Leslie D’Monte
The rapidly-moving technology treadmill can compel companies to rework their business models or reprioritize their focus areas.
Take the case of Microsoft Inc., which heralded its push on hardware with its ‘Surface’ tablet personal computer or PC–a move clearly spurred by the success that Apple Inc. has tasted with its iPad and Samsung with its Galaxy tablet PCs.
Apple alone sold 15.4 million iPads during the fourth quarter of 2011.
Not to be left behind, Internet search leader Google Inc. is rumoured to follow suit with a tablet PC later this year. The world’s largest online retailer, Amazon Inc. had introduced its own tablet late last year.
While most people identify the tablet PC with Apple’s iPad, the term was made popular by Microsoft way back in 2001 when it announced a product that was defined as a pen-enabled computer conforming to hardware specifications devised by it and running mostly a licensed copy of a “Windows XP Tablet PC Edition”. The software company, however, was not able to capitalise on its first-mover advantage, and analysts attributed the failure to bad timing, high pricing and poor user interface (UI) design. In January 2010, Microsoft had another go at the tablet. HP’s Slate device was demoed by CEO Steve Ballmer at the Consumer Electronic Show (CES), along with tablets from other vendors.
Hardware is not new to Microsoft, primarily known for its software or Windows Operating System (OS) business. The company has its highly popular gaming device–the Xbox360 and Xbox Live–all from the company’s hardware unit set up way back in 1982. And since a well-integrated device is a delight to consumers, especially if the software does not crash or hang mid-way, Microsoft’s ‘Surface’ tablet PC may see success if it gets its act right like Apple or Samsung did.
But while Microsoft is betting on this hardware push, there have been technology companies that have moved away from hardware to software and services.
For instance, the $100 billion International Business Machines Corp. (IBM), which sold its personal computing (desktops and laptops) business to China-based Lenovo in 2004, is sharpening its focus on enterprise software even as global revenue from hardware declines. IBM, according to Gartner, now ranks as the No.2 enterprise software vendor currently after Microsoft Corp. Other companies like Hewlett-Packard Development Co. LP and Oracle Inc. are focusing on services, and so is Dell Inc. that was synonymous with hardware and the poster boy for hardware supply chain best practices.
And companies like Google and Amazon are today competing with Indian and multinational information technology (IT) service providers in the outsourcing space with the help of cloud computing—also known as a non-linear or non-headcount-related technology—that is reducing the IT infrastructure and software costs of their clients by hosting them on their own data centres.
Coupled with the popularity of social media tools, new models are emerging, and with it, new competitors.
Once an online leader, Yahoo! Inc. is almost being treated as a spent force while Google–a David in 1998–forced the then Goliath, Microsoft, to go Live (read concentrate on the online world). Social media networking company, Facebook Inc.–which today has over 900 million users, of which 51 million come from India–has become the world’s largest social networking site right under the nose of Google which had its own Orkut. Facebook is rumoured to be working on a smartphone. And this is not the last of the changing business models that the tech world is seeing.
