computers | Paul Wallbank - Communications Professional

Three screens, four screens, infinite screens

The three screens idea of media consumption that was cutting edge five years ago now seems rather quaint.

This morning I had the opportunity to interview designer of the Fitbit, Gadi Amit, ahead of his visit to Sydney next month.

I’ll have the full interview written up in the next couple of days, but Gadi made an interesting point about not being in a ‘four screen world’ anymore, but in one where there’s infinite screens ranging from wearable glasses and watches through to smartphones and intelligent signage.

A few years ago the concept of the ‘third screen’ came into use when we started talking about the smartphone supplementing the PC and the TV, it quickly morphed into four screens as the tablet computer appeared.

Now the five year old idea of limiting ourselves to three screens seems quaint when there doesn’t seem to be any limits in the way we can view information.

The end of the three screen theory is an interesting illustration on how quickly technology is moving, it also shows how rapidly business is changing.

Trapped in orbit – the founder’s dilemma

Walking away from a business is not always a simple task as Bill Gates is finding

Earlier this week Microsoft co-founder Paul Allen celebrated his Seattle Hawks winning the Super Bowl while his former business partner, Bill Gates, still struggles to escape the clutches of the software giant they founded forty years ago.

After a long drawn out process, software giant Microsoft has finally chosen its replacement for CEO Steve Ballmer however founder Bill Gates finds himself firmly trapped in the company’s orbit.

Hoodie wearing Satya Nadella‘s ascension to Microsoft CEO was probably the poorest held secret in the tech industry having been openly reported for several weeks.

Nadella has a massive task ahead of him as the industry that’s been so lucrative for Microsoft over the past thirty years evolves to deal with the post-PC era.

How Nadella manages Microsoft’s transition will define his business career and tenure at the top job, it will also determine the company’s position in a marketplace where PCs running Windows are no longer relevant.

The biggest news from Microsoft’s announcement though was that Bill Gates will step down as Chairman of the Board and take a new position as ‘founder and technology advisor’.

Microsoft also announced that Bill Gates, previously Chairman of the Board of Directors, will assume a new role on the Board as Founder and Technology Advisor, and will devote more time to the company, supporting Nadella in shaping technology and product direction. John Thompson, lead independent director for the Board of Directors, will assume the role of Chairman of the Board of Directors and remain an independent director on the Board.

Despite leaving the CEO role over a decade ago, Gates finds himself back in a hands on role at the company.

The value of Bill Gates

It’s questionable what value Gates is going to add in the role of ‘Technology Advisor’ as Microsoft’s markets are very different to those the company was founded in and came to dominate in the 1980s and 90s.

For Nadella, it’s not exactly a vote of confidence from the board in appointing the company’s founder to hover over his shoulder offering helpful advice.

On a personal level this must be disappointing for the founder and former CEO as well in that his mind is on far greater topics such as eliminating malaria through the Bill and Melinda Gates Foundation.

Trapped by Microsoft’s gravity

Gates’ situation though is a classic example of a business founder who’s never been able to get out of the orbit of their business. Despite their best efforts, they keep being dragged back to give a helping hand.

At least though Gates has at least been able to step away to some degree, many baby boomers with smaller businesses are going to be locked into their companies as GenX or Y entrepreneurs don’t have the funds to pay what the proprietors need to retire.

Those boomer entrepreneurs are going to work in their businesses until either they or their venture is put to rest.

Bill Gates’ dilemma though shows how tough it is for business founders to escape the gravitational pull of their creations, even when it’s as big a business as Microsoft.

Paul Allen showed how to step away from a business and is enjoying life, Bill Gates’ story though is much more typical for business founders trapped in the enterprises they built.

Milestones of the personal computer industry

Steve Jobs marked most of the milestones of the PC industry’s rise and fall

“There have only been two milestone products in our industry to date,” Steve Jobs told the Boston Computing Club in 1984. “The first was Apple II in 1977 and the second was the IBM PC in 1981.”

Jobs at the time was announcing the third breakthrough – the Apple Mac – which turned 30 last week.

Looking back over the four decades of the PC industry, Jobs’ claim that the Apple Mac was the sector’s third milestone stands up to scrutiny, however the greatest milestone of all for the PC was the launch of Window 3.0 in 1990.

The rise of Windows

Windows 3.0 changed the business model of the industry, it established software vendors – particularly Microsoft – as being dominant over hardware manufacturers, that shift nearly killed Apple and eventually sent most PC builders to the wall.

