In the mid-1990's, a fantastic documentary was created on the rise of the computer industry, hosted by Robert Cringley. The three-part series chronicles the rise from the Altair through Windows 95. Long interviews with all the big names: Jobs, Gates, Ballmer, Jack Sams (who? the guy who worked to get Gates and team to provide DOS, thus launching an empire). When I teach entrepreneurship, I often spent a week of class time watching and analying the three-part series. Its a timeless classic, and each time I view it I see a different angle, particularly in today's technology climate.
There's three things I like to point out when viewing this fantastic, though low budget, series:
1) No one discussed business plans. Three days of interviews and history, and not once did Gates say "we projected the market..." I don't doubt that they considered it. But, in emerging technology markets, the business plan helps discipline thinking, but any estimations and assumptions are driving by passionate commitment to a company's trajectory, not a drawn out business plan.
2) A key to Microsoft's success was a tacit understanding of complementary assets. Microsoft's goal was to sell applications, but a complementary product, the operating system, was necessary and Microsoft was willing to step in to ensure the continued progress of IBM on releasing the PC. Moreover, the business press has forgotten that Microsoft made very little money on their deal with IBM. Where they launched an empire was Microsoft's reservation of rights to distribute their software to other companies.
3) In turn, IBM was blinded by their own success: assuming no other company could make a PC once IBM entered, they never worried about competitors like Compaq entering. Larry Ellison pointedly stated the truth: it is suspicious that IBM could give the market away. Why not buy Microsoft and partner with Apple? Could an organization have been that dense to miss these opportunities? Yes, see the history of Xerox PARC.
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