See the full article for context-setting; the reporter suggests Palmisano was subtly replying to questions from Steve Ballmer. I think the next logical question might be why IBM was unable to make a profitable product in a market segment it created -- “commodity” does not mean devoid of value. E.g., was the desktop operating system market unattractive because it too became a commodity market, or was OS/2 simply unsuccessful? Enterprise e-mail is arguably a commodity market; will IBM dump Notes and LotusLive next?
The main obstacle to progress, Mr. Palmisano said, was institutional inertia and an inability to face up to reality.
Then, in a comment that meant the most to the few in the audience aware of Mr. Ballmer’s criticism of I.B.M.’s pullback from some businesses over the years, he observed: “People say I.B.M. invented the PC, I.B.M. invented the disk drive. Why sell it?”
Answering his rhetorical question, Mr. Palmisano said, “A $300 netbook is a commodity” — and, the inevitable implication, not a business for I.B.M.
Institutions get trapped in the past, he added, because of their “cultural resistance to change.”