Intel Beyond Tomorrow and what Open Source can learn

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I recently read a case study describing some of the challenges faced at Intel during the late 90’s after the bubble burst on all the web companies who where running businesses without a clue how to turn a profit. I’ve been thinking a lot about how things of this nature affect the rest of the industry and how everything in technology seems to be related in some way.

The case study described with some of the challenges Intel faced since the reduction of PC sales in the late 1990’s. Intel was faced with a reduction of sales of its core business that it had not seen since it decided to move its core business away from the DRAM market and focus mainly on microprocessors. Intel had experience stellar growth of its core business all through the 90’s, but this growth was mainly due to the number of personal computers sold and Intel’s dominant position as a producer of microprocessors for those computers. As the market for Personal Computers declined so did Intel’s ability to grow profits.

The company’s management realized they would not be able to continue to rely totally on the microprocessor business to sustain their growth so the company begin an aggressive acquisition phase and put billions of dollars into R&D projects. The company experienced varying success with these endeavors and many of the products they invested in where quickly abandoned without Intel realizing any return on investment for their efforts.

This shows how it is important to recognize the market conditions a company operates in and change the strategy of the company based on those factors. While the company’s management made several mistakes during in their attempt to expand the company’s offerings, their efforts where not without some value. The company was learning about their environment and moving the company towards a position going forward in which they will be able to maintain growth in their core businesses.

This is important for any company who wishes to function as a learning company and change as the market conditions require it to change.

I got to thinking this same strategy could be applied to open source projects and I’m not sure it always is considered. It is very important for open source projects to realize the market they are currently operating in and modify their stance to account for those changes. Most people would say this is not important for an open source project since there is usually none or very little revenue associated with the project. I tend to disagree for an open source project to be successful it must gain a wide range of adopters who are constantly requesting new features. If the developers working on the open source project of not consider the environment in which they are completing then how can they hope to maintain a successful product and continue to attract new blood and resources to the project. Attracting new blood into an open source project is crucial for the project’s long term success.