The down side of tech's vision: Simplicity could shrink sales

[Dave Farber <dave () farber net>]

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The down side of tech's vision: Simplicity could shrink sales
By Dean Takahashi
Mercury News

LAS VEGAS - Even though Silicon Valley leaders aren't sure when technology
will bounce back, they remain uncharacteristically aligned in their vision
of how to fix the stubborn problems of computing and make recovery possible.

Sure, Hewlett-Packard Chief Executive Carly Fiorina took some jabs during
her keynote speech Monday at the Comdex trade show at what she said was IBM
hype.

Earlier, an IBM executive noted how far ahead his company was.

And Sun Microsystems CEO Scott McNealy couldn't resist ridiculing HP in his
keynote speech, saying, ``I don't think printing is at the core of your
problem.''

But the executives' pitches sounded remarkably similar as they addressed a
much-diminished trade show, expected to draw 125,000 attendees compared with
211,000 in 2000. Each party foresees that the corporate data center has to
be simplified and automated to ease the burden on overtaxed systems
administrators. IBM, HP and Sun are all trying to create software and
hardware that ties disparate computing resources together so they can be
automatically assigned to perform tasks based on the fluctuations of demand,
and be charged service fees based on how much computing they use.

``Complexity is driving people crazy,'' McNealy said, speaking in a
walled-off part of the Las Vegas convention center that once was used for
exhibits. ``That's what we want to attack.''

But even if this pitch works, it won't be a gravy train for big computer
makers. Computer utilization in data centers could move from 20 percent to
80 percent and administrators won't have to purchase as much new hardware,
potentially stalling computer sales even longer. Moreover, since most of the
rivals are emphasizing open systems and standardized computers, they won't
necessarily be able to get a lock on customers, who will be free to mix and
match equipment from a variety of vendors. The bright spot, at least, is a
common direction.

``It's much better that the major companies have the same visions,'' said
Irving Wladawsky-Berger, who is leading IBM's recently announced e-business
on demand initiative. ``We want the others to say the same thing and the
real competition will be in the execution. Just compare this time to the
Internet in 1995, when IBM, Microsoft and all the other companies rallied to
the Internet vision.''

Fiorina noted how HP's vision for what she called ``adaptive
infrastructure,'' or computers that adjust to computing demands as needed,
is ahead of rivals like IBM. Fiorina criticized IBM's recent announcement
that it would spend $10 billion on its own version of adaptive
infrastructure, which IBM CEO Sam Palmisano called ``e-business on demand,''
as little more than hype.

Tying her speech to a new HP ad campaign, dubbed ``everything is possible,''
Fiorina made the point that HP has the breadth and scale to match IBM's
efforts, even if she wouldn't say how much HP would be spending on the
effort. HP is spending hundreds of millions of dollars on the ad campaign in
the next six months.

McNealy said Sun would spend billions of dollars as well on R&D related to
its vision. He noted that Sun would mix and match technology, developing it
on its own or acquiring new companies.

It remains to be seen how corporate IT buyers will respond to the new
visions, which will become products in the coming months and years. Key
missing pieces of technology, such as proper monitoring and billing methods
that would enable IT managers to easily manage a data center with far-flung
computing resources, have yet to appear.

``Everybody is sharing the same vision, but with different approaches,''
said Jean Bozman, vice president of research at International Data Corp.
``Will this bring back technology? The bottom line is that the economy has
to turn around.''

After saying that they wanted to help corporate IT officers make more use of
the computing resources they already have, Monday's speech makers launched
into new pitches for products anyway. Fiorina said a new $299 iPaq handheld
-- which will battle new entrant Dell Computer -- would make the ``ideal
stocking stuffer.''

McNealy, meanwhile, said, ``It's a great time to buy computers from Sun. Our
salespeople will beg and do just about anything.''


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