""Some of the biggest businesses we've built might not be as relevant going forward," admitted Microsoft CEO Satya Nadella during an employee-only town hall last week. Nadella was responding to a question about the perceived change in culture inside Microsoft, but his answer revealed a lot more about his own fears over Microsoft's future in this AI era. "Our industry is full of case studies of companies that were great once, that just disappeared. I'm haunted by one particular one called DEC," said Nadella."
"Digital Equipment Corporation once ruled the world of minicomputers with its PDP series in the early 1970s, but it quickly faced competition from IBM and others that made it irrelevant. It also made some strategic errors by betting on its own Virtual Address eXtension (VAX) architecture instead of the emerging Reduced Instruction Set Computing (RISC) architecture. Nadella's first computer was a VAX, and all he wanted to do when he was growing up was work at DEC."
Microsoft faces concern that artificial intelligence could render major existing businesses irrelevant, prompting anxiety among employees and cultural shifts inside the company. Leadership invoked Digital Equipment Corporation's 1970s dominance and subsequent decline—driven by competition and strategic bets on VAX instead of RISC—as a cautionary parallel. Personal ties to DEC appear part of the reflection, highlighting how past industry transitions can abruptly alter company fortunes. The perceived urgency around AI growth and market relevance contributes to internal fear about obsolescence and organizational change across product teams and legacy business units. Executives worry that missing the AI market could replicate historic failures.
Read at The Verge
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