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Path Dependency in Corporate America: Apple v. Microsoft products
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October 07, 2011, 07:53 AM
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Having been a personal computer guy for a typical corporation in the mid-1980s, one of the things we computer guys talked about a lot, both at the time and in hindsight throughout the 1990s, was whether we had made a big mistake going down the IBM PC/Microsoft path rather than the Apple path. I tended to think we had been mistaken because the productivity advantages of being on the Apple Macintosh path would have paid off over the decades. But it was very hard for me to identify a point where we should have made the switch. 

A stylized example of the typical situation facing us was that, say, after two years of introducing PCs into the company, we had 10% of the workforce on PCs. We could likely get a big enough budget this year to raise that total to 20% in 12 months, and if we executed correctly, an even bigger budget allotment to raise the percentage to 40% in 24 months. On the other hand, if we had switched to Apple, the higher upfront per user cost would have meant our budget wouldn`t have stretched as far. Plus, there would have been a period of adjustment for us computer guys that would have slowed our ability to roll out computers to more users. So, maybe after 24 months we`d only be at 25% computer usage rather than 40%. And that would be hard to justify to management. And to ourselves.

Looking back from the perspective of 2011 when we would have had 100% computer usage for 15 or more years, well, then even small productivity advantages of a few percent per year for the entire workforce for using Macs over PC/Windows make Macs seem like a no-brainer. On the other hand, that long-term orientation assumes a low discount rate that`s not really justifiable. We had a very short term orientation because we were competing in a rapidly changing three-company industry that only had room for about 1.5 competitors. We managed to survive because we drove one rival out of business, but still nearly went broke several times ourselves, so we didn`t actually ever have much of a margin for an expensive switch.

Okay, now that I`m done writing this, I notice that Kevin Drum, who is about the same age and has a roughly similar career path (such as it is) as I do, has put up exactly the same post. But his is a lot better than mine. So, if you are interested in this topic, read his instead of mine.