Business Software

15 Turning Points in Tech History

Microsoft Office's Domination Takes Form

If you had a PC on your desk in 1986, chances are you were writing or crunching numbers on either WordPerfect or Lotus 1-2-3. Fast, lean, and full-featured, these programs were among the best that DOS had to offer. They were so good, in fact, that few businesses would dream of switching to the lackluster alternatives from Microsoft.

Unfortunately, neither Lotus nor WordPerfect anticipated the success of Windows. They assumed that applications would dictate users' choice of operating system, not the other way around. As users began clamoring for GUI-based software, Microsoft was quick to fill the void with Word and Excel.

By 1990, Microsoft was shipping both programs, along with the newly introduced PowerPoint, in a bundle it called an "office suite." Compared with the single-purpose, DOS-based software sold by Lotus and WordPerfect, Microsoft was giving Windows users a better deal. In the end, the former market leaders may have delivered more functions, but their decision to forego early support of Windows was costly one.

Louis Gerstner Resurrects IBM

It had once been the behemoth of the computing industry, but by the time Louis Gerstner became CEO in 1993, IBM was literally falling apart. Having posted a $4.97 billion loss for 1992 -- the largest in American history -- and with mainframe sales dwindling, senior management had begun spinning off business units to free them from the Big Iron anchor around their necks.

Gerstner put a stop to that. Consolidating and streamlining IBM's various divisions, Gerstner expanded IBM's software business and revitalized its corporate culture. But his most crucial move was to shift IBM's focus from products to services. Today, IBM's Global Services division remains one of its strongest earners, pulling in $15 billion in revenue for 2007.

Equally important, IBM's new direction paved the way for countless other tech companies, including open source vendors who rely on support revenue to underwrite free software. From the brink of insolvency, Gerstner successfully steered Big Blue into a leading position for the Internet age.

The ARPANet is for Porn

In 1973, Alexander Sawchuk needed a photo with which to test a new digital image compression algorithm he was developing at the University of Southern California. A glossy page with a variety of image properties to test against. In particular, he wanted a human face. A brief search around the lab turned up a photo of Lenna Sjö blom -- Playboy's Miss November 1972.

They say that anything you post to the Internet can live on forever. For Lenna it turned out to be true, even in that pre-Web age. Sawchuck's digitized photo went on to become one of the stock images used in compression research, having now appeared in countless papers on the subject.

Many more women have since followed in Lenna's footsteps, proving the rule: Give computer geeks a public network and before you know it they'll fill it with smut.

The Web Gets Out of Synch

Reading e-mail on the Web sucks; that was Microsoft's judgment in 2000, back when the Web was a page-based medium. Each HTTP request meant a roundtrip to the server that refreshed the entire page, which was no good for high-activity applications like e-mail clients. So, to make Outlook Web Access 2000 more usable, Microsoft developers created a way for browsers to communicate with Web servers, by loading small amounts of data asynchronously.

Surprisingly, the idea stuck. Despite a troubled history with Internet Explorer, the Mozilla Project built similar functionality into Mozilla 1.0 in 2002, calling it XMLHttpRequest. The floodgates were opened, and a new way of coding for the Web was born.

It's hard to believe that Facebook, GMail, Google Maps, and countless other Ajax-enabled sites owe their existence to Microsoft's lead. But it's a good thing they did; if they had waited for the W3C to standardize XMLHttpRequest, they would still be waiting today.

Linux Staves off SCO

In 2003, a black cloud had descended over open source's poster child. The SCO Group, led by new CEO Darl McBride, claimed ownership of key portions of the Linux kernel. Cautious Linux customers were warned to pay license fees to SCO, lest they find themselves on the wrong end of a copyright-infringement lawsuit.

But SCO had underestimated Linux's importance to the enterprise, and particularly to IBM. Why SCO thought it could outmatch Big Blue's lawyers (or its deep pockets) is anyone's guess. What matters is the outcome. One by one, IBM's lawyers knocked down SCO's arguments, establishing Linux's legitimacy as a matter of court record.

As the lawsuits lumbered on, McBride and company were ridiculed, then bankrupted. Meanwhile, the Linux business boomed. With allies such as Computer Associates, IBM, Novell, and Red Hat willing to take up its defense, the open source OS was clearly here to stay. Ironically, the lawsuit that was meant to be the death blow for Linux may have succeeded only in ushering in its golden age.

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