"COMPAQ Gets Religion"
Friday November 19 11:19 PM EST
Comdex witnesses dawn of new IT age
Lisa Dicarlo, ZDNet
LAS VEGAS -- The PC has become so passe that even PC makers are reluctant to talk about it anymore.
The notion of Internet appliances as adjuncts to or replacements for the PC dominated the industry's biggest trade show here this week. Comdex marked a symbolic end to much of what IT buyers have come to expect from the beige-box PC, not only in technology and style, but also in terms of services, content and support.
Every major PC company is developing systems for consumers and corporate customers alike that look and function more like VCRs than PCs, with televisionlike simplicity the ultimate, albeit long-term, goal.
Beyond the box, PC companies such as Compaq Computer Corp. are building portals for customized content. Dell Computer Corp., which once eschewed handheld devices, is expanding its hardware lineup to include a two-way wireless device, which it will license from Research In Motion Ltd.
In addition, services, not systems, are becoming a primary driver of PC sales. Dell, of Round Rock, Texas, is refining the support.dell.com site for personalized Web support, an initiative that was announced in August. Gateway Inc. in January will launch eSource, a program for providing corporate customers with customized, private Web sites. Also in January, the San Diego company will expand its consulting practice for corporate accounts.
Four out of the top five PC makers have established venture capital funds to invest in infrastructure and content companies in an effort to offer customers an outside-the-box experience.
Compaq gets the religion
Surprisingly, the world's No. 1 PC maker, Compaq, has become the most bullish on information appliances. It's predicting that by 2005, multifunction cell phones, pagers, desktop terminals and handheld computers will make up 90 percent of its client sales. The other 10 percent, it says, will be desktops, portables and workstations.
"The Web is replacing the PC as the engine for IT market growth," said Jeffrey Harrow, senior consulting engineer at Compaq, in Houston.
In fact, Compaq is in discussions with consumer giants Sony Corp. and Nokia Corp. to help develop these devices, which Compaq will eventually sell under its own brand, said Jerry Meerkatz, a vice president at Compaq.
To handle the radical change in the way people are expected to buy and use PCs, Hewlett-Packard Co. is developing PC-centric services "tailored specifically to customer segments."
HP is refining the model and hopes to deliver on it next year, said Webb McKinney, vice president and general manager of HP's business PC organization, in Palo Alto, Calif.
One clear option is application hosting.
"There's a strong interest in application hosting, whether it's from us or from someone else," McKinney said. "Small businesses are looking for virtual IT."
HP is working with Qwest Communications International Inc. for hosting, and Dell is working with eOnline Inc. for SAP AG R/3 hosting. This week, Compaq announced a deal with Cable & Wireless Plc for application hosting services.
If delivered properly, the evolving custom content and delivery infrastructure could hit a sweet spot with IT managers.
"If I can deliver specialized content internally and externally, especially to customers, then that's an important strategic part of our business," said J.B. Dunn, desktop technology manager at Roadway Express Inc., in Akron, Ohio. "It's largely true that hardware is inconsequential. I'm not aware of any revolutionary hardware technologies."
Wintel: Not so fast
While acknowledging that the role of PCs is narrowing and being redefined, two companies with a vested interest in today's platform -- Intel Corp. and Microsoft Corp. -- say the PC remains the cornerstone of the digital age.
"PCs are alive and well," said Pat Gelsinger, vice president and general manager of the Desktop Products Group at Intel, in Santa Clara, Calif. "We're doing 120 million units a year. We support the other [platforms], but let's not forget [ the PC]."
"PCs are important. Other devices are important. And they all certainly fit in the context of what we think is important," said Steve Ballmer, president of Microsoft, in Redmond, Wash.
Rivals trying to turn the Wintel platform on its ear have a different view.
"Our opportunity is in the killer applications of the 21st century, not reinventing the PC platform," said Bob Young, chairman of Red Hat Software Inc., in Cary, N.C. "The killer apps will be Internet appliances."
The upside of the post-PC era -- or the "PC plus" era, as Microsoft refers to it -- is less reliance on traditional technologies and companies for productivity in the office, on the road and in the home.
It's a transition and an opportunity that technology and service providers, suppliers and especially customers have not witnessed since the birth of the PC 20 years ago.
Said Compaq's Meerkatz: "The whole world is open again."
Additional reporting by Ken Popovich, Carmen Nobel, Scott Berinato, John Madden, Michael R. Zimmerman and Rob O'Regan |
