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The digital wars.

It's a sad commentary on the human condition that you can trace the history of our civilization by chronicling our wars. And you can chart digital history as well, which should come as no surprise to any manager who has been handed a copy of Sun Tzu's Art of War by his or her boss.


In the beginning of the digital age, the mainframe was the computer, and the company with the simple mantra "Think" owned a veritable economic fiefdom. IBM had some competition from other big iron enterprises--the IBM S/360 was sometimes challenged by UNIVAC's EXEC, Kronos, and UNIX--but the real assault didn't begin until the microcomputers showed up.

The micro wars began with a situation that eerily resembled the introduction of gunpowder in the West during the Middle Ages. The giants within the corporate strongholds seemed secure, and the micro hobbyists' machines outside were curious but hardly a threat.

The Altair 8800 was introduced in January 1975, and the Altair BASIC programming language interpreter was being sold by a new company called Microsoft. Apple I, a hobby system, was also introduced in 1975. The Commodore 64, the TRS from Radio Shack--they were all somewhat absurd compared to the massive consoles and large tape racks of the mainframes.

But just as castle walls several feet thick could eventually be hammered to dust by month-long assaults by the small cannons, the PC displaced the mainframes, causing an abrupt economic shift as drastic as the one created by the displacement of the lords from their feudal fortifications. Even IBM got into microcomputing in a big way, so much so that the common parlance of the time accounted for only two kinds of microcomputers--Apples and IBMs.

As the dust from the hardware war settled, the OS wars kicked up a new storm that has continued to this day. Microsoft's Windows is in its seventh iteration, UNIX has been eclipsed by Linux and BSD, Apple has a UNIX-based OS, and the three continue to slug it out around the world. But all three have been threatened by a new hardware and a new OS--the Internet and its various browsers.


It was John Gage of Sun Microsystems who first declared, "The Network is the Computer." One particular network, the Internet, has offered the best example of his thesis so far. The Internet functions like a computer, and it is threatening the position of the microcomputer in a way that's little different from the micro/mainframe contest 35 years ago. In the past, Goliath was thousands of pounds of noisy, tape-reel twitching, heat-producing circuits. Today it's the laptop or the silent-running desktop, and David now appears as a worldwide mainframe constructed of miles of server racks. Curious reversal.

The OS wars have seen a number of new fronts open. The browser used by your computer functions as an OS for the connection you have to this planetwide computer system. In the classic PC arrangement, the user interfaces with the application, and the application gets its information and instructions from the computer by going through the operating system that sits between it, the application, and the circuits. Online, the computer accesses that information through a browser.

Microsoft understood the threat of both the Internet and specifically the Netscape browser. Launched in 1994, Netscape was offered as a free product, and by 1995 it was the dominant browser. With a vow to "cut off their air supply," Redmond offered a competing product, Explorer 1, which was also free, but to enhance its chances, it was welded to the Windows Operating System in a way that a federal court later objected to.

Figure 1 shows the rise and fall of several of the browsers involved in the conflict. The early leader, Netscape, which began with 84% of the market, had reached its last version in December 2007 when support for the browser was dropped and the company announced there would be no new versions. At the time, Internet Explorer had 77.4% of the market; Firefox, 16%; and Netscape, 0.6%. Since then, Explorer has been losing to Firefox, and at the time of the drafting of this chart (2009), Microsoft was losing a percentage point per month with all of the growth going to the Firefox browser.


Not included on this chart of combatants are Google and its new tabbed browser, Chrome. First offered at the end of 2008, the Chrome browser has captured 5.22% of the world market as of this writing and is now the third most widely used browser, according to Web analytics firm Net Applications.


One of the most interesting digital fronts has been the one fielding the conflicts between search engines. Given the number of resources online, deciding on a search engine is as critical as choosing a browser. One of the early leaders, AltaVista (launched in 1995), is still around, but the current leader, Google (1998), holds a serious lead at 49.2%. Yahoo! (2004) has a 23.8% share, and MSN (2005) is a distant 9.6%. Three interesting new search sites debuting in 2009 include Goby (, which searches "ways to spend your free time"; Bing (, Microsoft's latest offering; and Mugurdy (, which returns pages of screenshots of what it has found. It's a good idea to remain open to what's new because searching online can be a very idiosyncratic exercise.

Today, forces approach the PC camp as smartphones and now tablets strive to capture as much territory as they can. Above, the air war continues as the Internet expands, widening the skies as new cloud banks of applications appear every day.

By Michael Castelluccio, Editor
COPYRIGHT 2010 Institute of Management Accountants
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Title Annotation:TECH FORUM
Author:Castelluccio, Michael
Publication:Strategic Finance
Geographic Code:1USA
Date:Mar 1, 2010
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