Computing is a diversified industry that includes sectors devoted to computer hardware, software, maintenance, and services. The computer industry is a multibillion dollar market whose products are sold globally. Despite the global characteristics of its marketplace, the vast majority of major computer industry vendors are American firms.
Certain segments of the computer industry are characterized by near monopolies. These include the disk operating software and microprocessing sectors, dominated by Microsoft and Intel, respectively. Once the major force in the personal computer sector, IBM has been relegated to a fourth place position behind rivals Compaq, Apple, and Packard Bell.
IBM is staking its corporate future on the provision of networking services. The focus of these services is the corporate sector. Toward this end, IBM recently acquired Lotus Development Corporation and its $300 million-a-year business based on Notes, a network software popular among the business community. IBM also established a public data network with 11 international telecommunications companies.
Although IBM is banking on corporate networking as the wave of the future, surveys indicate that the home computing market will grow at a rate double the pace of the business market over the next five years. Therefore, IBM must hedge its bets and expand its corporate mindset. IBM should pursue strategic alliances with companies that are capable of making innovations in the home computer market. These companies would include Japanese consumer electronic giants like Matsushita and Sony.
PART I. COMPUTER INDUSTRY STRUCTURE
The breadth of the computer industry is rapidly expanding as computers play an ever increasing role in homes and businesses. Once confined to the narrow realm of the mainframe computer, computing now encompasses a wide range of goods and services. International Business Machines (IBM) is a prime example of the com...