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At the company that I work we have a successful software product that did well but is now obsolete and unmaintainable. I am trying to explain that you need to innovate and replace this product with new offering in order to survive. I am looking for some good examples of companies that made the mistake that we are close to making - relying on one successful product way over it's normal lifetime, so I could use it as illustration when making an argument.

These products need not be software, emblematic cases that illustrate well this situation but where product was not software are also appreciated.

Rubén
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Dan
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21 Answers21

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Netscape. Complete stack - from Web server and other server side software (THAT was crappy) to the browser that got technically sideballed by Microsoft (and no - the windows integration was AFTER they actually won the war).

I was there at that time (working as IT consultant) - Netscape's web browser went from "NICE" to "BLOATWARE" in the time MS IE went from "damn, what a crap" to "actually better than Netscape".

Then Netscape started to totally rewrite their stuff - which meant YEARS without a new version.

luvieere
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TomTom
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    Strangely Microsoft didn't learn from that. They didn't improve IE 6.0 for years, thereby allowing Firefox take a huge chunk of their market share. Though they didn't go bankrupt. :) – Mark Byers May 21 '10 at 18:27
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    Actually STILL a perfect examlpe. MS got sneaky (IE bundling) way after netscape lost. Then MS totally stopped (disbanding the IE team) and got owned by others. Innovation IS key. – TomTom May 21 '10 at 18:41
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    Just looked at Netscape Navigator timeline. Doesn't seem like they didn't try to innovate, they just failed. For example, it took a lot less time to go from version 3 to 4 than it took to go from 1 to 2: http://en.wikipedia.org/wiki/Browser_timeline – Dan May 21 '10 at 18:54
  • PERFECT example! They had all the market share, then tried to innovate and it took too long and they lost it all! – Brian T Hannan May 28 '10 at 18:20
  • @Mark Byers: It helps to have billions and billions in the bank along with your fingers in lots of different pies. – NotMe May 28 '10 at 20:01
  • JWZ:`We changed the world [...] in 1994 and 1995. What we did from 1996 through 1999 was coast along, riding the wave caused by what we did before. Why? Because the company stopped innovating.` http://www.jwz.org/gruntle/nomo.html – Remus Rusanu Oct 09 '10 at 05:18
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VisiCalc for the Apple II was the first spreadsheet program (i.e. 100% market share) and is considered by many the killer app that made owning a computer important for business rather than as a hobby. In that sense, it paved the way for the PC, yet failed to make the transition to that platform well, and was supplated by Lotus 1-2-3 and later Excel.

WordPerfect was for a time the dominant word processing app. It fell prey to a delayed and low-quality move from DOS to Windows.

Michael Borgwardt
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  • not only the product failed (long term), but also the book "Almost Perfect" on WordPerfect: http://www.wordplace.com/ap/ – devio May 28 '10 at 17:54
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    WP: That was not low quality, that was Microsoft sabotage. There's a difference. – Stephan Eggermont May 30 '10 at 13:49
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    Bollocks. WP for Windows was low quality, and did a terrible job of importing WP for DOS documents. (Not that WP for DOS was all that great, either; WP 5.0 had the "patch of the week" for months after RTM.) – Eric Brown Jun 01 '10 at 21:23
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Sad but True: Borland.

They had a great product (Delphi) and put no innovation in it for about 7 or 8 years. Now they sold it to Embarcadero and they try to rescue what is left.

Sebastian P.R. Gingter
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In a word: 3DFX

They had a good product but failed to innovate like their competitor, Nvidia.

Nathan Osman
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    I was going to mention 3DFX, but you beat me to it. I remember that preceding their decline, they wanted to set themselves up as a proprietary vendor that customers would be locked into a la Microsoft Windows. You may remember "Glide", their proprietary 3d library that competed with OpenGL and Direct3D. They sued Creative Labs when they came up with a Glide compatibility wrapper for their hardware. They wanted to see software created that would only run on their hardware. – Vivian River Jun 01 '10 at 19:12
  • No, sorry. Bad example. THe problem of 3fdx was that they innovated in the wrong direction (faster rendering). Then nvidia came and their integrated pipieline made the 3dfx look stupid, hardly nay sold from that day. 3dfx ahd a VERY much better model right ready for sales when Nvidia came - tons of innovation, just in the wrong direction. So, NOT an example of NOT innovating. The 3d calculation bottleneck Nvidia solved broke their neck, desipte their evolutionary innovation. – TomTom Jan 19 '13 at 13:01
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Happens to search engines a lot. In the beginning I used Altavista a lot, then Yahoo a bit and now only Google. Might be switching to Yahoo back soon though.

