Jay, services are definitely back in vogue, but I don't think that's why Intel is down... it's possibly the fear the PC is near-TV (i.e. commodity) and a perceived lack of an Internet play, and the reality there are a lot of smaller deals with perceived high Internut growth potential (but with significantly more associated risk.)
Service is "in." It's even being discussed how "enterprise software" will be out... shrink-wrapped packages will be out... what will be "in" is software sold by the "need" or by the "experience." There's a belief, that some future software sales will happen by the "instantaneous need"... pay for only that moment in time you need the use of the software... PPU (pay-per-use)... But, possibly also priced for unlimited use through an ISP.
The software biz model then changes from a product model to a service model, where the service is the new wrapping around the package, and the consumer pays for the need/experience, rather than for the product. The idea being we will have hand-helds which will infra-red connect us to the Internet where large Intel-Inside PC farms exist to crunch content/calculations/data for all of these appliances which are performing minimal feature specific tasks per a service offered by a dot.com company which is fueled by the Intel-Inside PC farms.
AOL could be a portal for providing access to this type of a service sale, and maybe AOL will even give these hand-helds away for free. Intel, could help create the new PC-farm mainframe, where the appliances are the new terminals.
[I know one example where it costs a dot.com company about $2.5M in PC capital expenditure to connect 1.5M people at the same time. So, renting PC-farms to "dot.coms" could be an interesting way to reduce their capital overhead during their early, critical cash-short stage, thus enabling more dot.coms to launch, but it makes the dot.com's core service dependent upon another company which isn't a good thing to do in many cases.]
Amy J |
