Top 10 technology tussles

 

Scouring the history books for the biggest battles in the technology industry.

Anthropologists tell us about the olden days, when (predominantly) men stood with spears and threatened each other.

Over the years we've moved on: using swords, then guns, then nuclear weapons before finding the ultimate weapon – lawyers.

The technology industry, being so new, has resorted to legal battles more than most.

As much as we'd like to see a cage fight between Bill Gates and Steve Jobs using chainsaws (two men enter, one man leaves), the technology industry has fought its battles in court, or in competition in the marketplace – albeit with heavily stacked odds.

This week we've seen VMware declare war on Microsoft and Citrix over virtualisation.

Battles are contentious by default, so if you think we've missed something let us know.

10. Microsoft v Google

Shaun Nichols: Yet another recently-born rivalry, the battle between Google and Microsoft may well determine who becomes the alpha dog in tech for the coming decades.

Microsoft is the reigning king of computing. The software giant maintains a stranglehold on key areas such as operating systems, web browsing and software. Google, however, is the king of the internet. The smashing success of the flagship search engine has given Google a cash cow in the form of search advertising.

Now, as the internet increasingly becomes the basis for day-to-day computing activity the two companies, once thought to occupy different ends of the industry, find themselves on a collision course. Microsoft is eyeing a share of Google's lucrative online advertising business while Google is increasingly using its online applications to target Microsoft's stranglehold on the workplace utility and productivity market.

Iain Thomson: When a senior member of Microsoft announced he was leaving for Google, Steve Ballmer was reportedly so enraged he threw a chair across the room.

It shows how deep the rivalry is between these two companies. Microsoft has been the top dog for two decades and it'll give up that supremacy when you pry the keyboard from its cold, dead fingers.

Now you might think that Google has the upper hand in the fight. It has the search business in a lock, and has started giving away applications that Microsoft has used as a cash cow for free. But Google is the fresh-faced ingénue in the game, while a decade of fighting with governments have given Microsoft a vital advantage in the management arms race.

9. IBM verses CDC

Iain Thomson: As we'll see later IBM ruled the roost for the first years of computing. But a small team behind Control Data Corporation (CDC) took on Big Blue and caused them some serious hurt.

CDC took on IBM in the supercomputing field, and at first appeared to be winning. It set as its ethos to offer less for more; a strategy that has been mimicked ever since by competitors in computing.

Then a tiny company CDC nevertheless out-engineered IBM with the CDC 6800, which massively outperformed anything else on the market. This caught IBM off guard, causing it to pre-announce the release of the Model 92, which would be just as fast. The computer didn't even exist when it was announced, but sales for CDC kit dried up while the market waited. IBM's tactics eventually cost it US$600 million in fines – a major chunk of cash at the time. But the damage was done.

CDC's next big iron project was much better than the 6800, but was released during a recession and failed to get serious market footprint. Supercomputing genius Seymour Cray left the company and it was all downhill from there.

Shaun Nichols: If there's any good that came out of the Cold War, it's what the conflict did to the development of IT. So many of the early computing firms were able to get started because of the huge military contracts that were being handed out left, right and centre as NATO rushed to update its military operations and NASA leapt into the space race.

Another benefit of the era was the opportunity for smaller firms to start up. World War II produced a new crop of talented engineers working on systems such as radar and code-breaking equipment. Upon returning home many of those engineers entered the workforce and some of them even started companies. One of these was Control Data, a small firm that set up shop at an old aircraft plant in Minnesota.

With companies such as IBM looking to get into the burgeoning market for computing, CDC needed an advantage to keep pace. They got it in the form of a brilliant young engineer named Seymour Cray. The machines Cray designed sparked the supercomputing market. IBM then attempted to keep pace with its own deep pockets and stable of engineering minds.

The resulting back and forth between the two groups led to countless breakthroughs in computing throughout CDCs life and later through Cray Computing. When the Cold War finally ended the race, both sides had contributed new technologies and methods that are still driving innovation in the IT sector today.

8. MacOS verses Windows

Shaun Nichols: For more than two decades now the popular debate amongst computing enthusiasts has been "Mac or PC?" Though the overwhelming majority of the time the debate was really between Windows and MacOS operating systems.

While Apple can't take credit for inventing the graphical user interface (GUI) – that honour lies with Xerox PARC - the Macintosh was the first to bring it to a wide audience, and when Microsoft produced the first version of Windows, a battle of epic proportions was kicked off.

Since then Mac users and PC users have been locked in a war of words. MacOS is more elegant, intuitive and less prone to malware attacks, while Windows is more widely supported and runs on cheaper hardware.

