by August 3, 2004 0 comments

Krishna Kumar

In the last two months I have been talking of a big churn taking place in the IT industry. This month, I will look at more examples to bolster my theory. If you think that I am on the wrong track, do feel free to write to me. Better still, make your point at the PCQuest forum.

Let us examine two extremes in the tech market. On the one end, you have the PC. The PC market is supposed to be a bellwether for the health of the industry. On the other extreme you have the enterprise apps market. The enterprise apps market is, in many ways, an antithesis of the IT industry. This is not a market where one talks of technologies. Rather, if you are in the market for enterprises apps, then your concerns are more of the business and process kind rather than of the technology or product kind. This is the market where deals and implementations take a long time, often years, to fructify. Let us see what is happening in these two sectors.

Let us take the enterprise apps part first. The big news in this segment has been mergers, attempted takeovers and attempted mergers by the key players themselves. The big merger that happened was the JD Edwards and PeopleSoft one. The merger that did not happen, but still made the news, albeit way after the discussions, was the merger discussions between SAP and Microsoft. The news about this came out during court dispositions in the case arising out of the attempted takeover by Oracle of the merged PeopleSoft + JD Edwards entity. 

In short, while those of us who have implemented or are in the process of implementing enterprise apps, struggled with issues of getting the apps up and running, and of integration, the vendors were busy fighting for their very survival from each other! I cannot imagine a greater churn that can happen, in this comparatively placid segment.

In the PC market we need to take a longer-term perspective. Once upon a time, creating PC components was good business. Sound cards, video cards, network cards, modem, RAID cards…. There were companies that thrived making all of them. But where are they today? All of those are part of the motherboard today. Initially, only low-end stuff was put on the motherboard. Not so any more. 5.1 surround sound, 100 Mbps or even gigabit Ethernet, 64 MB video cards… all of them are built-in on motherboards. Names that were at one time on the forefront of PC innovation have had to take a back seat, turn to niche markets or look for opportunities elsewhere. Zyxel, Creative, Motorola, TI… the list is endless. If you look hard enough, you will notice that the rate of amalgamation of the component on to the motherboard has dramatically increased. The video card was around for many years before it became part of the motherboard. But motherboards with 802.11 wireless capability built-in have already appeared in the market! 

Like I said in the last two issues, the technology and technology industry landscape is changing fast, even as we stand and watch. But somehow the excitement of the past is not there, at least not yet. Perhaps tech is all pervasive and we take it for granted. Perhaps, we are a wiser lot, having come out of the recent downturn. Maybe I am wrong, and its possible that I have somehow missed it.

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