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Unbundling the corporation
In the late 1970s the computer industry was dominated by huge, vertically integrated companies such as IBM, Burroughs, and Digital Equipment. With their vast advantages of scale and huge installed base of users, these companies seemed to be unassailable. Yet just ten years later, power in the industry had shifted: the behemoths were struggling to survive while an army of smaller, highly specialized companies was thriving. What happened?
The industry’s transformation can be traced back to 1978, when a then-tiny company, Apple Computer, launched the Apple II personal computer. The Apple II’s open architecture unlocked the computer business, creating opportunities for many new companies that specialized in producing specific hardware and software components. Immediately, the advantages of the generalist—size, reputation, integration—began to wither. The new advantages—creativity, speed, flexibility—belonged to the specialist.
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© 1992-2003 McKinsey & Company, Inc
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