The only reason the Mac/Windows battle doesn't rank higher is that the battle has more or less stabilised, if not settled. Macintosh machines take up somewhere around 10 per cent of the market and keep a foothold with the creative types, while Windows copes with the larger market and maintains dominance with the business and gamer crowds.

Iain Thomson: Back in the day there really was a fight between Apple and Microsoft.

But Microsoft leveraged its huge user base to outstrip Apple and the cash left it able to defend the charges from Apple that it had stolen the GUI idea – a claim frankly ridiculous, since Apple had stolen it in the first place.

Actually Apple's conflicts with Microsoft were immensely useful for Redmond. Microsoft pumped money into Apple when the company was in a post-Jobs death spiral, just so it could say that it had competition in the operating system market. This provided a useful argument against anti-trust cases for the equivalent of Bill Gates' pocket change.

7. Jobs verses Scully

Iain Thomson: In the mid-1980s Apple was in trouble. Sure, it had one of the best selling computers on the market but the firm was being run by two people who were, in business terms, naïve at best.

Steve Jobs had used Steve Wozniak's skills to build Apple into a computer powerhouse. But neither of them knew the first thing about running a modern company. So, at the advice of his backers, Jobs went after a modern chief executive who could run the company as Wall Street demanded.

Jobs worked hard to get John Scully, then president of Pepsi. Scully had achieved his position by marketing the products well and using strict cost control.

Initially Scully was a success. He cut down on Apple's operating costs by enforcing rigorous inventory control and cutting out useless side projects. Then he decided to cut out another area of the business he saw getting in his way – Steve Jobs.

Jobs found himself comprehensively outmanoeuvred by Scully. Jobs had built Apple around a personality cult, but in doing so had arguably offended a lot of people, noticeably many members of the board. Scully pandered to these people and sought to isolate Jobs.

Jobs was forced out, sold off his stock, turned his back on most of his supporters and took his toys elsewhere. Scully looked triumphant, but then came the realisation that he didn't know what the technology industry was really about. He ran the company into the ground with politics, the infamous PowerPC fiasco and many other cases.

Jobs triumphed in the long run – hired back to save the company from itself. But the conflict crippled Apple at a time when it could have really stuffed Microsoft and the effects linger on today.

Shaun Nichols: Scully was brought in to Apple because he was a businessman rather than a computer geek.

Unfortunately the man's best selling point for getting the job was also his greatest weakness once he got in there. Scully ran Apple like a soft drink company, opting to get rid of troublesome executive Steve Jobs in favour of peace and continuity. This works well when you're in a business where the product hasn't changed in 50 years.

Unfortunately, Apple is a computer company. And running a company in the computer businesses means constantly being aware of changes and having a vision of what new products the company will be releasing ten years down the line.

Not surprisingly, ten years after Jobs left things hit rock bottom. Scully was able to keep things going well at Apple for the first few years after Jobs departure, but as the 1990s dragged on it became painfully obvious that Apple was lacking in both vision and focus, releasing a scattered line of machines that gained little ground with each release.

When Jobs finally returned, his first moves were to dramatically reduce the the number of machines Apple built and radically overhaul the ones that the company was still producing. All that did was create the iMac, arguably the company's most important product ever.

6. SCO v Novell, IBM

Shaun Nichols: This is one of our favourite stories in the annals of IT history.

Software vendor SCO, under chief executive Darl McBride, decided to sue both Novell and IBM over a series of patents.

Though this normally would have been settled quietly and produce nothing more than a footnote in the news sites, the story became a big deal because the patents in question were key components of Unix and its open-source variants. In other words, SCO was suing for exclusive rights to enterprise Linux.

Fortunately for the rest of the industry, the effort was not successful and SCO eventually found itself facing bankruptcy. In the meantime, McBride and his company became one of the most controversial figures in the technology world this side of Redmond, WA.

Iain Thomson: One can't help but look at the disaster.

I've explained my feelings about SCO in the past and see no reason to change them. SCO thought it could use the US patent system to get a free ride off Linux. It failed, and with any luck will be consigned to the dustbin of history.

It's an interesting example of punching above your weight. Despite my cynicism over the legal industry in this country the SCO case does highlight that no matter what your funding you can't buck the facts – unless you're OJ that is.

Read on for the top five technology tussles...

5. IBM verses the regulators

Iain Thomson: In the early computer industry the phrase "No-one ever got fired for buying IBM" was commonplace.

IBM dominated the computer industry for the first twenty years of its life. It built computers that aided the Holocaust for Nazi Germany but when the US belatedly entered the Second World War it turned its efforts to the sides of the democracies and built an admiral reputation while refusing to take more than one per cent profit from war work.

