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This agreement created a market opportunity that was filled by the various service bureaus such as EDS and CSC. Throughout the 1970s, the Justice Department continued to pursue antitrust action against IBM.
The mainframe industry remained vertically integrated for the most part, with IBM and a few other large companies controlling a large share of the total market. But the development of a modular, standardized dominant platform along with the growth of plug-compatible systems and peripherals man ufacturers and independent software developers foreshadowed the ultimate restructuring of [...]
The advent of the IBM System/360, with its modularity and standardized interface features, enabled original equipment manufacturers (OEMs) to begin manufacturing peripherals that were plug-compatible with the System/ 360.
It also allowed IBM to avoid competing directly on the basis of price for each item on its menu of hardware, software, and services. While IBM’s effective implementation of these business practices helped it establish an early lead in the industry, there was also a bold technology gambit that propelled the company far ahead of [...]
IBM was the most successful company by far in implementing the proprietary strategy, using three key business practices to establish and maintain its market position. The first was to rent rather than sell its equipment.