Investment & Strategy: IBM's bet on System/360 (1964) and amazon's investment in Cloud (2004 onwards)

Comparing amazon's foray into infrastracture-as-a-service (IAAS) with IBM's development of its best-selling System 360 from a strategic perspective.

With IBM celebrating its 100year birthday and showcasing its great history, I stumbled across IBM's development of System/360 which - at development cost of 5 US$bn - is one of the largest investments in business history. See IBM's film at 1.24 min on Youtube for more information.

 

Now, see that in connection with amazon's ongoing investment since 2004 in cloud technology, services and content. A recent article in Germany's Financial Times Deutschland cites critical analysts which calculate a yearly loss of 105 US$m per year on amazon "Prime" and the respective Cloud Services for streaming of media and music. In a recent Wired interview Jeff Bezos explains the reason why: "...as a company we are culturally pioneers, and we like to disrupt even our own business...". It is quite similar to what Fred Brooks of IBM said back almost half a century ago "...in the late 50ies almost all of IBM's business lines were running out of steam...".

 

I reckon that Jeff Bezos does not want to get in such a situation...

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