Experts-Exchange isn't what it used to be. The better alternative (SO) is used a lot more (based on my own search results in Google).

ICQ, replaced by MSN Messenger (in our country).

We've also had this problem in the company I'm working at the moment. We had quite a good CMS (well, a bit more as a CMS, but let's keep it basic). In the years we maintaned and sold it, we always build new stuff in it, but based on the old architecture. Now it's grown so big that no one of us can maintain it anymore (original devs gone and no documentation). That's why we offer alternatives using Sharepoint now.

Jan_V
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    +1 for experts exchange, I lol'ed – BlueRaja - Danny Pflughoeft May 28 '10 at 17:47
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    When Google went public I told people it was a bad investment because all they had was one product, and if someone ever came up with a better search they would be toast. I no longer give investment advice. – Bremer May 28 '10 at 18:38
  • Back in the early days of the web, Lycos was used a lot for searches too, but after being sold and refocused, that dropped way off. – GreenMatt Nov 16 '12 at 18:43
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MySpace. Not quite bust yet, but the party's been over for awhile.

x1a4
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Polaroid seems like another good example. The advent of digital imaging and photography just passed them by.

G__
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  • Not sure I buy that. IITC they had all the innovation, just decided not to market it. Or was that Kodak? May not be a good example. – TomTom Jan 19 '13 at 13:02
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In a word: Evolution

Like every other aspect of life in the world around us, those which cannot adapt, become extinct. Companies, and the people that work for them, are no different. Ignore this at your peril.

Dave
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I see WordPerfect has been mentioned, but there's an even better example: MicroPro.

They developed WordMaster, the first ever Word Processing software, and then WordStar, which was incredibly successful for DOS.

What happened? Windows 3.0 came out. It became popular - ubiquitous, even. MicroPro didn't seem to notice or care. They didn't bother developing a Windows version. They didn't innovate. Eventually they bought and rebranded some other word processing software - but it was too late, Microsoft Word was already out.

Ask the average teenager or even twenty-something today; I doubt that any of them have ever heard of MicroPro or WordStar. They went from having one of the most important products ever made, to bust, simply because they waited too long to update their product suite.

Aaronaught
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I guess examples can be found in the (fast moving) gaming industry.

Some companies try to uninspiringly keep selling iterations of a once successful franchise (and releasing horrible sequels in the process).

A known company would be the once big Midway filing bankrupcy ; they were behind the long-running Mortal Kombat series (whose first entries are iconic in many aspects).

ChristopheD
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  • I remember Mortal Kombat. I used to frequent the arcade and I remember when "Mortal Kombat 2" was released, you had to stand in line for a while to play it. Each successive release seemed to draw fewer players and have shorter lived popularity. – Vivian River Jun 01 '10 at 19:14
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DEC (Digital Equipment Corporation) pretty much invented the minicomputer with the PDP and improved on it with the VAX. However, Alpha notwithstanding, they pretty much put all their eggs into the minicomputer basket and (ironically) missed the PC revolution (and when they did try selling a personal computer they went the wrong way). Granted that's a bit of an oversimplification. They were only "saved" by selling themselves.

GreenMatt
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  • I remember that one... I had the "joy" developing software for the PRO-350 for a while. Basically, a PDP-11 tossed into a desktop box with a forms and menu based UI. DEC produced some of the most innovative mini-computers and operating systems, but they really crashd badly on the desktop. But, hey, I don't think this is the message Dan is looking for! He needs a failure-to-success scenario, this one went the wrong way, which is the other side of the innovation coin. – NealB May 28 '10 at 18:38
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    @NealB: Thanks for the comment. Maybe you're correct about what Dan wants, but my understanding is that Dan wants examples of companies that had success with one product/line but then failed to go beyond that product/line and went under due to that failure. If that understanding is correct, I think DEC qualifies. – GreenMatt May 28 '10 at 18:46
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Not really an innovation failure, but a management failure, Commodore was the first to show a personal computer, the first to deliver low-cost computers to the masses, the first to sell a million computers, and the first to arrive with a true multimedia computer. If they had played their cards right, they could have been today’s Apple.

