Failure of Success!

January 21, 2011Blog Standard

I had an interesting conversation the other day with Mouli, who is a veteran in IT Services.

We were talking about Xerox, how they were so successful in their business and how they pioneered several concepts in Services and products side.
It is ironical it was to see how the global success of Xerox in its monopoly business of copiers blinded them to understand the power of the technologies which they had themselves invented.
Product technologies like GUI, Mouse, PC, Ethernet were first created in Xerox research labs but Xerox failed to monetize these ideas and see the true potential of those ideas because they were so focused on the “successful “ business model of selling and maintaining photocopiers.
So a company which could have been pioneer in desktop computing and networking eventually is slotted as a document management and services company only.
The example of how IBM underestimated the power of DOS and allowed MS to create their monopoly on desktop OS is too famous to bear repetition.

Is there a lesson to be learnt here?
What is the new opportunity we are missing out by being too successful in the traditional business model of IT services?

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Ramesh Raghavan

In my view we are being complacent on the areas of technological advances like Cloud, Virtualization, Robotics and power of self heal tools (including Intel vPro). I think we need to move the next league of delivery IT services in a manner where people could correlate it to coke vending machine.

Whilst many may argue Cloud is overtly abused terminology however there is some sense it what it can achieve; the benefits are for those who push the envelope. IT services will move to the conveniently forgotten word “Service Oriented”; where in IT by itself would be masked behind tangible services (and hence the vending machine concept becomes even more prevalent).

It’s important for IT companies to recognize the IT budgets are still a single digit of corporate profits yet we are talking of $ 148.8 billion in 2014 for just cloud based services. That’s probably 20x annuity revenue of top tier IT companies in India. The opportunities are huge and in the face but investments are hard to come by.

As the soothsayer would have it; possibly a non-IT based company might take the forefront of IT services into the next league.


In one of my recent management trainings I learnt about organizations needing to have a right Strategic Intent that eventually drives the success or failure of the organization. Xerox's and IBM's failure to recognize the market potential of their own creations which led to others taking over can be compared on the contrary to Komatsu eating away a big market share of Caterpillar, Canon doing so against Xerox itself (in the area of printing) are examples of right Strategic Intent where they recognized the market potential and became successful. It is true that we need to ask ourselves – "Are we too focussed on our traditional model like how Xerox or IBM were?" however, we also need to evaluate ourselves if we have the Komatsu or Canon in us – the potential to identify the market potential of our product.

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