Check out this article from today’s International Herald Tribune: New minicomputers for $300
Most important part of the article:
Several makers are taking the low-powered PCs one step further. In the coming months, they are expected to introduce “net-tops,” low-cost versions of desktop computers intended for Internet access. A Silicon Valley start-up called CherryPal says it will challenge the idea that high-powered machines are required to allow basic computing functions in the Internet age. It is bringing out a $300 desktop PC that is the size of a paperback and uses 2 watts of power, compared with the 100 watts of some desktops. It wants to take advantage of “cloud computing,” in which data is managed and stored in distant servers, not on the actual machine.
Industry analysts say that the emergence of this new class of low-cost, cloud-centric machines could threaten titans like Microsoft, Intel, HP and Dell, because they have built their companies on the notion that consumers want more power and functions built into their next computer.
So everyone who’s been getting rich surfing the wave of Moore’s Law for the last 15 years is about to have their lunch eaten. Apple’s emphasis on phones is just in time. And the only people who will need powerful local (non “cloud-centric”) computers in 10 years will be creatives–and we’ll all have Apples.
But hardware makers: don’t plan on shifting business strategy to developing Software-as-a-Service. There’s not much money to be made there either, as per this Business Week article: On-Demand Computing: A Brutal Slog.
It’s all coming to pass, just as Nick Carr wrote in The Big Switch (p. 135 and p. 147):
[The predition] that many traditional businesses will find it impossible to compete against extraordinarily lean Web operations may be coming to pass. As a result, we could well see a hollowing-out of many sectors of the economy, as computers and software dispace workers on a large scale.
and
In the YouTube economy, everyone is free to play, but only a few reap the rewards.
Summary: good-bye to big margins and big ticket prices in both the hardware and software business (unless maybe you’re helping Google or Amazon build massive data centers). If you work in either industry you need to read The Big Switch. Then rethink your business strategy and/or career path.
And, as Dave Barry might have said, “Cloud-centric Machines” is a good name for a band…
