CES and the Death of the PC

Tuesday Jan 12th 2010 by Rob Enderle
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The recent Consumer Electronics Show heralded the end of an era, as a profusion of handhelds – Smartphones to Slates – pushed bulky PCs from dominance.

CES was back this year with a vengeance. Typically IT doesn’t care much about CES, but this year probably should be different: What CES launched will likely be coming in your front door in 12-18 months.

Much like it was in the ‘80s when, if you were watching, you could see the beginning of the end for the age of mainframes, CES this year represents the beginning of the end for most printers and PCs.

That earlier cycle took about a decade to really get going; I’m expecting this one to happen much more quickly – in something like 3 to 5 years this time. Google appears to be the lead platform beneficiary of this change. But they also appear to in the midst of a painful learning curve. So this outcome is far from certain.

The Beginning of the End of the PC Age

A lot of folks don’t remember when terminals effectively died. I can, as I was one of the folks trying to get rid of the damn things, both as a user and later inside of IBM.

The cause was that line and staff users (outside of IT) were sick of them. There were reliability issues, security issues (mostly having to do with remembering a massive number of passwords), user interface issues. The sense was that IT, called MIS (Management Information Systems) back then, was generally always late with solutions – and solutions generally didn’t work the way we wanted.

To give you an example, something we take for granted today, WYSIWYG editing wasn’t possible. You actually had to program, with a programming language called “Script,” your documents. And things like spell checkers didn’t really exist.

As a result the users effectively revolted and brought in PCs, word processors, spread sheet programs, and ran them initially without IT support. Eventually IT embraced the PC. It was IT that helped assure that Microsoft was initially successful but it was the users who drove the change – as they did with laptops, cell phones, pagers, and smartphones.

Buyers Are Ready for a Move

Perhaps “increasingly frustrated” would be a better term. And it isn’t just the Microsoft-based PC owners either.

Increasingly they – we – are using our other connected devices for communications. And it is these devices that are with us and that we are feeding with entertainment and applications – not PCs.

The Smartphones appear to be more reliable (at least for now) better-connected, and vastly easier to carry. But more important, because they increasingly rely on web services (including storage), we are less likely to be without our information when we need it.

IT-supplied PCs are now generally dropping into being over 4 years old. And personally purchased PCs are generally not supported by IT. Apple users are likely to be the most frustrated with this latter situation, and Microsoft PC users with the former.

But employees are also generally free to still buy the phone they want. Someone generally knows how to hook it into the business network even if IT won’t do it for you.

While users may express their frustration at the hardware or software (or companies that supply it), they appear to be frustrated with the model. They’re increasingly voting with their personal dollars for something different.

And based on what was showcased at CES, that new thing is a lot more like a Smartphone then it is a PC.

What’s Coming

Generally the new class of device is likely going to be a blend of the Slate, Smartbook, Smartphone, and eBook products products that were showcased at CES.

Better for reading, more power efficient, always connected, and typically sold like a Smartphone is today, their performance will likely be more gated by their network connection – this is the Cloud decade, after all – than any core technology.

Using the devices rather than paper for printing, rather than a laptop for remote access, and as an aggregation of navigation and entertainment devices, these handhelds are becoming the next Swiss Army knife product. Just as the PC once did.

The Risk for Status Quo and Emerging Vendors

When we moved from mainframe and mid-range computers to PCs, IBM dropped from the top spot, DEC failed, HP struggled and then eventually recovered to be better than it was. Software companies like Candle, which supported the old environment, ceased to exist.

This was the rise of Intel and Microsoft, firms who dominated the PC era. Now the PC era seems to be coming to an end and, like IBM, DEC, and HP did, Microsoft and Intel are now trying to adjust to the changing model. Yet it is likely that those on top at the end of the move will not be the same companies that were on top during the last two decades.

This is typically because they have to balance existing legacy lines against the new opportunity. And the folks in the firms supporting the status quo tend to be more powerful then the progressive managers driving change.

In companies like Google, Qualcomm, Marvell, and Freescale, there is no status quo to protect and these firms can run unfettered internally.

At the show each major PC vendor, including Dell, HP, Acer and Lenovo, showcased Android/ARM based products that could initially supplement and eventually replace a PC. But this isn’t certain, as the marketing funding that drives demand generally comes from Intel and Microsoft and (with the exception of Apple who won’t make this mistake) that lack of built-in demand generation could define how this market develops.

As a result Apple, rather than Google, could emerge as the new heir apparent. And Apple is rumored to be building its own ARM chip.

For Intel this means they can’t switch priorities over to Atom from Core because of a fear that this move would collapse margins. And for Microsoft switching to Windows Mobile and subscription or advertising pricing for a complete Office solution would be even scarier financially.

Yet CES showcased, much like the PC decade did, that the market is moving with or without these two major players.

What this Means for IT

The user, frustrated with the low progress toward an appliance model, has started to move. Users wanted something that was more like a phone. But the PC became more like a little mainframe. While the PC cycle took about 10 years it also started without an eco system in place (other than general retail) to support it.

The existing PC eco system appears more than adequate to support a less complex product than it currently it’s supporting. This suggests this move will likely take between 3 and 5 more years to become fully established.

This suggests you need to start thinking about whether you want to buy these things and fully support them, allow the employees buy them themselves and expense them, or use a carrier or other service to manage this for you. And these aren’t the only choices, as the economic ownership choice could be completely separate from the management choice.

You’ll also need to think about security, how you will set and enforce standards, and limit the coming complexity as you likely don’t want to support three or more devices for every employee. I suggest organizing managers who likely will be bringing these in on their own nickel into methodical trials so you can begin building a competence with them before the wave hits.

You likely weren’t able to stop the iPhone. And these coming devices, including the iSlate, are vastly more useful than it is.

Wrapping Up

We appear to be at the forefront of what appears to be a 3 to 5 year cycle to begin the process of moving away from the PC. The complete move may take an additional 3 to 5 years (the laptop move took 20). But much like it was with PCs and then laptops, the impact on your organizations should become pronounced early in the cycle. And it will be unavoidable by the end of the first phase for most of you.

In fact, with Smartphone use, you’ve already likely had to rethink how you manage and support portable “appliance-like” devices you don’t own.

For both Microsoft and Intel this move represents a lot of risk but also an opportunity to reinvent themselves. And it doesn’t come without risk for Google or the ARM vendors or any of the initial suppliers either. Remember that the PC market started with Commodore in the lead and they failed before the switch to laptop computers had really begun.

With the latest showcase product from Google, the Nexus One, there has been huge number of issues that suggest their free model (free like a puppy is free) may not survive this transition either. And another vendor as yet unidentified, or Apple or even Microsoft – both of whom have already functioning eco systems – could dominate instead.

Change is only a problem if you don’t anticipate it. The coming change is now clear, so make sure you aren’t blindsided, are prepared, and you’ll likely enjoy the ride.

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