Today, mainframe sales are a fraction of the personal computer market. But with the mainframe facing extinction, IBM retooled the technology, cut prices and revamped its strategy. A result is that mainframe technology remains a large and lucrative business for IBM, and mainframes are still the back-office engines behind the world’s financial markets and much of global commerce.

The mainframe stands as a telling case in the larger story of survivor technologies and markets. The demise of the old technology is confidently predicted and indeed it may lose ground to the insurgent, as mainframes did to the personal computer. But the old technology often finds a sustainable, profitable life. Television was supposed to kill radio. Cars, trucks and planes spelled the death of railways. What are the common traits of survivor technologies? First, it seems, there is a core technology requirement: there must be some enduring advantage in the old technology that is not entirely supplanted by the new. But beyond that, it is the business decisions that matter most — investing to retool the traditional technology, adopting a new business model and nurturing a support network of loyal customers, industry partners and skilled workers.

The unfulfilled predictions of demise, experts say, tend to overestimate the importance of pure technical innovation and underestimate the role of business judgment. “The rise and fall of technologies is mainly about business and not technological determinism,” said Richard S. Tedlow, a business historian at the Harvard Business School.

Technological ecosystems
To survive, technologies must evolve, much as nature. Indeed, John Steele Gordon, a business historian and author, observes that there are striking similarities in the evolutionary process of markets and biological ecosystems. Dinosaurs may be long gone. But smaller reptiles evolved and survived, and today there are more than 8,000 species of reptiles, compared to about 5,400 species of mammals.

As a media technology, radio is an evolutionary survivor. Its time as the entertainment hub of American households in the 1930s and ’40s gave way to the rise of television. TV replaced radio as the box families gathered around in their living rooms. Instead, radio adopted shorter programming formats and became the background music — “audio wallpaper,” as Paul Saffo, a technology forecaster in Silicon Valley, puts it. “Technologies want to survive, and they reinvent themselves to go on,” he said.

The survivors also build on their own technical foundations as well as the human legacy of people skilled in the use of a technology and the business culture, the economic environment and habits that surround it. The mainframe owes its longevity to sound business decisions. IBM overhauled the insides of the mainframe, using low-cost microprocessors as the computing engine. The company invested and updated the mainframe software, so that banks, corporations and government agencies could still rely on the mainframe as the rock-solid reliable and secure computer for vital transactions and data, while allowing it to take on new chores like running Web-based programs.

“The mainframe survived its near-death experience and continues to thrive because customers didn’t care about the underlying technology,” said Irving Wladawsky-Berger, who led the transformation of the mainframe in the early 1990s.

The mainframe doomsayer, Mr. Alsop says, his 1991 prediction was wrong only in the timing. IBM has drastically reinvented the mainframe technology and its business model that the mainframes he wrote about are long gone. “It is a different world,” he said.


The New York Times