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January 13, 2005

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Srini

About 4 years back, we were making a presentation on Nokia's prospects for an end-term exam. While all the other teams were excited and upbeat about Nokia's prospects, we were the only team which had some doubts. Our central theme was that innovation (expecially the disruptive sort) always happens in fringes; add to this the fact that today we are throwing out most industry definitions, it will be impossible for any company (even if it is a market leader) to get its arms round innovation.
I see the same dynamic at work here. Consider the enterprise IT market; broadly, I see 3 tiers: infrastructure, software & services. Now look at IBM; the highlight of IBM for the past few years has been services. But the unsung heros of IBM were in infrastructure. I was part of the corporate strategy team of an Indian IT services major a couple of years back; all our problems arose from the fact that IBM had a stranglehold on all key accounts because of their infrastructure work & sales.
Now, by giving away some patents, IBM seeds software innovation in the one disruptive model of software industry: open source. Like you said, this weakens Microsoft, while at the same time setting up the field nicely for IBM to waltz in with its infrastructure and services offerings.

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