Internet Fuels Revival of Centralized 'Big Iron' Computing
By STEVE LOHR with JOHN MARKOFF -- May 19, 1999
SCHAUMBURG, Ill. -- As Walt Grom tours his domain
-- row upon row of hulking black computers -- he
speaks of the importance of "fundamental engineering
disciplines" and "brute force experience." The vast
room is spotless, brightly lit and chilled by air
conditioning, an austere interior designed for the care
and feeding of big computers.
The huge datacenter, run by IBM, is one of the engine
rooms of the Internet, powering the World Wide Web
sites and electronic commerce operations of some 400
companies and organizations including BankAmerica,
Macy's, Goodyear and the National Hockey League.
Such computer centers,
known as server farms,
are the unglamorous
side of the Internet
revolution -- a world
apart from the young,
urban culture of Web
design artists with their
tattoos and earrings.
Here, a no-nonsense
style prevails, and the
hallways tend to be
populated by big, beefy
men with beepers.
"We're happy to do the
plumbing," said Grom,
who runs IBM's server
farm in Schaumburg.
Internet datacenters are sprouting up across the
country in a sure sign of the trend toward once again
housing information and computer power centrally -- a
seeming reversal of the last two decades of computing.
The personal computer has defined the industry's recent
history and how computers were used. As personal
computers spread rapidly in the early 1980s, they were
seen as engines of individual empowerment and
decentralization of information. Millions of islands of
information were suddenly stored on desktop machines --
knowledge residing in the spreadsheet, word processing
and database programs of individuals. It was a
technical and social repudiation of the previous three
decades, dominated by mainframes and minicomputers, a
computing formula based on "big iron" machines that
held all the information.
But in an odd alliance, the Internet -- hailed as the
technology behind a new economics, tearing down old
hierarchies and flattening corporate organizations --
is fueling a recentralization of information and a
revival of big iron computing.
The Internet holds the promise of anytime, anywhere
access to information and entertainment delivered over
powerful networks to an array of information appliances
like handheld devices, cell phones with screens and
television set-top boxes, not just personal computers.
That makes the present round of information
centralization very different from the old days. The
glass-house datacenters of the 1960s were controlling
gatekeepers, with information rationed from the center.
Today's modern server farms, by contrast, are powerful
nodes on the Internet, making information more readily
available to individuals.
There are, to be sure, privacy concerns raised by the
prospect of creating increasingly large digital
storehouses of personal information. Those concerns,
technology experts say, require clear-cut corporate and
public policies to protect privacy as collecting,
storing and distributing information becomes easier and
cheaper in a digital economy.
Still, even personal computer pioneers generally regard
the shift to Internet-based computing as an
irreversible step toward efficiency rather than a
retreat from the information democracy they sought to
foster.
"People want to own their own information but they
don't want to maintain it, and that is driving the
shift toward centralization," said Adele Goldberg, a
member of the team at Xerox Palo Alto Research Center
in the early 1970s that created the founding concepts
of personal computing.
Because of the Internet, companies are starting to
embrace centralized computing again for the first time
in decades. "A real mind shift is under way in
corporate America," Scott Winkler, an analyst at
Gartner Group, a research firm, said.
In some ways, corporate America is following the
Internet leaders. For behind an America Online or an
Amazon.com is a massive arsenal of computing power.
America Online Inc. supports its service to more than
16 million subscribers -- with a million people using
the system simultaneously on many evenings -- with two
vast server farms in Virginia and a third one planned,
a $520-million project announced in March. (Such
datacenters are known as server farms because they are
veritable crop-rows of big computers that send, or
serve, data out to users.)
"The good old economics of scale really do apply when
it comes to server farms," Marc Andreessen, the chief
technology officer of America Online, said.
The new model of computing -- a proliferation of
information appliances linked by the Internet to server
farms -- has been called the "post-PC era." For the
post-PC vision to be fully realized will take years,
and billions of dollars of investment to build
ultra-fast digital networks, wireless technology and
new kinds of handheld and other devices.
