There were times when we lost money on every PC we sold, and so we were conflictedâif sales were down, was that bad news or good news?
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I had learned a hard lesson at RJR Nabisco: A company facing too many challenges can run out of cash very quickly.
The discussion that ensued was very sobering. IBMâs sales and profits were declining at an alarming rate. More important, its cash position was getting scary.
It became clear to me at that point that the company, either consciously or unconsciously, was milking the S/390 and that the business was on a path to die. I told the team that, effective immediately, the milking strategy was over and instructed them to get back to me with an aggressive price reduction plan that we could announce two weeks later at a major customer conference.
Many IT companies that have built their businesses on some proprietary product have tried to leap across that chasm. Few have made it across successfully.
I can understand the joke that was going around IBM in the early 1990s: âProducts arenât launched at IBM. They escape.