Most of you probably aren’t old enough to remember the song “Three Little Words” and I won’t bore anyone who’s not interested enough in the source of my blog topic by recounting the lyrics. They don’t apply in any sense to my topic today, other than that I’m proposing three different three-word triads and weaving them into a tale on the future of computing.
My first triad is “IBM, HP, and Dell”. The real debate on the future of computing is whether it will be based on commodity x86 servers in some form, and IBM seems to be coming down on the “Yes” side of the question by selling off its COTS business to Lenovo. This puts IBM in the position of either being dependent on proprietary hardware architectures like its old mainframe line, or being committed to evolving to a software/service company. It also raises the question of what HP and Dell might have to do next, whether IBM is right or not.
Lenovo is likely to be more aggressive in pricing its servers, and thus will put price pressure on its competitors. While the fact that Lenovo is a Chinese company might also scare some buyers off, Lenovo is already a trusted source of PC products like the venerable ThinkPad brand that was launched and popularized by IBM. I don’t think that many will turn away from “IBM servers” in a Lenovo skin.
IBM’s challenge is clear, I think. Without x86 servers, IBM is an enterprise-only hardware company, period. There’s nothing it can really hope to sell to the smaller businesses, but in some ways that’s not going to create a new problem for IBM because the skid in IBM marketing practices has disconnected it from most buyers too small to have direct IBM sales representation anyway. So is IBM going to kiss off everyone else, or are they going to rely on “software” to address down-market opportunity? That’s where the real issues for its competitors will arise, and for that I want to augment my Three Little Words with the second triad: Linux, cloud, and mobility.
Thirty years ago, we saw the decimation of the minicomputer market because only the leading firm (IBM) was large enough to provide a software platform that had enough buyers to attract third-party developers. Today, in a world of Windows and Linux, it’s pretty obvious that IBM can’t hope to be that kind of player. But IBM can’t abandon x86 without competing with it.
One possible approach would be for IBM to endorse Linux, especially at the desktop. That would hurt rival Microsoft, it would let IBM leverage the Linux software universe, and it would open opportunities for other platform rivals (like ARM). To avoid becoming a new Red Hat, IBM could develop commercial for-pay software to run under Linux, making perhaps the first big player to develop a major commercial software portfolio for Linux.
If IBM is out of COTS then competitors like Dell and HP have a free shot at that space, though selling things off to Lenovo will put them under margin pressure. The problem might arise if IBM were to decide to push Linux. Dell seems to be cozying up more to Red Hat, so such a move by IBM would be a direct assault on Dell’s plans. HP’s cloud strategy is totally dependent on Linux too. At the least, a Linux strategy based on quality commercial software could give IBM an entrée into competitive Linux accounts. If IBM could make itself the Great Father of Linux (which is possible) they could even hope to force Dell and HP to depend more on Microsoft, which would set the future up as a Linux-versus-Microsoft war with IBM on the Linux (and for the data center at least, the winning) side. That could well get IBM its only good shot at a strategic rebirth at this point.
HP’s optimal, or even possible, responses to this situation are far from clear. HP can’t run to the Linux side too quickly because they need Microsoft for the desktop, period. That makes it hard for HP to jump too much into Linux to preempt an IBM strike. And HP is very vulnerable in the cloud area because it sees its cloud position (which it characterized as the leading private cloud platform on its recent earnings call) as a major differentiator. Yes, but HP’s cloud approach is really an OpenStack retread. Were IBM to focus its commercial-Linux software push not only on Linux but on cloud-specific application architectures then IBM could almost put HP away.
Dell would face the same problems as HP, but with Dell the question is whether its “private” status would help or hurt its response. Dell has the latitude to do something strategic now that it’s not facing quarterly scrutiny from the Street, but only if it doesn’t plan a quick re-IPO. If it does something that hurts profits in the long term (or if something is done to Dell that has that effect) then it could end up in a downward spiral with no easy exit.
For Dell, though, the last of my latest triad is the key point. Mobility is the only driver that can truly break the x86 market model. The more reliant consumers and workers are on mobile devices the more they shift away from Windows and the fixed “Wintel” architecture. Such a shift would be a strong benefit to IBM, which is why it would be logical for IBM to work hard to drive what I’ve been calling “point-of-activity empowerment” as a trend. Dell and HP would see their PC business revenues fall, but would also see a focus on highly systemic software systems built around cooperative components. This is a far cry from the simple cloud/OpenStack model that both HP and Dell want to embrace. The question is whether IBM could push this trend, and whether Dell and/or HP could push back. Which brings me to my last triad; song, services, and operationalization.
Singing, meaning marketing, is critical. IBM’s greatest barrier to advance (and thus Dell’s and HP’s strongest defense) is IBM’s lamentable lack of marketing insight over the last four or five years. By letting itself shift to a sales-driven mindset, IBM shed the COTS opportunity long before they left the business. You can’t be a player in x86 if you can’t sell to SMBs, and you can’t do that without a retail brand. IBM got quiet, and saw its brand become a kind of enterprise-elitist image.
Technically, the shift toward a mobility-driven future is a shift toward a new conception of “services” and “SOA”, not one based simply on SOAP and WS standards but one framed in the notion of agile, flexible, distributable, ad hoc, cooperative relationships among application elements. IBM is probably the best player in all of the industry in making something like this work, but will it?
The barrier will likely be operational effectiveness. The fact is that we have constrained our flexibility in networking and IT because the most flexible systems are too complex to manage at tolerable costs. For most of the time I’ve been in networking, network management has been an almost career-killing assignment (and in most companies it still is). It should be, must be, in the forefront of future service evolution simply because complexity rises too fast in agile systems—so fast it inevitably swamps results unless you completely rethink management.
Can IBM address these three points, or will Dell or HP do a better job? The answer to that one will likely determine which of my first three words are on the top of the tallest building in tech five years from now.