Some of you may know I’m a fan of the folk music of the ‘60s, and one of my favorites is “The Times They Are a’Changin” (Dylan and also Peter, Paul, and Mary). We’ve got some proof of that with news today.
Most people in tech today don’t remember a time when the personal computer wasn’t king of consumer technology, but it’s not that any longer and it won’t be that again. It’s not just a matter of having been slighted at CES; PC sales are consistently trending off (for everyone but Apple) and Windows 8 has done nothing to improve the situation. Now there’s a rumor that Dell may be looking to go private, meaning to buy back its shares. That’s not something a company who thinks their stock is appreciated by the masses is likely to be doing.
The core problem here isn’t that everyone is abandoning the PC for the tablet or smartphone but that many who are now looking at tablets and smartphones never needed PCs to begin with. The “personal computer” is a COMPUTER, meaning that it’s designed to support activities that need local processing. For the last decade, most of the usage of PCs hasn’t been computing at all, but web-related activity. Once we had appliances better-suited to that mission, people moved to them and that starved the growth engine for PCs.
That’s not the end of the problems, though. If you add always-on broadband (WiFi or cellular) to tablets, you have a framework to substitute the cloud for local processing and storage. This isn’t going to eliminate the PC completely (I know it won’t eliminate my own use because I have too much processing that I’m unwilling or unable to cede to the cloud) but it’s going to further reduce the drivers for PC growth. There was a time five years ago when everything you did in tech demanded a PC. Today, about a third of users don’t have to use a PC at all, and within three years that number will likely grow to half of all users. Even with the user base growing in developing countries, we’re not going to see a return to the glory days of PCs.
Microsoft may or may not know that. The story is that Windows RT is a bust in the pure tablet space. Windows 8 isn’t making anyone very happy (I use it on a laptop and it’s more trouble than it’s worth). Windows Phone isn’t setting records, though Lumia may be doing OK for Nokia. The thing that’s interesting to me is that none of this really matters because all of it would represent classic “shoot-behind-the-duck” behavior. Even if Microsoft “won” in tablets, the market would be so commoditized by the time it could claim victory that Microsoft’s win would be a loss.
We have a similar situation in networking. Later today, Juniper is going to be talking about its SDN strategy, something I’ll be blogging on when the event has finished. For now, it’s interesting that CRN has taken Juniper to task on a number of things, ranging from the rate of executive departures to issues with its data center and security strategies. The summation is a question: “Growing pains or something more?” So what is it?
“Shrinking pains” is what it is, and the problem isn’t unique to Juniper. I’ve said this before but it bears repeating. The network market is shrinking just like the PC market. There are no good spaces left in network equipment any more, and there never will be. There are some spaces better than others, some where vendors can continue to drive revenue and modest profits. None of them will restore companies to the glory days because those days are (get this, now!) G..O..N..E!
Cisco and Juniper are the archetypical rival vendors, and they both face the same elephant. I’d argue that both companies started off in the “denial” phase; they thought of things that would force operators and enterprises to spend more even though the ROI wasn’t there. For Cisco, it was the famous “traffic-is-growing-so-suck-it-up-and-buy-routers” approach. For Juniper it’s been their wearying TCO diatribe. But Cisco found its path to truth and says it’s going to be an IT company. What is Juniper going to be? When the pond is drying up, fish become amphibians. Or food.
That’s why the Juniper SDN talk today is so important. Juniper’s recent announcements have been failures in an objective sense; they didn’t increase the company’s influence and didn’t position them for future success. Juniper can’t be an IT company, so it has to be a cloud network company. That means it has to have the Mother of all SDN Positions, something that’s way ahead of the proverbial duck. That means no mindless defense of routers, no stultifying TCO discussions. It means true insightful SDN positioning, and Juniper has the collateral to make that happen, even to lead in the space. Whether Juniper has the will is something we’ll know by the afternoon, and I’ll do a rare second blog today to offer my view. This is important to the market and critical to Juniper. It may even be their last chance.