Go back to 1993. This was the year when the Mosaic browser was launched. It was also a time when the data traffic was growing rapidly. Serving this nascent data communications market was a clutch of companies like 3Com, Cabletron, Newbridge, Ascend, Synoptics, Wellfleet and Cisco. Cisco wasn’t the largest at that time. But that was when it started its famous spate of acquisitions. By 1997 it had spent $5 billion in acquisitions and had emerged as the leader of the pack.

There is a similar story about Oracle and how it broke out of the pack in mid-90s and pulled ahead of Sybase, Informix and others to become the undisputed market leader. In fact you can go back to almost any category leader today and see that it had a “break-out of the pack” moment in its history.

Getting that break-out moment has become more pressing now. It’s largely because the IT industry is in a new difficult phase of its existence. It’s reaching maturity and the industry growth is slowing down. It’s only in single digits and is likely to stay that way. Moreover, consolidation is evident everywhere, particularly, in the profit pool. Take enterprise software as an example. While 85 percent of the revenue comes from the top 15 companies, almost 80 percent of profit comes from just three companies (Microsoft, Oracle and SAP). This means that the remaining 5000 or so companies, some public but mostly private, have only a small profit pool to play in.

This makes the pressure to break-out of the pack enormously intense. However breaking out has become harder than before. The industry structure has changed, the customer drivers are different and the IPO market has dried up for smaller companies. The old prescriptions don’t apply anymore.

While the formula has changed one thing remains the same. Break-outs are still about business transformation. In the past these transformations were about moving quickly to capture a larger share of market’s growth. Today they are more about creating customer intimacy and operational excellence.