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http://www.insanely-great.com/news.php?id=594
Taligent: Where Did Apple and IBM Go Wrong?
By Remy Davison, Insanely Great Mac
July 2nd 2002
The death of the corporate strategic alliance?
An article at Forbes.com, entitled "Why Strategic Alliances Don''t Work", uses
Apple''s Taligent venture with IBM in the early 1990s as a case study.
Taligent was the Apple-IBM attempt to create an object-oriented OS which would succeed
OS 7 for Apple, and provide a killer OS for x86 hardware for IBM. As Jim Carlton noted
in his book on Apple, "What do you get when you put Apple and IBM together? Apple."
Taligent was only one joint venture for Apple which wound up at a dead end. Others
included the ''Star Trek'' project (Mac OS 7.0 on Intel - Roger Heinen, who project
managed that one, joined a tech venture capital firm as MD about two weeks'' ago);
PowerPC (Apple/IBM/Motorola); and PhotoCD (Apple-Kodak). All of these deals were
brokered under the stewardship of ''Chief Technology Officer'', John Sculley,
long-time CEO of Apple.
Do strategic alliances work? asks the Forbes article. Maybe. There should be little
argument that the Apple-Microsoft pact has worked for both firms. And, on a
transaction cost basis, it has been far more beneficial to Apple.
Of course, in a sense, IBM has been far less successful than Apple at choosing its
partners. The early IBM-Microsoft alliance ended with MS as king. And Intel was
virtually handed the chip market on a plate by IBM decreeing the x86 would power its
PCs, thereby handing the keys to the instruction kit to Intel CEO Andy Grove.
We disagree with Forbes'' analysis of Apple/IBM, however. Bill Robinson claims that,
from the outset, the two firms did not trust each other, evidenced by the outstanding
law suits the two were fighting. But this was not unique to Apple/IBM. Despite the
years of outstanding patent disputes between Apple and Microsoft, Apple could still
knife long-time Mac developer Adobe over PostScript and hand Microsoft a technology
that would make or break Windows: TrueType.
Robinson argues that it was - maybe still is - vogue-ish to have VPs in charge of
strategy, strategic alliances and so on. And then he points an accusing finger at the
AOL-Time Warner merger. Mergers are very different from strategic alliances of course.
But both serve the same purpose: they assume there is a dominant/dependent
relationship. But even the dominant player may need something the more vulnerable
player may have. So it was with TrueType.
With Apple/IBM, these were two declining giants at the time, facing the dual threat of
Microsoft/Intel. So it is with HP-Compaq. A merger, yes, but born of necessity. HP
doesn''t really ''need'' Compaq, except for the talented people (are there any?), so
it can cherry-pick human resources and assets. That gives HP a lot of scale so it can
price-match Dell and IBM. The former is a tough competitor on the desktop (and less of
a problem in server markets) and IBM (an eservices behemoth).
Analysis: If you ever find yourself a VP of Strategic Alliances, just ask one question
when faced with a potential partner:
Who wins?
Who loses?
(n.b., this works with wives/husbands/girlfriends/boyfriends/in-laws as well).
Post your comments at:
http://www.insanely-great.com/news.php?id=594
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