Theres some interesting activity afoot in the world of technology. Even as the industry reels from one of its worst slumps in recent times, some very interesting shifts in strategies can be seen.
Business Week has a story on IBM’s decision to put $1 billion into services R&D and asking if it marks the end of the hardware era and the emergence of software services as the primary technology drivers.
Simply put, the age of hardware supremacy is on the wane. Chips — and the computers and gadgets they power — will continue to get faster. But speed itself will matter less and less, thanks to a host of confluent trends.
On the other hand, services will increasingly be where both the value and the interesting activity are. “The whole [info-tech] industry is becoming more services-based. The growth of services is outstripping the growth of hardware and software,” says Paul Horn, an IBM vice-president who heads its R&D operations.
The handwriting for hardware is on the wall. For starters, the network truly is becoming the computer, as Sun CEO Scott McNealy has long proclaimed. The Internet now reaches over 150 million Americans. Their connections are increasingly fast, with close to 20 million users surfing the Net on broadband connections and dial-up users now achieving regular download speeds approaching 56 kilobytes per second. As a result, more and more computing is being offloaded to central servers.
Those servers, however, are more likely to be cheap boxes that can be easily stacked and configured in ways to handle the majority of computing tasks. So, faster and faster chips and computers have a marginally smaller return when IT managers can simply throw another box in the rack and add 10% more power and processing speed, as needed.
Another key factor in ending the hardware era is simple satiation. Hardly anybody outside a corporate IT shop fills a 100-gigabyte hard drive. And for the average consumer, the marginal difference between a 2-gigahertz Pentium and 2.4-gHz processor is virtually zero. That might change somewhat as video and other more processor-intensive applications take off. But even those new uses for computers seem unlikely to push hardware capabilities to now-undreamed-of levels.
The reasons why Big Blue is putting more emphasis on software and services research will only accelerate as computing becomes increasingly commoditized.
Whats Microsoft thinking about this?
Tomorrow: The Coming Computing Shift (continued)