, the horizontal model that made Microsoft a lethal killer in segment after segment had dominated the conventional wisdom of the preceding 20 years. Built on the premise of industry alignment around loosely-coupled, but coordinated efforts between hardware and software component makers, the horizontal ethos dictated that hardware folks worry about hardware and leave the software differentiation to the software guys.

With the advent of the Internet, however, a vicious cycle of commoditization – horizontal’s downside – began to play out.

Will the next 20 years look less like the Microsoft model and more like the Apple differentiation model, where every effort is focused on the central goal of delivering complete product solutions and richer, more satisfying customer outcomes?

Will we move to an economy where businesses and industries are defined by tight integration from bricks and clicks to hardware, software and service?

Does either HP or Dell have what it takes to make this transition?

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Disruptive change steamrolls incumbents — http://www.torbenrick.eu/t/r/nay

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