Old technologies die hard
The article below first appeared in the daily Fortune newsletter Data Sheet. Subscribe here for a daily dose of analysis from Adam Lashinsky and a curation of the day’s technology news from Heather Clancy.
The story of the demise of the Sony Betamax caught my eye Tuesday afternoon. I’m old enough to remember the VCR format wars of the 1980s, and I thought Betamax video was long gone. Not so, reports Fortune’s Robert Hackett. Although Betamax production peaked in 1984, amazingly Sony kept making the player/recorders until 2002. Apparently someone kept using them, because Sony has announced it will stop shipping the cassettes next year. They lasted 40 years, which isn’t bad for a failed product, especially one whose popularity peaked in the middle of the Reagan Administration.
That got me thinking about how hard it is to kill old technologies. I know almost no one who isn’t an investment banker who uses a BlackBerry. Yet that beleaguered company has a market capitalization of $4 billion. The heyday of the mainframe computer was the 1960s. Still, IBM not only continues to sell them, it introduced a brand-new line earlier this year, the z13. “Built for the mobile era,” IBM brags about the system in its 2014 annual report, while also asserting that its mainframes “process 75% of the world’s business data.” The mainframe is part of a rapidly declining business at IBM, yet the company continues to invest heavily to reverse the trend.
Examples of graying technology that persevere abound. While reporting an upcoming feature in Fortune Magazine about athletic footwear king Nike, I spoke to apparel analysts who praised Nike’s masterful use of SAP software to manage its global inventory and distribution system. SAP? Isn’t the German company mocked in Silicon Valley for being hopelessly behind on the cloud, the hipper virtual way to deliver software services? I asked around and found out that yes, SAP is behind, but no newfangled offering can hold a candle to SAP’s industrial-strength handling of physical-goods companies like Nike.
The bright shiny objects of technology are exciting, new, and absolutely the future. But don’t count out the rusty old tech war horses just yet. They’re extremely difficult to kill.