Microsoft’s advantage over Apple, IBM, Atari and dozens of other systems, was that users weren’t locked into one vendor’s products. It was possible

The Windows 3.0 milestone was even more important in that it forced a shakeout in the software industry as well, many of the incumbent vendors – most notably WordPerfect – though the Windows Graphic User Interface (GUI) was a flash in the pan and that most office workers would prefer to use keyboard instructions rather than mouse clicks.

WordPerfect was horribly, horribly wrong in judging the market and by the time they released the Windows versions of their product Microsoft had captured key market share for Word and the bundled Office suite that dominates the business world today.

Going mobile

So things were good for Microsoft until the next milestone, which again was marked by Steve Jobs, the launch of the iPhone genuinely did change the smartphone industry and was the first inkling of mobile would eventually destabilise the PC sector.

It’s interesting comparing Jobs’ iconic 2007 iPhone which sets the standard for product launches with the somewhat rough at the edges 1984 Boston presentation although both show how Steve Jobs was a master salesperson and a passionate believer in his products.

The PC’s final milestone

Three years later Steve Jobs delivered the milestone product that marked the beginning of the end for the PC industry, the iPad finally delivered a mobile computing device that businesses and consumers wanted.

Apple’s iPad also marked a fundamental shift in the computer industry – no longer did the software companies control the market, power had shifted back to the manufacturers.

From that moment on the PC, and Microsoft’s Windows business, started a terminal decline.

The rise and fall of the personal computer is a great illustration of a transition technology. That Steve Jobs bookmarked the beginning and the end of the PC industry is an interesting note about a technology that changed the home and workplace.

Microsoft edges towards the post PC era and the end of Windows

Life was good for Microsoft Windows until the iPad arrived, now it’s becoming irrelevant to the business.

Microsoft’s evolution to the post PC era has been a fascination of this blog for several years now as the company’s once flagship Windows becomes irrelevant in a world dominated by smartphones and tablet computers.

The launch of Windows 8 and the Surface tablet were the great hope for the company, but it appears the business model that built Microsoft into one of the world’s biggest companies is doomed. Microsoft is shifting to the post-PC era where Windows has little role.

Yesterday’s financial results emphasised the shift as the consumer licensing business fell 6% year against last years revenues while the company’s overall revenues rose 14% – the old consumer Windows business is dying.

This is illustrated in the company’s quarterly report, where the business units that delivered the growth were all in non-Windows areas.

SQL Server continued to gain market share with revenue growing double-digits
System Center showed continued strength with double-digit revenue growth
Commercial cloud services revenue more than doubled
Office 365 commercial seats and Azure customers both grew triple-digits.

Drilling down into the numbers the trend against Windows is even more stark, here’s a chart of the performance of the division over the last ten years.

Microsoft Windows division financial performance

As we see, life was good for Microsoft Windows until the iPad arrived.

Following Apple’s proof that tablet computers could deliver what business and home customers wanted from a portable device, Windows’ revenue stagnated and now income and margins are falling.

The devices and services strategy of outgoing CEO Steve Ballmer recognises is a reflection of how Windows is becoming irrelevant to the business.

It’s hard to see where Microsoft now goes with Windows, the product still remains a key part of the business with 22% of revenues – although that’s down from 27% last year – and its hard to see a buyer parting with the hundreds of billions the division would be worth as a stand alone business.

For Steve Ballmer’s successor as Microsoft CEO dealing with the Windows problem will be one of many big issues they’ll have to deal with, the future of the once iconic product though won’t define the future of the business.

IT becomes the plumbing

As the internet of everything and cloud computing takes over, IT is becoming just like the plumbing. This is a good thing.

One of the things that jumped out of last week’s smart city tour in Barcelona is that Nicholas Carr’s IT Doesn’t Matter is coming true — IT is now the plumbing.

That’s not to depreciate IT, it means the technology is now becoming so embedded in society and business that people no longer notice.

Like roads, electricity and water people assume it will be available but don’t notice the massive effort or investment required to make sure these services work.

With cloud computing, pervasive internet and connected devices, most business never need to see an IT worker.

For telco executives, IT managers and tech support people this is a blow to their egos as they always wanted their industries to be more than utilities.

In one way being a utility legitimises IT as it makes the industry more important than just a bunch of geeks playing with computers.

That also means that things have to work, ‘best effort’ services no longer cut it when you’re a utility and things have to work 99.99% of the time. Just like in plumbing.

Becoming the plumbing could be the best thing that happened to the IT industry.

Intel’s challenge to find a new message and market

Can Intel adapt to the post PC marketplace where the old Wintel dominance no longer matters

Twenty years ago people cared about the specifications of their computers and chip maker Intel led the industry with its marketing of 486, Pentiums, Pentium Duos and Pentium IIs.