And to say that computing appears to be heading toward
a post-PC era is not to say the PC will become obsolete
anytime soon. Indeed, the PC industry has benefited
from the rise of the Internet so far because the PC
today is the principal access device to the Net.
Desktop alternatives to the PC like the "network
computer," or NC, running only a Web browser for
tapping into the Internet -- first proposed in 1996 by
Lawrence Ellison, chairman of Oracle Corp. -- have not
yet slowed PC sales.
But the evolution toward the Internet model, most
analysts agree, represents the most significant change
in the industry since the PC replaced the mainframe as
the center of gravity in computing two decades ago. The
shift represents a daunting challenge to the big
winners of the PC industry, Microsoft Corp. and Intel
Corp., whose software and microchips are the essential
technology in most PCs. Their high profit margins are
expected to erode as consumers increasingly use
simpler, lower-cost devices to tap into the Internet.
Both companies recognize the challenge and are
responding. As one step, Intel announced in April that
it was planning a big move into Internet services by
building and running server farms. The move seems a big
departure for Intel, whose microprocessors serve as the
electronic brains of most PCs. But Intel sees the
server farms as part of its future of moving beyond the
personal computer to become a "building-block supplier"
to the Internet economy.
"The PC industry is changing drastically," said Andrew
Grove, the chairman of Intel, "and when it's over it
probably won't even be called the PC industry. It will
become the Web infrastructure industry."
Microsoft is preparing for the day when people may keep
much of their personal and professional information on
large servers with an initiative called Megaserver. The
concept is that a person will be able tap into a large
central database via the Web to get e-mail, personal
schedules, news, weather updates and other information
anywhere, anytime.
Even Microsoft concedes the
access device will not
always be a PC. "While the
PC will stay central, we
realize there is demand for
computing on non-PC
devices," said Steven
Ballmer, the Microsoft
president.
An early test bed for the
Megaserver concept is
Hotmail, a Web-based e-mail
system, which Microsoft
bought for an estimated $300 million in January 1998.
Since then, the number of users of the free e-mail
service has jumped from less than 10 million to 40
million. With Hotmail, a person can retrieve e-mail
from anywhere with any PC or other device equipped with
a Web browser instead of being required to use a
particular machine loaded with one's own e-mail
software.
"Hotmail has served as a big wake-up call for us, and
we're delighted that we bought it," John Ludwig, a vice
president of Microsoft, said.
Hotmail is supported by four large datacenters, and
Microsoft is using them as incubators for developing
the heavy-duty software needed to run server farms,
thus improving the capabilities of Windows NT, the
company's most powerful operating system. But
Microsoft, Ludwig notes, is also working to improve the
software the user sees, making it easier to use.
"There's more software to write than ever before --
that's the good news for us," he observed.
Microsoft added another centralized information service
in April when it acquired Jump Networks Inc., a
Web-based calendar and datebook system.
Microsoft's move came a few weeks after America Online
purchased an Internet calendar service, When Inc., for
an estimated $150 million. The start-up, which stores
personal scheduling information on a Web site, started
its fast-growing service just four months earlier.
Both companies are headed in the same direction, though
from different starting points, one a software giant,
the other an online service. Clearly, the line between
software and services will increasingly blur as the
shift to Internet-based computing proceeds.
In an internal memo last fall titled "The Era Ahead,"
Bill Gates, the Microsoft chairman, pointed to the
opportunity as software becomes more a services
business. "We get a closer relationship with customers
and a predictable revenue model because they pay us a
regular fee for the service," he wrote.
But Gates also warned of the rising threat to some
Microsoft products likely to come from online services.
"A company such as America Online is in competition for
all our information-management software, because they
can do it through their servers," he observed.
In Silicon Valley, dozens of start-ups have been
created as Internet services to centrally handle
personal information. The new companies mostly focus on
e-mail, calendars and back-up file storage to insure
information is not lost when an individual's PC
crashes.
"Many of these applications should be moved onto the
Internet because it is more reliable, available
everywhere and cheaper," said Eric Brewer, a University
of California at Berkeley computer scientist who is a
co-founder of Inktomi Corp., a Web software company.
