IBM

IBM dominated the 20th century by making mainframe computers—those machines ran banks, airlines, government agencies. The business was extraordinarily profitable and seemingly permanent. Then the 21st century arrived. Personal computers, cloud computing, mobile devices, the mainframe market contracted. IBM faced extinction or transformation. They chose transformation. IBM divested hardware and acquired consulting and software companies. Red Hat, a major Linux provider, was acquired for $34 billion. The transformation was painful. The company laid off hundreds of thousands. But the purpose was clear. Become a services and cloud company instead of hardware. Hardware had commoditized.