Most of the growth in computing these days is coming from small firms wiring up new networks with inexpensive computers. These small machines generally sell for thousands of dollars, not millions, and they are selling fast enough to push upstarts like Dell to the front of the market, well ahead of No. 1. Gerstner, in contrast, still believes in big iron. The decision almost killed the company. Gerstner at least has stripped away the division's techno-worshipping culture and replaced it with an outlook that's more McDonald's than McDonnell Douglas.
Software is a trickier problem.
They're being outmaneuvered by Netscape and Microsoft. Gerstner insists that the hardware-software balance he has struck so far is the right one. I've been on the other side. It is far more complex. It is that complexity, of course, that will ultimately decide IBM's fate.