Building and running the computing engine rooms behind
these Internet services promises to be a good business
for years to come. Yet this behind-the-scenes
technology business -- like the market for Internet
appliances -- will most likely be more diverse and
competitive than the bygone mainframe era, whose
dominant supplier was IBM, or the current PC era, ruled
by Microsoft and Intel.
The start of the trend back to central computing has
already been rewarding for the established producers of
"big iron" machines like Sun Microsystems Inc., a
leader in computers running the powerful Unix operating
system, and IBM, whose mainframes have been retooled as
Internet servers. The big Unix and mainframe server
computers range in price from $100,000 to millions of
dollars.
"The big growth for us has been in everything-dot-com
-- the revolution in Internet commerce in all its
forms," said Edward Zander, the president of Sun.
Indeed, as more and more companies begin to view the
Internet not as an experiment but as a technology on
which they run their businesses, they need Web sites,
e-mail networks and Internet order-processing systems
to be up and running around the clock, seven days a
week. That kind of reliable, industrial-strength
computing is the traditional bailiwick of mainframes
and Unix systems.
Still, PC technology is improving steadily and PC
servers -- typically using Intel microprocessors and
Microsoft's Windows NT software -- are increasingly
tackling heavy-duty computing chores. Some heavily
trafficked Web sites, handling huge amounts of
business, are backed up by server farms using mostly PC
technology.
Dell Computer Corp., a direct marketer of PCs, says
that sales from its Web site are now running at a pace
of $5 billion a year. "Look at our Web site," Michael
Dell, the company chairman, said. "It's Dell servers
running Windows NT. Yes, we have a way to go at the
high end of computing, but don't bet against the PC
industry."
Gary Hargreaves does
not much care about
who supplies the
technology. He just
wants it to work.
Hargreaves manages an
electronic commerce
project at Goodyear
Tire and Rubber Co. --
a company Web site set
up to more efficiently
distribute and share
information with its tire
dealers.
The current system,
which is gradually being
phased out, is costly by
any measure -- time,
paper or aggravation. Three thick packets of documents
are mailed out each week to Goodyear's 2,400 dealers in
the United States and Canada. The company's call center
in Akron, Ohio, receives 2,500 inquiries a day from the
dealers, many of which are merely to obtain routine
information on prices and the availability of tires.
All of that kind of information -- along with sales
reporting -- is being transferred to the Web site. A
third of Goodyear's North American dealers are online
and using the Web site, though the rest are joining
soon, and Hargreaves is already impressed by the
results. The call center is reporting fewer routine
calls, he says, and dealers say they are getting more
timely information, which helps them sell more tires
and improve customer service. The weekly mailings will
be stopped at the start of next year.
For all the attention understandably focused on the
meteoric rise of online retailers and auctioneers, like
Amazon and Ebay, the biggest economic impact of the
Internet in the next few years is expected to be inside
old-line companies like Goodyear -- boosting
productivity by electronically automating back-office
transactions.
Though Goodyear has an in-house datacenter, it chose to
let outside experts provide the computing power for its
Web site -- a role known as hosting -- and run its
electronic commerce network. Many companies are making
the same choice. That is why the Web hosting business
of both established companies like IBM and AT&T, and
newcomers like Exodus Communications Inc. and Verio
Inc., is projected to grow from $696 million last year
to $10.7 billion in 2002, according to International
Data Corp., a research firm.
Internet companies like America Online, to be sure,
will have their own server farms. But others
increasingly view computing as a utility, a service to
be purchased like electricity. Indeed, technology
historians note that when factories began using
electricity in the late 19th century, each had its own
power plant. Later, regional utilities were created and
sold electric service to the factories.
At Goodyear, Hargreaves seemed to apply the same logic
to his company's decision to have its Web site for
dealers managed by IBM at its server farm in
Schaumburg. "We're in the tire business," he explained.
"Why run the digital power plant ourselves?"
Copyright 1999 The New York Times Company |
