Re: Why is Congress Considering Such Anti-Consumer Telecom Bills?

DLR wrote:

>> My point to all of this is that the world changes and big dominant >> companies hate change. It makes them work to maintain their dominance >> and what they really want to do is coast and talk about what they are >> doing, not actually do something. > You make many good points. However, not all "big dominant" companies > dislike change and are stagnet, indeed, many of them are the ones > developing and pushing the changes. > The Bell System and IBM of the 1960s were behind many of the social > changes in business communication. Reduced toll rates and more > sophisticated technology allowed the telephone to be a commodity than > high cost specialized appliance. Centrex and DDD allowed someone to > call another instantly compared to operator arrangements people were > used to. IBM's reports and punched cards dramatically raised the > volume of information being passed around. > There was much social criticism of the new world of phones and > computers. People pleaded for a place away from the incesant ring of > the phone. > The Bell System was huge. Some parts were better than others, some > quite responsive, others sluggish. From reading responses, I don't > know if NYC ever got over the past service crises. > IBM went through a relatively brief period of stagnation. It did get > too bloated by hiring too many people to fit the IBM "no layoff" model > and ceased being lean.

It was not relatively brief. It was continuous. But it wasn't stagnation as much as taking great things and doing mediocre things with them. It was just that being dominant in their fields hid much of it most of the time. I have friends in some key places inside IBM and they talk about the constant battle to compete against the competition, not against what they did last year. But it has gotten much better. Read the Mythical Man Month. He talks about how only IBM had the resources to do the System 360 at the time but the bureaucracy of IBM almost doomed the project. There's another book about quality written by a senior IBMr from the past. For a while he ran the typewriter division in the 60s/70s with a mandate to turn a profit or shut it down. Manufacturing was a disaster. He cleaned it up, totally changed it, and 5 years after he left it was back as if he's never been there. Dominance breeds contempt of others. Sometimes through ignorance but it's there.

The best IBM story is why they got out of the networking businesses. When Gerstner came in he made everyone show their P&L and if you were loosing money justify why you should exist other than "because". He also had them break out green vs. blue revenue and profits. This is what created the riots. Networking was something like 90% blue and 10% green. I.E. only 10% of the revenue came from sales to customers. The rest came from sales to run the IBM in house network, service contracts, and bundles with other hardware sales. Note in this last category that IBM was forbidden to sell anything from a competitor if IBM made something else that worked. So a $10 million mainframe sale might include $5 million of IBM networking. Once they dug deep into this practice and what their customers wanted, they shut down the networking division within a year and sold it off to Cisco.

But try going into an IBM retail store in the 80s and buy something for PC. Before you could pay for it and leave you had to register the serial number of the floppy disk drive with your name and address.

There are other stories about DB2, Microchannel, disk drives, etc ...

At to Bell Labs, they did great work. Most of it took years to make it into the field. Much of it went no where in terms of the phone system. I still remember how colored phones were marketed as innovations. I had an older cousin who was a senior sales rep for Bell in IL in the 70s. He could spout the company line all day long about innovation, protecting network from foreign devices, etc ... He would also say privately it was all about locking everyone else out of the market.

But plenty of small companies are merely followers of the big guys > with no contribution of their own. IBM was mad at small companies > that cloned the fruits of IBM's research (as in tape and disk drives), > sold them cheaper, then complained when IBM made upgrades that hurt > their clones.

It's called a free market. If they really impinged on IBM patents they could have been made to pay royalties or not sell the products. What really was happening was IBM was claiming that plugging in any non-IBM device voided the warranties and service contracts on the entire system; similar to Bell and their $150 + monthly charges data protection device to plug in a phone not supplied by the phone company. Or heaven forbid a modem. If the old Bell system was still in place without the fall out of the MCI situation, we'd all still be debating whether or not

128kbps ISDN was worth the extra costs and wondering why the rest of the planet had 3mbps Internet. But we'd be told over and over it wasn't very reliable compared to the great product we were using. Heard that line WAY too many times.

Watching the mainframe sort wars of the 80s was similar. Syncsort(?) had a sort that was up to twice as fast as IBMs. Every week in ComppurterWorld they'd run a different ad showing how their sort ground IBM into the dust in a different situation. After a few years IBM started running ads showing how they really were better according to their "fair" tests. Then it came out when no one could reproduce IBM's results that they were faked. High up at IBM the troops were told to beat the competition, period. So they did. They just forgot to play by the rules since that was the only way to win.

Bell and IBM had great research arms. They had lots of bright people. But the companies were run by managers who were out to protect their turf at all costs. And bringing new widgets to markets where they already owned 90% of the market was riskier than doing nothing.

I say the above based on a variety of information sources. I've been a potential customer of IBM where they wanted us to switch to them in the 80s for the 500 or so minicomputers we were installing around the country a year. To be blunt, they flat out lied about the capabilities of the computers. And given the looks on the faces of the folks we worked with, they knew it but were under orders. I also worked in IBM manufacturing as a grunt to pay the bills during a career switch. (Amazing way you can see from the bottom. :) ) I have current friends who are high up in Leveno and IBM. They like the company but want to fix the flaws, not ignore them.

My argument against the first poster was that it seems to be more of a > triade against the traditional phone companies and not one based on > the facts. > I am greatly suspicious when someone holds up a new invention and is > upset that it isn't in everyone's hand the next day. The world > doesn't work that way.

Agreed. But then again IBM and AT&T were never in a hurry to put out new things unless it would increase profits. And new things in technology tend to lower profits unless you also grow the market and that's not always a given. If you want to really see the economics of high tech at work, look around and think about the turn over in retail computer stores for the last 15 years. They just have a real hard time dealing with the costs of their products dropping by 1/3 year after year after year. It makes you scared to put out a new product. And if you "own" the market you tend to do just that. Sit on things that are disruptive.

As to a counter to this think of Intel, Cisco (usually), Texas Instruments, and lately Motorola.

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DLR
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