Amy Wohl's Opinions

A Ride on the Hybrid Bus

Amy Wohl is currently guest blogging on IBM's Impact site.  We will be posting links to each of those blogs here. The new post is available here: A Ride on the Hybrid Bus

More Reliable and Secure Data Transfer with WebSphere MQ Messaging

Amy Wohl is currently guest blogging on IBM's Impact site.  We will be posting links to each of those blogs here. The new post is available here:  More Reliable and Secure Data Transfer with WebSphere MQ Messaging.

Accelerating Application and Service Delivery

Amy Wohl is currently guest blogging on IBM's Impact site.  We will be posting links to each of those blogs here. The new post is available here: Accelerating Application and Service Delivery.

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Is the PC Dead?

I just read a story under this provocative title, about one of the original creators of the IBM PC, now working for IBM Africa,  who uses a tablet himself and thinks the PC is obsolete.  If you want to know what the vox populi thinks, read the comments.  They're not ready to give up PC's.

I think I'd say that you need to have the right tools for the job.  If your job is sitting at a desk and creating content (text, spreadsheets, presentations, software, etc.), you're probably going to continue to be happiest with a desktop and a keyboard.

If you mainly spend time in meetings and on the road it will depend on whether you also create content.  Tablets for those who don't; laptops for those who do.

It is fair to assume that in the emerging markets, customers may make different choices.  It all depends on where you're coming from.  If you live and work in the North American business environment, you are accustomed to working with a generous screen and a keyboard regardless of whether that means a fixed desktop, a laptop, or a laptop extended by desktop facilities (a larger screen, a better keyboard, attachment to peripherals).  In countries which started adopting technology much later desktops are not so much of a phenomenon.  Users started with laptops, netbooks, or smartphones.  Tablets may represent much more power than what they are using now, not less as they do to current desktop users.

The PC is not dead, it is merely continuing to change.  Whether I use a desktop, a laptop, a netbook, a tablet or a smartphone -- or something new we haven't imagined yet -- I am still taking advantage of what we learned by designing and selling PC's.  In some cases, these are literally extensions of PC's -- in running the same operating systems or the same applications.  In other cases, we are moving to operating systems and applications that take better advantage of new technology -- and fully acknowledge that unlike the age of the PC where keeping as much as you could on its local drive was very important, in the age of the cloud, you may need to keep very little local at all.

It's also good to remember that for anything as ubiquitously installed as the PC, we could agree to stop manufacturing and selling them tomorrow and it would still take decades for all of them to disappear. 

The PC has made enormous changes in how we view data and computing; new devices and services will continue to do that.  As we move frward with device choices to take advantage of new technology we will be figuring out how to use them in a world in which PCs will continue to play an important role for many years.

The Emphasis for Growth is in the Growth Markets

IBM has been talking recently (in conjunction with a series of mainframe hardware and software announcements) about its investments in the growth markets.  (This can cover quite a lot of territory but generally means the BRIC countries (Brazil, Russia, India, and China).  We are also seeing Africa starting to feature in this arena, too.

IBM points to both the size of its investments – 166 new branch offices over the last ten years – and the opportunities it sees.   Of those 166 offices, 125 are in China, 14 in Brazil and 9 in India.  IBM also has a presence in more than 20 African countries.

IBM sees the growth markets as a more than $200 billion opportunity, so it’s no wonder that they’re making these investments.  In 2010 STG’s revenue was 27% in the growth markets and of that 53% in China.  The growth markets have grown from 16% of IBM’s revenue, by geography, in 2006 to 21% last year; it is expected to approach 30% in 2015.  Perhaps we’d better start brushing up our language skills in Chinese and Portuguese?

The real secret sauce here is how often it is IBM’s System z brand – the mainframes – figure in these sales.

For example, the Bank of Russia deployed IBM’s System z to consolidate from 200 distributed servers to 4 mainframes, allowing them to reduce technical staff workload by 85% and payment processing costs by 95%.  They are saving $400 million per year.

