Sunday, July 24, 2005


In my previous post about IBM, I used the words 'commodity' a number of times. What does that mean? Something is a commodity when it's transparent, i.e. you don't care where its from... all you care about is how much it cost and what you get for that cost. For example, electricity and petrol is a commodity. You get it at 5c per kwh or $2 per litre. You don't care whether its from Con Ed, Energex, Shell or BP.

In US, telecom is also a commmodity, which unfortunately isn't in Australia. But all that will soon change. It begins with privatization of Telstra. Australia missed out on the tech boom in the 90's because telecom wan't a commodity. Internet cost was and still is too high. US produced companies such as Amazon, eBay, Yahoo, Google and other deads during the tech boom. Australia produced nothing. Its because internet's so expensive that the little people in their garage couldn't afford to tinker with it.

And just like that, soon global technologies will also consolidate. It's already started. IBM shred the propriety PC/Laptop. Apple moved to Intel architecture. Sun making Solaris open source to fight Linux. Oracle buying up Peoplesoft and others to move into the ERP space. Microsoft developing CRM software (with rumors of trying to buy Siebel).

Microsoft is also adopting Sun's prophecy that the "Network is the Computer". By 2010, Microsoft Office will soon be hosted where you'll pay a subscription to use it instead of having it installed on your PC. Microsoft also bought Citrix. Already, SAP, Peoplesoft 8 and Seibel are internet based where users use the apps through web browser. Soon office workers will only need a terminal instead of a whole PC to get their work done. Its cheaper and easier to maintain from an IT point of view.

With network based operations, you need high performance servers, which is where grid technology comes in. Oracle and SUN already are releasing products with Grid enabled. Next version of windows slated to be released in mid 2006, named Windows Vista is also Grid enabled. With grid technology, you need non-properiety hardware where hardware can be added when needed. Dell and hp is doing that. IBM will die if it doesn't change its spots.

A last word for thought. Simplicity changes the world. Convenience is a force multiplier.

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