Four Tech Tales of Doom: Goodbye HP, Dell, Nokia and RIM

The dynamic shift toward computing in the palm of your hand and storage in the cloud is bleeding four former Goliaths -- from creaky computing stalwarts like HP and Dell to recently pioneering mobile behemoths, Nokia and Rim. All four of these companies desperately need fresh strategies and narratives.
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Thirty-five years ago Kenneth Olsen, CEO of the pioneering DEC (Digital Equipment Corporation), stood poised to dominate computing for another generation. The brilliant Mr. Olsen had profited immensely by going small -- building efficient mini-computers in the age of hulking mainframes. By the mid 1980s DEC's revenues were peaking and its status seemed certain as the second largest company in the industry. Fortune named Olsen America's most successful entrepreneur in 1986.

But DEC was already doomed. Mr. Olsen had long ago stopped thinking like an entrepreneur. A decade before at the World Future Society he had announced like an emperor, "There is no reason for any individual to have a computer in his home."

The year was 1977 and the industry's two Davids rebelled. A year before Steve Jobs and Steve Wozniak had started selling the Apple I for the price of $666.66. The revolution was in full swing -- even IBM jumped in aboard in 1981 with its IBM PC. DEC's willful blindness in the mid '70s and early '80s to the ubiquitous miniaturization of computers proved a Tsunami to its business model. In 1998, Digital Equipment Corporation, the erstwhile whale, was swallowed up by what had only a few years before had been a tadpole -- the upstart Compaq.

More than a century ago the philosopher George Santayana wrote, "Those who cannot remember the past are condemned to repeat it," wisdom frequently ignored by politicians, generals and tech CEOS. Today a herd of technology whales seem condemned to repeat DEC's past. The threat is nothing new -- computers are getting a whole lot smaller! Apple, Google, Samsung and Amazon are all taking advantage of this seismic shift, dominating the future in "the palm and the cloud," albeit in radically different ways.

The dynamic, humanistic shift toward computing in the palm of your hand and storage in the cloud is bleeding four former Goliaths -- from creaky computing stalwarts like HP and Dell to recently pioneering mobile behemoths, Nokia and Rim. It's not yet time to write obituaries, but all four of these companies desperately need fresh strategies and narratives.


1. HP: Treading Water

Two years ago HP paid $1.2 billion for Palm to jumpstart a belated foray in cell phones and tablets -- and struck out. Last year, CEO Meg Whitman proudly declared HP was in the hardware business (PCs, printers, storage, network). This just one month after her predecessor abruptly announced it was getting out of PCs and then aborted that sale.

Hewlett Packard has been treading water and staying afloat by tossing workers overboard. As the company has seen huge chunks of business won away by compelling mobile phones, tablets and laptops from Apple and Samsung, HP's PC business has begun to look as dated as its printer business. HP excels at last generation hardware: PCs, printers, and servers -- uncannily similar to the way DEC excelled at minicomputers in the mid 1980s. Just like DEC, Hewlett Packard fails to inspire lust from consumers. The simplicity and design that has inspired Apple is missing. HP lacks the guts and vision to carve out a bold narrative to help consumers see the future of print (Yes, there is one!). And then there's the gray HP engineer mentality, which has led it to make far too many models of indistinguishable products (does the world need a dozen "different" HP LaserJets?)

In the meantime IBM (like Houdini escaping the limits of its past and size) is beating HP in services, while Amazon has a leg up in the cloud, leaving HP's future hazy. "There are big changes going on and we have to position ourselves." Meg Whitman told the New York Times in late May, just before announcing plans to cut 27,000 employees. "HP has an opportunity in cloud that no one else does."

Isn't it a little late to be talking about opportunity? HP has punted on countless opportunities the last decade. This is a company that desperately needs initiative before the only choice that remains is to become the next DEC.

2. Nokia: Grabbing the Microsoft Life Raft

In February 2011, new Nokia CEO Stephen Elop sent a blistering email to employees, telling them their "platform was burning." Two days later, he accepted the life raft of a partnership with Microsoft to create Windows phones. The critics have not been kind, dubbing the latest model a "niche. And a small one at that."

Windows 1.0 was released in 1985, and there's something bizarre about Nokia, a former worldwide cellular phone leader, lashing itself to a colossal PC software monopolist (the software version of DEC) that bungled the Internet and the mobile trends of the last decade.

How is that life raft working? Nokia's stock was recently downgraded to junk status, trading well below $3.

3. Dell: The Triple Play Blues

Dell can't decide who it wants to be. The company reportedly has been walking away from major PC sales in China, fearing it couldn't survive a pricing war. Dell is kind of like a batter with shaking knees down one run with two out and two men on in the bottom of the ninth. Without any passion for any product or market Dell has hit into a triple play, tagged out by the formidable competing lineup of Apple, Amazon and Lenovo.

Dell's PCs and tablets are simply not major league quality.

The only surprise is that Dell has hung on this long. I collaborated with IDEO on two books about innovation, and a dozen years ago I heard many an IDEOer bemoan Dell's anti-design ethos. Dell's laptops and tablets have been battered on the high end by Apple and on the low-end by China's upstart Lenovo, leaving Dell no-end.

Up in the cloud, meanwhile, Amazon is raining on Dell's chances to dominate new markets.
There's yet another irony in this triple play. IBM wisely got out of the commodity PC business years ago -- selling its PC division to Lenovo in 2005, and taking a minority stake. Last year Lenovo passed Dell to become the number two PC brand worldwide, leaving Dell in third and destined to soon sink to an irrelevant fifth with the rise of Apple and Samsung.

4. Research In Motion (RIM): "You Can't Go Home Again"

My branding friend Marc Hershon of Lexicon Branding helped name the BlackBerry, which not long ago was one of the world's leading brands. Like so many companies we've been discussing, RIM expertly rode the first wave of enterprise solutions, catering to corporate IT buyers. That worked for a long time -- and then came the new wave of individual choice and design. RIM imagined it had a lock on "Servicing the Enterprise," and then discovered far too late that Apple's stylish iPhone and iPad had done an end-around on its business model. Today, BYOD rules -- "Bring Your Own Device" and consumers outweigh corporations when it comes to influencing mobile sales and tastes. RIM's sales are in a tailspin, and its sales chief and top lawyer just joined the long list of executives jumping ship.

New CEO Thornstein Heins has derided recent attempts to "be everybody's darling and all things to all people" and has bullishly declared in Corporate-Speak, "We plan to refocus on the enterprise business and capitalize on our leading position in this segment."

Translation: RIM is raising the white flag to Apple and Samsung and is beating a quick retreat to an old crumbling core business.

Thomas Wolfe wrote that story in 1940 -- "You Can't Go Home Again."


What can we learn from these doomed tech stories? Perhaps the moral is that staying on top is a little like the children's spinning "top" toy. It is the rare company capable of striking the nimble, shifting path of an IBM or Apple, achieving that near magical attitude of perpetual motion by shedding the past and seeking out new opportunities for growth.

Five years ago, Apple dropped the word Computer from its name, signaling a bold shift into cell phones, tablets, and if rumors are to believed, televisions. It's never a sure thing, but the often forgotten lesson of Digital Equipment's collapse is that the only "tops" that survive find a way to keep on spinning.

Jonathan Littman is the founder of Snowball Narrative and co-author of The Ten Faces of Innovation and Art of Innovation with Tom Kelley of IDEO.

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