Re:Deja Vu (Score 2, Interesting)

I've worked at companies that had the same kind of innovator's dilemma experience that DEC had. It's not pretty.

DEC was a large, successful company finely tuned for doing business certain ways. They had a channel of highly trained resellers who were used to spending lots of time working out solutions with customers, and who expected >40% margins on hardware sales in return. To get to that point, DEC would have had armies of employees dedicated to keeping the channel happy, and to sabotaging any internal initiatives that might upset their resellers.

Then the industry started to change. I didn't work at DEC so I don't know exactly how it played out, but I assume they tried to sell PCs through their reseller channel. Here's what their resellers were thinking:

"Let's see, I normally spend a week or two closing each sale. I could try to sell a $200K Vax this month (I just made that up, I have no idea what Vaxen cost), or I could try to sell a bajillion PCs for the same profit. Hmmm, how should I spend my time?"

DEC initiatives to do an end run around the resellers and sell retail would have been constantly undermined by the DEC reseller police.

Disruptive technology changes are incredibly hard to survive when they require diverting resources from high-margin businesses to lower-margin businesses. I don't know how SUN is going to manage it, with their extremely confused-sounding strategy about "we invented open source but you should be buying expensive Solaris boxes and isn't Java cool?"