As we come to the end of the PC era, the consumerisation of technology and the rise of cloud computing mean customers no longer care about what’s inside their systems and Intel is struggling to find a new message.

Over the last few months Intel have been showing off their latest range of Central Processing Units (CPUs) to enterprise and small to medium business (SMB) groups. Last week the company hosted an SMB event in Sydney that illustrated how Intel is struggling to cut through the market.

Speaking at the event was Steph Hinds – an evangelist for cloud computing – who told the story of how her Growthwise accounting practice was flooding out during storms.

Because her systems were on the cloud Steph and her staff were able to work from home and local cafes while the landlord fixed her offices. Had Growthwise been using a server based system the business would have been crippled while her IT people implemented a disaster recovery plan.

Steph’s story in itself illustrated the Clean, Well Lighted Place argument for cloud computing and also showed how Intel is struggling to sell its PC and server upgrade cycle message in an era where that business model is dead.

This didn’t stop some of the other speakers at the small business event trying to sell the idea that upgrading computer systems and retaining an IT support company were essential to small business success but it’s a message that was valid a decade ago.

For Intel the challenge is to find a new message – it may well be that the company’s future lies in supplying the powerful CPUs that run data centres, or maybe the low energy and maintenance chips required to control the billions of intelligent devices that will run the internet of everything.

The company’s launch of their Galileo board – a tiny computer designed to compete in the intelligent devices market with the likes of the Raspberry Pi – is a step in the latter direction and shows Intel is exploring the possibilities.

Wherever Intel’s future lies, it doesn’t lie in trying to sell a business model that is quickly going the way of the Brontosaurus.

During most of the PC era, it was the Wintel partnership that dominated the computer industry, now Microsoft have realised this fundamental market change and started their journey to become a devices and services company.

The challenge now lies with Intel to decide where their journey will take them in a post PC world.

Steve Jobs’ golden path

Every tech product demonstration is theatre and Steve Jobs showed how it was done with the iPhone launch

“Today Apple reinvents the smartphone.” Steve Jobs announced at the 2007 Macworld Conference when he showed off the new Apple iPhone.

As with most of Jobs’ speeches, the iPhone launch was an impressive display combining the man’s talents, vision and technology to rally Apple’s adoring masses.

Last week the New York Times magazine had an excellent feature on the story behind the landmark launch of the iPhone. It’s worthwhile reading to understand the theatre that goes behind a major tech company’s launch event.

In the case of the iPhone, a myriad of tricks had to be performed to make sure the still being developed device didn’t fail in Steve Jobs’ hands during the launch – one can be sure the Apple founder wouldn’t have been as relaxed as Bill Gates when a Windows 98 system crashed onstage a decade earlier.

A key part of Jobs’ presentation was the ‘Golden Path’, a script that would showcase the iPhone’s features while avoiding known problems.

Hours of trial and error had helped the iPhone team develop what engineers called “the golden path,” a specific set of tasks, performed in a specific way and order, that made the phone look as if it worked.

Much to the relief of Jobs’ staff, the demonstration worked flawlessly and Jobs’ polished presentation showed why he was one of the most admired, if flawed, business leaders of his generation.

While most tech CEOs could never dream of emulating Steve Jobs, almost every one has a ‘golden path’ to show off their product in a new light.

Something we should remember when watching these demonstrations and the press coverage that follows is that most of them are carefully staged theatre and we should hang onto our wallets until well after these devices are on the shop shelves.

As it turned out, the iPhone was a spectacular success and did re-invent the smartphone industry. Along with being able to deliver a killer presentation, Steve Jobs was also good at driving teams to deliver his vision.

Steve Jobs image courtesy of Wikimedia.

Does Bill Gates leaving Microsoft mark the end of the PC era?

Bill Gates is the last of the PC industry pioneers, does his retirement from Microsoft mark the end of the desktop era?

After Steve Ballmer’s announced retirement from Microsoft it was clear that the changing of guard was going to happen at Microsoft as Bill Gate’s last trusted lieutenant left a management position.

Now Reuters reports that some of Microsoft’s shareholders are lobbying for Gates himself to leave the board.

If that happens it would probably be the formal end of the PC era as Gates is the last of the pioneers of the desktop computer industry to still have a major role following Ballmer’s retirement and Steve Jobs’ passing.

Who will win the race for wearable computers?

The race for computers that work in glasses is hotting up and there’s no guarantee Google will be the winner.

The news that wearable technology company Recon has secured funding from Intel and shipped fifty thousand devices reminds us that it’s not just Google who are in the market developing glasses that work as computers.

Other companies competing with Google include Glass Up, an Italian startup that’s teamed with Australian company Nubis to provide a wearable device that’s controlled by a smart phone app.

