It just boggles my mind that a decade and a half after Innovator’s Dilemma and Innovator’s Solution came out, which I’m sure every CEO has read so far, there are still so many companies that repeat every damn mistake in the book. Heck, IBM is actually given as prime example for why big companies fail, with their past failure in the micro-computer market.
I mean look how crazy this is. IBM sells the server business because it’s “not profitable for them”:
“It’s underperforming because of the cost of doing business on IBM’s side,” he said.
But on the other hand, Lenovo wants it because they consider it a profitable business:
“Low-cost servers are the fastest-growing, most attractive area of the server business right now, so this would make sense,”
http://www.bloomberg.com/news/2013-04-18/ibm-said-to-be-in-t...
This was written to the letter in Innovator’s Dilemma – a decade and a half ago – and yet IBM still failed to see it coming. Some companies just deserve to burn. There’s no excuse.
Companies getting disrupted need to adjust their cost structures, if not they need to create entirely new business spin-offs that can act as independent businesses. This was discussed in Innovator's Solution. It would've given them the ability to actually make money off of this "fast growing sector" like Lenovo calls it. But because of their current cost structures, they can't do it now.
They are now moving up-market to software and services, and letting Lenovo, a down(er)-market player take this business away from them. What do they think will happen in 5-10 years? Lenovo (or some other PC player/new server player, currently) will move up-market yet again, and do what IBM does cheaper, while still being very profitable, while IBM will be forced to sell that business, too. The solution to disruption isn't to run away (at least not in the long-term).
This will happen to Intel, too, within 2-3 years. Right now, Intel makes 70 percent of its revenue from ~$200 chips in the PC market. In 2, maybe 3 years at most, that business will be completely commoditized, as ARM chips reach similar performance levels at much low cost.
Intel has tried, with little success, to enter the mobile market, but right now they aren't making any money, and are in fact losing money with Atom chips, especially since they're paying OEMs to buy their chips [1] (anti-competitive? You tell me).
Trying to succeed with Atom is sort of the right solution, but if they aren't going to make money with their own cost structures, then it's going to fail. Trying to succeed with Core chips by lowering power consumption is a losing proposition because those chips are much more expensive.
[1] - http://www.computerworld.com/s/article/9245530/How_Intel_is_...