The Microsoft-IBM comparison is a phenomenal one. Two companies, both seeing that their core businesses were slowly dying as the markets changed, embarked on a transformation. Microsoft has wildly succeeded in that transformation, IBM has utterly failed. Microsoft went from $70B in revenue in 2011 to $110B in 2018; IBM did the opposite, going from $107B in 2011 to $79B in 2018.
What was different? Microsoft focused on new product development and didn't care if it cannibalized legacy products, made massive capital investments, made strategic acquisitions, placed huge bets, not all of which paid off (e.g., Nokia), but the ones that did paid off enormously. IBM focused on quarterly EPS and tried to get there with share buybacks, headcount reductions, non-strategic acquisitions to essentially "buy revenue", and financial engineering. SAP and Oracle have been following the same playbook as IBM and it has yielded the same dismal results. The enterprise software companies (except Microsoft) are a shell of what they were 20 years ago, it's a sad story.
Originally posted by @YNInG5H-1iey.