Legacy Tech Companies and Why Startup Tech Companies Dominate

Gigantic legacy tech companies like Microsoft and IBM have seen a steady decline in the past few years, but what qualities are preventing them from matching the innovations of startups?

Startup tech companies are nimble and fresh, bringing new and innovative tech ideas to the market and selling them for a pretty penny. But once they become successful, it seems there is a certain threshold where innovation slows and companies eventually face a sluggish decline. Some legacy tech companies, such as Yahoo!, try to overcome this by acquiring as many new startups as possible. Other tech companies try to keep reinventing their old approaches to stay alive.

It’s important to understand why these legacy tech companies are failing for two reasons: first, as a startup tech entrepreneur, you’ll need to know what your key business advantages are so you can take advantage of them. Second, if you ever become successful and grow to an enormously influential size, you’ll need to know how you can stay afloat.

Business writer Matt Asay recently covered the long-term decline of legacy tech vendors, offering his own theories as to why the negative growth was occurring. His ultimate conclusion was that legacy tech companies fail to adapt to new insights in the tech world, and therefore cannot stay competitive. He illustrated this by noting Microsoft and IBM’s reluctance to capitalize on cloud computing.

However, I believe legacy tech companies’ issues are far deeper than that. While their failure can be ultimately traced back to an inability to adapt to new technologies and theories, it is not merely some stubbornness or adherence to the past that creates it. It is a culmination of several factors that prevent a legacy tech company from being able to move freely, including bureaucratic burdens, failure to incentivize innovation, and uncoordinated locations unable to move quickly on new ideas.

The bottom line here is that in order to become and stay successful as a tech company, you have to always stay up-to-date on the latest and greatest tech developments, and you have to always adapt to new circumstances. Failing to learn and grow is a death sentence for your business.

The original story can be found here

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About the Author

Jose Vasquez is a serial entrepreneur and tech specialist dedicated to helping startup tech companies grow and succeed. As the founder of Build. Brand. Blast., Jose has worked with dozens of enterprises to find direction, gain momentum, and achieve results.