Large-Firms' Demand for Computer Products and Services: Competing Market Models, Inertia, and Enabling Strategic Change

The organization of the value chain in the computer industry is undergoing profound change. The nature of this change is caricatured in two contrasting market models. In the “vertical” market model, large vertically integrated vendors of propriety systems, working hand-in-glove with selected partners, provide most of the functions in the value chain. In the “horizontal” market model there are distinct suppliers at each stage of the value chain. They provide components conforming to standardized interfaces that users then combine into systems.