On Thursday, September 15, 2005, Kim B. Clark, former Dean of the Harvard Business School and current President of Brigham Young University—Idaho, gave a forum titled "Design Rules: The Power of Modularity."
This forum discussed the power that the computer industry has seen by allowing all of the design of individual components to modularized. That is the broad scope. He took the audience on a tour of the history of computers, showing how IBM used to be the dominant player and that IBM controlled at least 50% of the market share. That was until they created the first PC. When they created that, they "outsourced" or modularized the design. They kept some of the components design to themselves and let other companies work on the other points. What resulted was a shift in the paradigm of how the company worked. They outsourced the processor to Intel, and the operating system to a little, tiny company called Microsoft. Both those companies took hold on those projects, and left IBM in the dust. They developed the way to operate without needing to be part of IBM. And, they found a way to make money without being dependant on IBM. IBM thought they had kept some of the most important aspects of the design, but in reality, they hadn't.
What this modularization allows for is the independent companies to create something better, cheaper, and faster than their counterparts. A good example of this is Apple. They have a good system going because they did not allow other companies to come in and create their parts for them. They are highly integrated and that allows them to produce a slower, more expensive product. By modularizing, the PC does have some compatibility problems, but it costs less, and allows for more unique customizations than does Apple.
The really interesting thing about the forum was that I learned a lot about how computer companies work. That is very beneficial for me because my brother and I are starting a computer business in January. We are already starting it right now, but we are not that far into it. We will start selling aggresively in January. That is the plan. The good thing from the forum 12/10/05ll sells their computers so fast that they get the money for their computers long before they have to send the money along to their suppliers. This is very effective, and it is something that we plan to do with our company, have negative capitol. That will be very beneficial because it will help us to be successful and stay ahead of our bills.
This was a good forum to help me understand some more things that I need to about my business.