Apple, IBM and Microsoft: What comes around

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Boy, what a difference 30 years makes. In 1984 Apple released its famous "1984" advertisement. In the ad, a blonde-haired athlete hurls a hammer through a giant screen. On that screen, a "Big Brother" character drones about "information purification directives." The target of the hammer, and the ad? IBM.

Just before the preview of the ad, Steve Job told a crowd at a 1983 keynote:

"It is now 1984. It appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers initially welcoming IBM with open arms now fear an IBM-dominated and -controlled future. They are increasingly turning back to Apple as the only force that can ensure their future freedom. IBM wants it all and is aiming its guns on its last obstacle to industry control: Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?"

Well, just last week Tim Cook announced a surprising deal. IBM is not only going to sell iPads and iPhones to enterprise clients. It's also going to develop over 100 apps that will allow those clients to dive into big data using their mobile devices. Was George Orwell right about 2014?

Meanwhile, early in the same week, Microsoft's relatively new CEO, Satya Nadella, in a long, biz-geek speak memo, announced a new focus on the cloud and mobile, and hinted at layoffs. By week's end the other shoe, and 18,000 jobs, dropped in Redmond. That's 14 per cent of Microsoft's workforce, and the biggest layoff in the company's history. Microsoft executives are claiming they're still bullish on hardware (including Surface tablets, the Xbox One and smartphones). But, industry observers expect the company to give up on hardware and focus on the business software and cloud, side. Just like IBM does.

And, of course, on a Canadian note, none of this is any good for Blackberry, which saw its stock take a four per cent hit on news of the IBM/Apple deal.

So, what's going on in this topsy-turvy world? Microsoft is suffering on the PC and hardware side, and is tossing aside the devices and services religion of Gates and Ballmer. Apple's in bed with arch-rival IBM and stands to become the purveyor of mobile devices that can see deep into some of the richest data mines in the world.

First, Microsoft. The Redmond-based company tied its software to cheap PCs. But, its software alone failed to offer a value-added difference to those PCs. So, manufacturers started a race to the bottom in order to carve out some kind of margin from what had become a commoditized business. The result was cheap, creaky, plastic junk boxes all running the same OS. Meanwhile Apple had OSX, an operating system people were willing to pay more for. As a result, Macbooks could afford to offer solid, beautiful devices that PC manufacturers could only dream of emulating.

Then, Microsoft introduced Windows 8, a dreadfully marketed, bifrucated and confusing operating system that enterprise customers ignored in almost as many numbers as average consumers and those looking for a mobile phone from Microsoft. Which is why, of course, a majority of the layoffs will come from the beleaguered Nokia division, which Microsoft picked up in April for just over $7 billion. It was a bad acquisition Ballmer made as a lame duck CEO on his way out. 

Microsoft left itself, in the consumer space, with cheap junky laptops running an OS few customers wanted. And it was squeezed at both ends. Apple owned the high-end market and upstart Chromebooks, which educators fell in love with, ate the sub-$400 space for breakfast. Plus, on the mobile side, it came to the table too late with a confusing collection of handsets and a half-baked mobile OS.

Meanwhile, over at Apple, Tim Cook was bringing his supply chain genius inside Apple and making the Cupertino company run like a well-oiled, fully integrated Swiss watch churning out some of the best mobile devices in the world like clockwork. Just the kind of partner IBM needed.

So, Microsoft is now going to find itself in a bit of an enterprise catfight with Apple and IBM on the other side of the table. We just get to sit back and watch the hammers fly.

Listen to an audio version of this column, read by the author, here.

Wayne MacPhail has been a print and online journalist for 25 years, and is a long-time writer for on technology and the Internet.

Photo: albertmarini/flickr

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