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Technology Lesson For The New Era – Can You Do It Twice?

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Technology Lesson For The New Era – Can You Do It Twice?

Whether we like it or not, the big tech firms have shaped our everyday lives and continue to influence them. But recent times have also brought increased legislation as lawmakers do their best to limit the power and influence of these companies.

However, it's not the impending regulation that interests me. There is one consistent theme in technology, and that is companies that dominate one paradigm shift rarely dominate the next, even if they see them coming. I'm interested in companies that buck this trend. 

The Kingdom Of PCs And Clouds And Mobiles

IBM (NYSE: IBM) saw PCs coming, yet it outsourced the most valuable aspect of the technology to Microsoft Corporation (NASDAQ: MSFT) and Intel (NASDAQ: INTC). Microsoft and Intel in turn dominated PCs, yet they did not manage to do the same with the mobile market, which was taken over by Apple Inc (NASDAQ: AAPL). Apple has made us go crazy over the iPhone indeed, but it has been relatively unsuccessful in the cloud sector compared to its competitors.

Focusing further on Microsoft and Apple as examples: Microsoft dominated PCs, missed in mobile, but retooled and is now a giant in cloud services. A giant so big that it has beaten Amazon.com, Inc. (NASDAQ: AMZN) in winning the Pentagon's JEDI contract. Although a judge has halted the contract, the potential of Microsoft, the reason for which it was chosen, is undebatable.

Apple was a leader in very early PCs only to lose that battle to Microsoft and Intel. As a result, it retooled its entire business to focus on mobile. But that ultimately made it difficult to build a big cloud business, even though Apple was early in offering cloud services to consumers. And now? Apple is repositioning itself as a service company. Of course, whether Apple TV+ manage to eclipse the streaming emperor Netflix Inc. (NASDAQ: NFLX) and content king Walt Disney Co (NYSE: DIS) is an entirely different question. 

The Takeaway

These companies were built with an idea to disrupt the status quo, but the truth is that many are back to square one when the next shift begins. And the pace is only getting quicker. In the end, these companies find themselves asking the same questions as the companies they disrupted before- why change everything about your highly profitable core?

It seems the best thing to do is shift the direction immediately after it's become apparent you've lost just one round, and leapfrog to a new one that you can build a business around. Baby steps are key, even for giants as this can only make them flexible enough to follow through change.

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