1994: A Year of Turmoil for Tech Giants

Strategic Insights -

The year 1994 saw significant turmoil in the tech industry, with major players like IBM, Microsoft, and Apple facing challenges and controversies. The industry continued to evolve, with the rise of the internet, new hardware and software releases, and shifting alliances.

As the year began, IBM's once-mighty brand name had fallen to the bottom of a table of 290, with a negative value. The company closed down its Ambra subsidiary after making awful losses, despite making a profit in every quarter after losing $16bn in the previous three years. Meanwhile, Apple launched a new online service, eWorld, and introduced its PowerPC-based PowerMacs, which were incompatible with IBM's PReP and would not run the same software.

Microsoft faced a lawsuit from Stac Electronics, which was ordered to withdraw its DoubleSpace utility and pay Stac $120m. However, the two companies later settled out of court, with Microsoft acquiring a shareholding in Stac and acquiring Stacker patents. Bill Gates announced Teledesic, a plan to connect the world using 840 low-orbit satellites. Novell took over WordPerfect in a deal worth over $1bn, and Semantec merged with Central Point Software.

In the latter half of the year, IBM's problems continued, with its PowerPC-based personal computers being rendered obsolete by Apple's CHRP (Common Hardware Reference Platform). CHRP-compliant systems won't be available until 1996, which could give Apple a significant advantage in the PowerPC market. Meanwhile, Intel's Pentium processor faced problems with its floating-point division (FDIV) commands, leading to a public apology and climbdown, with Intel agreeing to replace buggy Pentiums on demand.

The year ended with Microsoft announcing that the long-awaited Windows 95 'may' not appear until August, which led to renewed speculation and controversy.

Key Takeaways:

  • IBM's once-mighty brand name fell to the bottom of a table of 290, with a negative value.
  • Apple launched a new online service, eWorld, and introduced its PowerPC-based PowerMacs, which were incompatible with IBM's PReP.
  • Microsoft faced a lawsuit from Stac Electronics and later settled out of court with a shareholding in Stac and acquiring Stacker patents.
  • Novell took over WordPerfect in a deal worth over $1bn, and Semantec merged with Central Point Software.
  • IBM's PowerPC-based personal computers were rendered obsolete by Apple's CHRP (Common Hardware Reference Platform).
  • Intel's Pentium processor faced problems with its floating-point division (FDIV) commands, leading to a public apology and climbdown.

Statistics:

  • IBM lost $16bn in the previous three years.
  • Microsoft's market value is estimated to be over $50bn.
  • Intel's Pentium processor faced problems with its FDIV commands, which could cost the company between $500m and $3bn to replace.
  • The CHRP (Common Hardware Reference Platform) will be available in 1996.
  • Windows 95 'may' not appear until August, according to Microsoft.

Sources:

  • "The Guardian" (online@guardian.co.uk, print version 119 Farringdon Rd London EC1R 3ER)
  • "Fortune Magazine" (annual survey of America's most admired corporations)
  • "Financial World" (survey of brand name value)
  • "Forbes Magazine" (list of the richest 400 Americans)