Microsoft's situation in 2014 is eerily similar to IBM's in the late 1980s, and it can save itself the same way.



From Computerworld:

Much like Microsoft, IBM spent years at the top, acclaimed as an innovative and seemingly all-powerful company. Both were at one time the default vendor for a lot of IT departments. But by the late 1980s (about the time that Microsoft was really coming into its own), IBM had become a bloated and slow-moving behemoth, living off the glory days of the mainframe and tied to low-margin businesses. The PC was ascendant, and though IBM had had much to do with that, it was having a hard time cashing in amid cutthroat competition. Worse, the new client/server architecture was seriously undermining its mainframe business. IBM flailed as it tried to set things right, at one point organizing itself into business units that operated somewhat like separate fiefdoms.

Earnings, which had consistently been above $5 billion in the early 1980s, fell to $3 billion by 1989. In 1992, IBM had what was then the biggest one-year loss in U.S. history, a whopping $8.1 billion.

  Preston Gralla: Memo to Nadella: Copy IBM