I sometimes think it is as if as the emerging geographies stretch and grow they feel they have to have “real computers” – mainframes – to become part of the developed world.  That’s just my fantasy.  What’s really happening is that they are discovering the economies of scale and centralization that have long been hallmarks of government and big business computing in developed countries.

Far from being a dying breed of dinosaurs, mainframes continue to evolve and improve and sales are blooming.  In the 2Q11 System z revenue grew 61% and MIPS grew 86% with a share gain of 7 points.  IBM gained 14 new customers, 68 since the z196 launch – so forget about that myth that all the mainframes go to existing customers to protect existing software investments.

Watch what happens as the BRIC continues to grow as a computing opportunity – and more emerging countries join the parade.

 

 

Microsoft in the Cloud

Recently, Information Week published a condensed transcript of a June 9 interview with Steve Ballmer, a follow-on to an interview the year before.  The interview is about Microsoft’s view of how it’s doing overall, but especially how its cloud strategies are coming along.

It’s clear that Microsoft has made a number of commitments to the cloud environment and executed on many of them.  What’s less clear is what Microsoft, e.g., Ballmer, is willing to say about just how well Microsoft is doing in the cloud and whether their cloud status in June 2011 is living up to their expectations.  Ballmer makes the expected swipes at private clouds (are they really clouds or just data center virtualization – a fair question) and notes that moving enterprise computing to the cloud, beyond moving some office and collaboration applications for information workers, may occur more slowly than anyone had expected.  (We’d note a fair number of exceptions, we think, to that statement, especially in large enterprises and governments.)

But the statement that got my attention – and set me to sitting down and writing this blog post – was Ballmer’s statement that “It's only a good day when a lot of Windows PCs sell.” 

I’m having some difficulty in integrating that statement with what I can observe going on in the cloud (and Microsoft’s cloud activities).

1. Cloud computing doesn’t require a PC (Windows or otherwise) at the other end.  While it is true that most of us are accessing the cloud today (especially when we’re at the office) from a desktop or laptop PC and most of those PC's run Windows, things are changing.  If I’m going to the cloud via a web browser (Microsoft’s or another), the operating system is largely irrelevant to what I can do in the cloud.  If I’m using a tablet or a SmartPhone (and increasingly that will be the devices of choice), a simple assessment of the operating systems those devices employ makes it clear that I am unlikely to be using Windows.
2. Steven J. Vaughan Nichols has recently said that unless Windows 8 establishes itself on the tablet and SmartPhone platforms we may be looking at the end of Windows’ dominance in the marketplace.  (He goes on to note that since Linux underlies a lot of what goes on in the Android, Chrome, and other non-Windows device platforms, Linux is the winner here but that is a matter of definitions.  Given that Android employs Java, perhaps this is not entirely a Linux environment?  And, in any event, the unseen Linux on these devices is barely known to most users.)

It seems to me this must mean that Microsoft is sticking by earlier statements that the right way to access and use the cloud is in combination with a PC running Windows.  Of course, that works just fine, but when you count the growth rates of tablets and SmartPhones versus the growth rates of any kind of PC (desktop, laptop, or netbook), especially from a global rather than a North American perspective, it seems likely that in a few years (absent a stunning Windows 8 success on the SmartPhone and tablet platforms) we will be using small, lightweight devices with powerful tools, but little need to store data locally. 

I’m hoping that at the office announcement of Office 365 later this month, Microsoft will make it clearer just how we should slice and dice its commitment to the cloud versus its ongoing commitment to the Windows operating system.  (Both continue on, of course; it’s a matter of resource allocation and company positioning.) 

Of course, being an analyst, I’d like some numbers.  As Ballmer stated in the Information Week interview (which is definitely worth reading) it’s hard for a large, public company like Microsoft to give out those kinds of numbers (because the Street takes careful notice and then punishes companies who are less than accurate predicting the future).  But just some indications of direction will be very useful in assessing Microsoft as an important cloud vendor in an increasingly crowded field.

In the last two years we’ve seen enterprise vendors like Oracle and HP join IBM in stating their strong cloud intentions and starting to provide substantial cloud offerings as well as dozens (probably hundreds) of carriers and smaller regional players in every part of the world.  It’s going to be a very competitive market.