The first is the standard:
> In a Quora thread that asked the question “Why did Digital Equipment Corporation fail?” it was interesting to see so many previous DEC employees and members of the MIT community speak up about what they noted during their tenure there. Almost unanimously, they supported the theory—also commonly held by experts—that the failure of the company ultimately fell to the leaders who were unable to foresee what was coming in personal computing and were not able to take decisive or quick enough action in time to save the company.
The second is the Innovator's Dilemma:
> “Digital Equipment Corp. had microprocessor technology, but its business model could not profitably sell a computer for less than $50,000. The technology trapped in a high-cost business model had no impact on the world, and in fact, the world ultimately killed Digital. But IBM Corp., with the very same processors at its disposal, set up a different business model in Florida that could make money at a $2,000 price point and 20% gross margins—and changed the world.”
The latter seems to fit better with the evidence. The timeline in the article makes it clear that DEC saw where things were headed and tried moving in those directions.
But there's a big difference between little experiments and betting the company on an auto-cannibalization strategy. DEC didn't have the guts to go there.