Wednesday, 14 September 2011

Rocky Road Ahead

I'm not talking about the end of the world but for us in the computer industry there are definite warning signs of rocky roads ahead.

I have talked at length about the dramatically changing client market with the growth in mobile devices in favour of traditional PCs. This has profound effects longer term on the traditional software market starting with the operating system upwards. There is going to be a rapid trend to the serving of applications and storing of data for every day applications over the Cloud, even if you are a Corporate user - that's the nature of mobile computing as we are seeing it develop.

This has a massive potential impact on both the revenues and margins that current volume software companies can make. The new devices have led the way in collapsing the cost of software and speeding up the way its delivered. There isn't any turning back even if many businesses set up their own 'Corporate App Stores'.

Now we see the rumbles in the infrastructure and server markets. The last Gartner quarterly figures showed servers slowing while overnight Cisco has again halved its growth expectations in the face of stiffer competition and a rapidly changing market.

'Plus ├ža change' some may say as the world of computing has definite waves of technology. But it is the pace of change which is catching out even the giants. In a few short months, HP issued a massive volte face having bought Palm and declared Web OS was their operating system du jour - they not only swiftly exited the tablet market in a frenzy of cash backs and give aways but they announced they were getting out of the PC business altogether.

Things haven't gone that well since for HP who perhaps should have hired Max Clifford to handle the PR debacle as shareholders have been very slow to give their backing to the proposed Holy Grail of acquiring Autonomy which is seen as putting their ship in order on the new course of software and services. The fact is they have just issued the death sentence to a cool $43bn of their revenue on which they still made some money - well until they refunded all that cash on failed tablets.

The next few months will be crucial. The tablet market is so dominated by Apple right now and they have swatted away one major player, you have to worry whether they have actually sewn up that area of the market. It would be shame if Apple were the only real player. Meanwhile, in the whole infrastructure and server market, the much hoped growth in Private and Hybrid Cloud solutions is seen as the ray of hope for the future.

Hold onto your seats, this may get to be a bumpy ride. Not for the faint hearted as even the big boys are mightily spooked about the future. And so they should be - it's arriving far faster than anyone thought.

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