I worked at a company that was a Smalltalk shop right through the middle of the 0's. I personally loved Smalltalk for it's simplicity and productivity and miss it to this day.
Our company finally let go of it because:
1) We needed to develop web applications and at the time there was no credible web app framework.
2) Licensing was expensive and complicated. We were using Parcplace/ObjectShare and had to deploy on Mac, Windows and different flavors of Unix. Most of our work was for internal consumption but we would also license our work to other companies and they had to call the ParcPlace sales people to negotiate licenses on the runtimes. Everyone hated the hassle and the expense.
3) While developing in Smalltalk was a dream, building and deploying was always a big pain.
4) Java showed up. Sun pushed it hard and aligned it with the development of the web. It was multiplatform, you could do servlets and (cr)applets with it. And it was free!In my personal opinion, the Java language, base libraries, and development experience were inferior to Smalltalk in just about every way in the 0's (ok, I welcomed static typing, but why did it take more than a decade to get lambdas?). Even Java performance was worse than Smalltalk for a while (the first Java releases were interpreted).
But Smalltalk was a fragmented ecosystem that did not adapt to the web and to a well-funded, well-marketed, free competitor (Java) that offered some of the same benefits.
Smalltalk was always a niche technology. It is still alive, but the niches are smaller.
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