But it held certain patents that held the rest of the industry back. The ground-breaking case of Honeywell v. Sperry Rand spelled IBM's loss of control of the industry, invalidating patents that the company and its proxies had used to exercise a deadening control over the computer market.

The resultant boom in computing technology sprung from this verdict. Less than five years later the first personal computer came out, and the rest is history.

Shaun Nichols: Many in the business world like to say that regulation harms innovation, that when an industry is controlled by the government nobody wants to do anything new. In the case of IBM, however, a solid argument was made for the ways in which government intervention can spark growth within the industry.

This becomes even more important when you take into account IBM's opinions on the market at the time. The company was a firm believer in the idea of a single, centralised computer system and had little interest personal workstations. Even when PC technology did become viable, years later, there's some doubt that IBM would want to enter a market with such low margins.

By breaking up IBM's operation and freeing these patents, the US government helped to prepare the market for the computing booms that would take place in the 1970s and 80s. It also helped to set precedent for future antitrust cases in the IT world, such as those against AT&T and Microsoft.

4.Salesforce v Seibel

Shaun Nichols: In 1999 a company called Saleforce.com went life with a web-based customer relationship management (CRM) tool that ran through the web browser. The new service allowed smaller companies to purchase the product one user at a time, and pay a monthly subscription cost rather than buy the entire package up front.

Siebel systems laughed off the plucky startup. After all, Siebel sold its product in huge deployments that cost tens of thousands of dollars. The company's clients were large enterprises that weren't likely to switch any time soon.

Dismissing the idea turned out to be one of the biggest mistakes made by a software vendor in recent memory. The software as a service (SaaS) and individual subscription model proved to be a huge success, and Siebel soon saw its market shrinking as Salesforce moved into the larger enterprise sector.

Too small to take on market leader SAP and too rigid and inflexible to ward off Salesforce, Siebel eventually was bought out by Oracle as its once tiny rival gained huge chunks in the market.

Iain Thomson: Saleforce.com is a great example of two things: someone having a good idea and the rest of the market being too stupid to realise this.

Salesforce took the industry on with one of the first SaaS servings and wiped the floor with the competition. You can almost see the look of shock on the faces of Siebel executives as they sat down to another executive lunch and found the market had been stolen out from under them.

But this wasn't really a fight - it was more of a French army circa 1940 situation. The established vendors didn't really understand the competing technology and before they knew it they'd been blitzkrieged into submission. W

3. Commodore verses everyone else

Iain Thomson: Commodore was born from a combative past. It was originally a calculator company but was forced out of the market by Texas Instruments who started selling calculators at less than the cost of production to win market share.

This was one of the factors that led Commodore into the personal computer market, and also (I suspect) a major factor in it nearly destroying it.

The company's PET and VIC-20 broke records in personal computer take-up and the Commodore 64 was a masterpiece of engineering. I remember using one in 1991 and being amazed how this 'old' computer could handle such great graphics and processing. It really was a model ahead of its time.

But then the urge to dominate seized the Commodore board. The company had a commanding position in the industry but Apple and then IBM came into the PC market and the Commodore management decided on a scorched earth strategy.

Commodore would take on every other vendor, drive them out of business and reap the profits.

At first the strategy of slashing prices appeared to work. Texas Instruments was driven out of the market, Atari was crippled and a whole generation of programmers found themselves out of a job. The computing industry faced its first ever recession.

But it was a Pyrrhic victory. Commodore destroyed the village in order to save it and reaped the whirlwind. The company is now an also-ran in computing history and will soon be forgotten.

Shaun Nichols: Today, many gamers and PC enthusiasts regard Commodore with an attitude of nostalgia and retro cool. The Commodore 64 has a soft spot in the hearts of many for the role it played in the home computing and gaming market of the 1980s. If they were to delve a little deeper into Commodore 's actions in those years, however, those same users may become quite angry with the company.

As the advent of video gaming began to push computers into the home in the early 1980s, a bevy of new companies were founded to produce both the hardware and software for low-cost home systems. Some were better than others, but it cannot be disputed that the market was quite competitive and receptive to innovation.

Commodore founder and president Jack Tramiel did not like the idea of having to share the market with so many other firms, so he decided to price his competitors out of business and absorb a near-term loss for long-term gains in market share. It was a war of attrition that Commodore would ultimately win, though at a crippling cost to the company.

Home video game companies were almost entirely wiped out, and by time the crash had subsided, the cash-strapped Commodore was too weak to take advantage of the market. Windows and Macintosh PCs drove the company out of the computer market, while a home gaming device from a Japanese firm named "Nintendo" took care of the console market.