Bremer
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    Amiga rulez! If the companies that acquired it didn't went bankrupt and took advantage of the product and innovate on it, it would be today's Apple **^ 10**. Such a waste of technology. – stagas May 31 '10 at 12:24
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I think Blockbuster is a good example of this, albeit not a software company (but that might be more apt for your audience). They dominated the market for years, but it was just the same product and service. Then comes along a new company (Netflix) with a fresh take on movie rentals, and now Blockbuster is all but dead.

David Laughlin
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    RedBox has also found a way to exist in the void left by Blockbuster, but not quite filled by Netflix. – dacracot May 28 '10 at 20:25
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Palm -- you can't even hotsync with a 64-bit OS. If they had turned it into a phone .. what would be the difference between that and the iPhone?

Larry Watanabe
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Facebook is going to have problems soon if they don't change their privacy issues. Facebook also has issues with their interface being worse than it once was. Notifications don't work right. The feed is real wacky.

MySpace and Friendster didn't change fast enough prior to Facebook. Especially MySpace. I don't know what they were thinking with their bloated ad-corrupted interface for so long. They've made a nice adjustment now going for bands and such, but they could have been the dominant player.

John Cruz
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  • We've been hearing/reading that sort of thing about FB for years, and eventually it may prove true. However, here we are almost 2 and 1/2 years later and FB just seems to keep growing ... – GreenMatt Nov 16 '12 at 18:46
  • They still have issues with privacy, but they have kept ads to a minimum, and they do frequently update the interface (not that I like all updates). It's a very interesting story to watch play out if nothing else. – John Cruz Nov 17 '12 at 18:16
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Companies get bought, products get recycled, renamed, etc., so all depends on the meaning of "going bust". Companies like Novell, Borland, Corel come to mind, but they still seem to exist, though not as important as they used to be.

Pick your favorite from wiki categories Defunct software companies and Companies disestablished in....

devio
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Digital Equipment Corporation, they dominated the mainframe market with PDP-11's and other similar machines, but they failed to switch to the market of PCs, and in 1998 they were toast. Similar fate befelled SGI.

whatsisname
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    Perhaps I'm being too picky, but DEC made [minicomputers](http://en.wikipedia.org/wiki/Minicomputer), not [mainframes](http://en.wikipedia.org/wiki/Mainframe_computer). – GreenMatt May 28 '10 at 19:17
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Have them read The Innovator's Dilemma, by Clayton Christensen - an entire book describing why companies need to replace/cannibalize their own products, before someone else does.

John C
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As you might have read, Apple surpassed Microsoft recently (market value). The culprit? According to the article:

"It's more than just Mac versus PC," said Yair Reiner, an analyst at Oppenheimer & Co. Inc. "The market sees Apple as an engine of innovation and growth, but with Microsoft, the vast majority of its profits come from products that been in the market for a long time."

"Microsoft has been the workhorse of the PC revolution, but it's seems that horse is running out of new tricks."

You just have to check the stock price comparison for both companies, and you will see that while Microsoft remained stagnant for TEN FREAKING YEARS, Apple, Inc. started growing rapidly in the later part of 2004. Now it is the bigger player.

Escualo
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SGI

They essentially founded the 3D graphics industry. Then they started sitting back on their laurels and spent the past 15 years withering. Recently their last remaining assets were sold off for peanuts.

Alan
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Infocom.

There's an interesting documentary called GET LAMP on the rise and fall of the text adventure (or interactive fiction if you prefer) games.

TrueWill
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    Actually, Infocom may be an example of a cautionary tale about innovating and branching out, instead of a failure to innovate: My understanding is that Infocom got into financial trouble after issuing their [Cornerstone](http://en.wikipedia.org/wiki/Cornerstone_%28software%29) database, their first (and only) business product. It didn't sell well, but was expensive to develop and support. As a result, [Activision](http://en.wikipedia.org/wiki/Activision#History) bought Infocom, but (if Wikipedia is to be believed) political discord within Activision over the purchase doomed Infocom. – GreenMatt Nov 16 '12 at 19:19