It’s tempting to think that the battle for wearable technology will be won by Google as they are biggest and best funded company, but history shows us size and incumbency don’t always guarantee success.

Google themselves have failed many times when they’ve tried to enter new markets, regardless of the money and resources they’ve thrown at the market.

The best recent example of this is Microsoft’s forays into smartphones and tablet computers during the Windows XP period – A decade ago it was obvious to everyone that Windows based phones and tablets would dominate those markets.

As it turned out the clunky and awkward to use devices scared customers away and it was Apple and Steve Jobs who ended up being the dominant players.

So it may well be that a company we’ve written off – maybe Microsoft – who might end up being the leader in wearable computers, although it’s more likely an upstart like Recon or Glass Up will eventually be the leader.

It may even be that glasses don’t work out as wearable computers at all.

Microsoft’s continued evolution

Microsoft are evolving to a changed market, but can they evolve quickly enough to beat their competitors?

Today’s investor briefing by software giant Microsoft shows the company’s evolution as their markets shift.

Microsoft Chief Operating Officer Kevin Turner broke out the key numbers for the company’s revenues which illustrate just how the company’s business model is changing.

Over half of Microsoft’s revenues are coming from enterprise customers and of the product lines, Office unit makes up just under a third, Server and Tools slightly more than a quarter while Windows has fallen to 25 percent.

Despite the decline in Widows’ revenues, there’s no doubt about Microsoft’s determination to drive the PC upgrade cycle through the retirement of Windows XP as Turner explained.

We have a giant XP install base. But guess what? We’ve made so much progress on that XP install base. It’s down to 21 percent worldwide, and we have plans to get that number to 13 percent by April when the end-of-life of XP happens.

A big part of the change is the shift to the cloud with Turner claiming two hundred percent growth in Microsoft’s Azure services.

Despite the change in Microsoft’s focus, the threats remain with Apple releasing both iOS7 and their new range of iPhones along with Google making their QuickOffice mobile app free to iOS and Android users.

While Microsoft are steering their ship around, the incumbents in other sectors are protecting their positions. In an evolving world, survival is not guaranteed.

Intel and the upgrade cycle

Can the upgrade cycle save Microsoft and Intel as the computer market moves against the once dominant duo?

Once dominant PC industry duo Microsoft and Intel have had their positions shaken with the rise of cloud computing and smartphones. Can the PC upgrade cycle help them reclaim their fortunes?

In the early days of the PC industry, chips mattered. Twenty years ago the release of the Intel 486 CPU was big news and careers rose or fell depending on whether an IT manager chose DX-33 or SX-66 chips for the company’s fleet of desktops.

Today few people care enough to get passionate about what’s driving their smartphone or tablet computer.

Intel, who are currently promoting their new range of Central Processing Units, and Microsoft are in an interesting position as their traditional dominance in server, desktop and laptop computers is being challenged by the rise of smartphones and tablet devices.

For most of the 1990s and 2000s the two companies dominated the PC market so completely that the generic term for the sector was ‘Wintel’ – the combination of Windows and Intel.

A core part of the old Wintel business model was the four year upgrade cycle, that most computers would be replaced every three to five years giving Microsoft, Intel and the rest of the IT industry a ready made market for new equipment.

That business model was broken by Microsoft’s disastrous Vista operating system and never recovered as non Wintel portable devices and cloud computing services took away the need to upgrade a server, desktop or laptop computer every four years.

For Intel, matters weren’t helped by their powerful but energy hungry chips not being suitable for tablet computers and smartphones which further eroded their sales as the market moved to portable devices.

Despite those changes to the marketplace, Intel continue to focus on that four year cycle, at their media lunch in Sydney yesterday they emphasised the costs of running older technology.

They do have a point with their claims that servers older than four years deliver four percent of the computing power but consume 65% of the energy, making those antiquated systems far less efficient than newer equipment.

Unfortunately for Intel many businesses will be looking at outsourcing their servers to the cloud when the next technology refresh comes along, so the energy and efficiency arguments are a different matter.

On the desktop, things are somewhat different as most workers still prefer to work at a PC and Intel do have a case for upgrading both business and home systems.

Probably the biggest opportunity will be Microsoft’s pending retirement of Windows XP which will see a wave of business and home users who’ve been content with decade old computers looking at moving off systems that are no longer supported.

Another feature going for Intel and Microsoft are newer computer technologies such as touchscreens and Intel’s own wireless display technology, branded as Wi-Di, which older systems can’t support.

Whether this is enough to entice technology addled consumers and businesses across to new systems remains to be seen, but it’s a challenge for both Microsoft and Intel to reclaim their once dominant market positions.