The terminal did not keep the value
In 1981 IBM was computing. The company held the mainframe market the way a landlord holds a deed, and when it introduced the Personal Computer that August with a folksy advertising campaign, corporate America bought the machines in bulk. More than a million units sold within three years. The IBM name on the beige case told purchasing departments the machine was safe to buy.
But the PC broke IBM's own rules. To ship fast, the team used hardware and software from outside firms and published the design details. Clone makers copied the machine and often built it cheaper. And every clone ran the same operating system, MS-DOS, licensed from a small software company that IBM never thought to own outright. IBM had built a standard it did not control.
Nobody at IBM thought they were giving anything away. The operating system looked like plumbing. The applications looked like accessories. The money was in the iron and the service contracts, which IBM owned outright. Every one of those assumptions was reasonable, and every one concerned a layer that was about to stop mattering.
The bill arrived twelve years later. In July 1993 IBM reported an 8 billion dollar quarterly loss, then a record for American business. Fifty thousand employees took immediate early retirement. The workforce was falling from a 1985 peak of 406,000 toward a planned 225,000. The quarterly dividend was cut from 54 cents to 25. Revenue dropped 15 percent in a single year as mainframe demand collapsed underneath the company.
The value migrated. It left the hardware and settled in the layer where the actual work happened, the operating system and the applications that ran on it. The company that made the machine kept the least defensible part of its own creation. The terminal never keeps the value.