Editor’s note: This article was first published in May 2011. The market values it cites are from that month: IBM at $203.8 billion, about $100 million above Microsoft, and Apple at $309 billion, along with the US top-five ranking.
After 15 years, IBM has managed to overtake the company that, in its day, made use of it. IBM has reached a market value of $203.8 billion, $100 million more than Microsoft, a company whose growth is slowing in the rankings. First it was overtaken by Apple, its biggest competitor, where Steve Jobs has now driven his company’s value up to $309 billion.
The commercial “war” between IBM and Microsoft goes back to 1980, when IBM worked with Microsoft on operating systems for its computers. Later, Microsoft split from IBM to pursue its future business in software, while IBM kept betting on hardware.
In 1996, Microsoft managed to overtake the old giant in market capitalization, so IBM brought in new professionals with the aim of focusing on enterprise software, Microsoft’s weak spot in the United States, where Apple is “king”.
It has taken IBM 15 years to get ahead of Bill Gates again, but it has finally done it. The ranking of the US companies with the highest market capitalization now looks like this:
- Apple
- Exxon Mobil
- General Electric
- IBM
- Microsoft
IBM has shown that it can spot market trends and innovate relative to its strong competitors. The changes in its management were welcomed by the company’s shareholders, who now have their sights set on the next step up, to third place.
As for Microsoft, rumours have already surfaced saying “they’re dying from a lack of innovation”, which may be why it is looking for a way to team up with Zuckerberg, where Facebook could give it a new direction and business vision.
In times of crisis, if you don’t innovate and open up new markets, your business tends to disappear or be overtaken by your competitors.
Further reading
Featured image: Erik Pitti, CC BY 2.0, via Wikimedia Commons.