2. Intel verses AMD

Iain Thomson: I'm going to have to be very careful what I write here because there is an ongoing anti-competitive case going on in the EU and US at the moment on just this issue.

Intel was the first modern chip company. Born out of an alliance of interested parties at Fairchild Semiconductors, Intel has gone on to be the biggest chip company in the world and has an annual turnover larger than several small countries.

AMD was also started by refugees from Fairchild and initially worked quite well with Intel. Indeed, it could be said that Intel's success with IBM was due to competition with AMD, since IBM was required to have two chip suppliers.

But then in 1986 Intel started to play rough and cut off support for AMD by denying it access to the chip designs it needed. After eight year in the courts Intel had to pay damages, but the ill feeling persists to this day. Intel has fired more legal challenges at AMD, most of which have been beaten off at huge expense. Now AMD is fighting back.

AMD has over the last years been preparing its revenge. Over the last decade the company has been significantly ahead of Intel in the technology sphere, yet this hasn't translated into orders. AMD, by all accounts, feels this is because Intel has had agreements with OEMs to ignore AMD's processors in favour of Intel's, in return for large discounts on volume chip supplies.

It's up to the courts to see if these claims are true. What is clear is that both the EU and the US, as well as Japan and Korea, are taking this seriously and in some cases have come down on AMD's side.

The current round of investigations will take years to complete and, if Microsoft's experience with the EU is anything to go by, will take years more of appeals and the resultant fines won't hurt too much - since that would stifle the 'free market'.

Shaun Nichols: Depending on who you ask, the spat between Intel and AMD these days is either the result of dirty tricks or sour grapes. AMD claims that Intel bribed and threatened PC and server vendors to go with its own chips, while Intel claims that AMD is just upset because it simply could not keep up in key areas of processor development.

Regardless of the claims being made today, the war between Intel and AMD paid huge dividends to consumers. When Intel saw its development stall, AMD was there to take advantage and the market responded. This in turn pushed Intel to step up its own game. Over the last two decades, both companies have been what some analysts liken to a game of leapfrog in which each company briefly jumps ahead of its rival.

These days Intel is ahead in the market and AMD is still dogged by financial problems. Hopefully the company can recover, because the back-and-forth between the two sides has been a boon to the rest of the industry.

1. Microsoft v. Netscape

Shaun Nichols: Perhaps the most influential event of the last decade was Microsoft's landmark anti-trust case. Fallout from the case shook up the entire market and forced the largest software vendor in the world to radically alter its approach to the market. And it all started with one showdown.

In the late 1990s the internet was coming of age. As users ventured out of the walled-garden ISP experience and into the larger internet, the web browser market boomed and Netscape was the reigning king.

Seeing this boom in browsing, Microsoft wanted to get some of the pie. Having already accumulated a dominant position in the operating system world and a huge software applications outfit, Microsoft decided that rather than compete head-to-head, it would simply leverage Windows.

While Netscape was a paid application that had to purchased in a store or downloaded online, Microsoft decided to bundle its Internet Explorer application as a free component of Windows. Not only did users not have to obtain and install a separate browser, they could get it for free.

As one would expect, users flocked to Internet Explorer and Netscape was devastated. The company soon had to shut down, but not before filing what would become a landmark lawsuit. As the case dragged on, authorities realised that Microsoft was using the dominance of Windows to muscle other companies out of the market.

Netscape may not have won the browser war, but they planted the seed that lead to disaster for their rival. Ironically, Microsoft later found itself battling for browser supremacy when the remnants of Netscape Navigator were turned over to the open source world and used as the foundation for Mozilla Firefox.

Iain Thomson: I think you're overestimating Microsoft here Shaun. Gates wrote off the internet in 1993 as the computer equivalent of CB radio, then tried to catch up fast.

In doing so I think Gates panicked. He saw he'd missed the boat on the biggest thing in computing so used Internet Explorer to not only do over Netscape but to try and lock everyone using Windows into using IE. I was at a meeting with Microsoft public relations where the intention was clearly stated - "We need to [censored] Netscape until they bleed."

This was not a comment from a company in control of the situation.

Once Microsoft dominated the browser market development stopped until Mozilla used the Netscape engine to build a better browser and Microsoft was forced to play catchup again. We lost nearly a decade of browser development because Redmond got its monopoly.

Ultimately Microsoft paid heavily for the price of winning the browser wars. While getting off lightly in the US under Bush's regime the EU stepped up and did its job. Microsoft is still paying the price for its actions

Copyright ©v3.co.uk


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