A New Day Is Dawning for the Technology Market
Apr 30, 2012 5:00 AM PT
Last week, I was at the Dell annual Industry Analyst Conference, and it suddenly struck me that we are looking at a very different technology market this decade. Apple is expected to slide, largely due to the firm's inability to replace Steve Jobs; the dynamic that created Microsoft is changing, and analysts are questioning the firm's relevance as Dell and HP ramp up their own software efforts.
Dell, in particular, is doing some really interesting things -- both by concentrating on the midmarket and by creating the largest female-focused initiative in what has been a male-focused industry.
This is becoming a very different technology market -- in some ways reverting to the solutions-oriented industry that founded technology and in others recognizing the rise of women as a major industry force and significantly expanding the role of a technology vendor.
I'll close with my product of the week: an electric scooter that Dell helped create, which, not so coincidently, showcases some of what I'll be talking about.
The Post-Microsoft World
If we go back to the founding of Microsoft, the incident that allowed software specialization in the first place was the U.S. Department of Justice consent decree several decades ago that forced IBM to separate hardware and software.
No other industry has this level of separation. You don't buy the operating system for your car, appliance, or automated manufacturing machine separate from the machine itself. It may be created by another vendor, but as the buyer, you'll generally not know who that vendor is, nor will you deal with that vendor directly.
Because IBM was so dominant that software companies couldn't compete, it was forced to separate and competitively price its software offerings. This created the market for Microsoft, which then could sell its products both to OEMs and to users directly. That consent decree expired years ago, along with IBM's massive dominance, and it is clear the market is slowly reverting back to a time when vendors own the entire experience.
Apple, the most successful currently, is also the most vertically integrated, down to actually designing some of its own processors. Both Dell and HP have started to massively staff up their own software organizations, which already are crossing over into areas -- like systems management -- where Microsoft has offerings.
If you draw out a trend line 10 years or so, these vendors will likely need Microsoft far less. It should be noted that at every analyst event I've been to this year, the analysts are referring to Microsoft as a problem to be solved. What's more important is that these vendors used to showcase and compete for how tightly they partnered with Microsoft, but if they even mention the company now, it is along with other partners and not as a unique relationship. It is still important -- but now one of many.
Google and Apple Changing Places?
Microsoft is hardly alone. I'm increasingly getting reports of key people leaving Apple and going to Google to help with its new tablet effort. This is likely why Apple had its first big ad mistake in years.
Google continues to do some really interesting things, like asteroid mining -- at least the founders are anyway, though they also continue to behave as if evil were their middle name in their core markets.
There was an interesting post by George Colony, who argued that Apple would lose its way like Sony did. While I clearly agree Apple will eventually slide -- every company does after reaching this height eventually, and generally after the departure of the founder -- I tend to agree with Larry Dignan that this slide won't be that similar to Sony's, because the two firms are vastly different.
Still, just given history, it is unlikely we'll exit the decade with Apple at the top of the pile, and the company that will replace it has yet to be identified. I think Google wants this position more than most, but my expectation is it will eventually get nuked by some government it has pissed off. Granted, the current administration (which only fined it an insignificant $25K, bringing it to Jon Stewart's attention) still appears to be giving the firm a pass. I guess having Al Gore on your board does have its benefits.
By the way, this kind of showcases a new way to deal with a federal investigation: refuse to cooperate and pay a token fine. I'll bet Bernie Madoff is kicking himself in the butt right now...
My expectations are the Europeans will be less kind.
Dell and Women
As I mentioned above, Dell's analyst conference took place last week. What I found fascinating is that two (three if you add Safra Catz who appears to actually run Oracle now) of Dell's biggest competitors are run by women. Yet the company that is leading in its focus on women focus is Dell. The irony is that the one large company not run by a woman is the one leading in this focus.
One of Dell's most visible accomplishments is the creation of the Woman's Entrepreneur Network led by its Entrepreneur in Residence, which is also a unique position in a tech company.
Right now, given that the two major political parties in the U.S. appear to be arguing over which one is at war with women (apparently Jon Stewart's covering of this issue has religious leaders literally going nuts), this leadership position is very topical and timely.
HP leads in printing, but we've seen that industry decline recently. One area that it is expanding is wraps. HP has one of the top wrap solutions, yet it is once again Dell that is actually driving this technology mainstream with the first tech company-driven wrap solution for a vehicle manufacturer (my product of the week).
Granted this is small, but now think of this in context. Dell isn't led by a woman, yet it leads its female-led peers in focus on this demographic. Dell doesn't lead in printers, but it is stepping out ahead in the one big printer growth market -- wraps. That's kind of amazing.
The world at the end of this decade will be vastly changed. I have my doubts whether Google will survive the decade, given that it seems to be leading in pissing governments off. Microsoft will need to massively adjust, as the market that created it may no longer exist. Dell is doing some amazing things ahead of a number of companies that you'd think would be ahead of them.
I guess the one thing you can always be sure won't change in the technology market is that it is always changing. Apparently the change will be rather dramatic this decade.
Product of the Week: Current Motor (Dell) Super Scooter
I'm a big fan of electric bikes -- not so much electric cars, because right now the closer you get to something that is just for short-range travel, the better electrics work.
Electric vehicles shine in traffic and in cities where their torque, zero power use at idle, and efficiencies take hold -- but homes in cities don't have garages to put the chargers in, and running cords across sidewalks is frowned on. You can generally get scooters or bikes near a plug more easily, and they are a fraction of the cost of a car.
They are far easier to park, and you can lane split to move through traffic. Until the Qualcomm Electric Car solution gets rolled out (which will charge cars while driving or while parked at a meter), bikes and scooters just make more sense.
The Current Motor Super Scooter is a case in point, but what makes it unique is that Dell was asked to help create it. To my knowledge, it is the closest thing to a product from a technology company that you can drive that has ever existed.
It is tied to a Web service (first connected scooter) that helps folks find places to charge, manage their travel so they don't end up stranded with a dead battery, and remotely monitor and manage the scooter. In addition, this is the first vehicle designed to use vehicle wraps.
Vehicle wraps are a growing trend with many advantages, including unique finishes over paint, and they can be applied by dealers, allowing for vastly better customization. If you've never seen wraps, you can check out some cool ones here.
The scooter's core specs are a 40-to-50-mile range, top speed of 55 or 65, and a price of $10K to $12K, depending on power and battery.
It has a 3G-connected instrument panel that is fully configurable and contains Geo-Social apps. It costs under $50 a year to maintain and less than $.02 a mile for fuel. (Assuming 30 miles per gallon of gas, this would be like $.60 a gallon for gas.)
I've often wondered what would happen if a tech company helped create a vehicle -- a scooter like this is just the start -- and given the topic of change in this week's column, the Current Motor Super Scooter is my product of the week.