Its a crazy time in IT right now - spending is picking up from the post Y2k draw back, Companies are finding out how to leverage the web, how to make money on and via the web, and the "services" Web2.0 bubble is upon us.  I haven't  blogged entries lately cause its hard to say where things are headed - but some things are very clear.  One of them is, Dell-Intel-MSFT - while still huge players in the industry, no longer control it.  There are signs of this everywhere.Its a different thing - being a dominant player in a massive industry that you don't control, from being the controller.  And all 3 are having trouble making the adjustment.

How crazy is it?
Here are a few things you would call me bat-headed crazy for predicting even a year ago:
    MSFT helps Firefox work well under Vista pre-release
    Dell starts shipping AMD chips, even in laptops
    SUN sells more servers than DELL

Here are a few things, that everyone predicted, but still make it a crazy time in this industry:
    VISTA delays (again?)
    Apple Macs gaining traction outside the "creatives" world
    sub $1k laptops that perform well
   

Web2.0 Bubble - services!
There is a lot of Venture cap money that is headed into the web services startups right now.  Those bi-zillionaires just can't hold cash for very long.  There are clearly a lot of web services that are not going to make it - and the economies of transactions will kill them.  Sounds great - lets start a web service that can be a small part of several larger web services.  Only, if you are the web-calendar-reminder-queue-mgt service that netflix or audible uses, how much of my $10 a month are they going to pay you? (Answer - not much.  They are going to write their own, due to the economies of scale of the massive customer base of the web/planet, and make more money that way.)

I am reminded of the "shopping-cart on-line catalog" infrastructure vendors of the late 90s - google "calico" for a great story.  They made a killing, selling their "get you up and running" infrastructure (lisp based, loosely, could handle complicated on-line component-subComponent configs like the DELL store (early versions)).
Nowadays -  adding a shopping cart to a web site is....free in most web IDEs (even on line ones.....that come free with your DNS registration....just to get more registrations....)  Adding a catalog capability is also nearly free.

And far before that, even DELL realized they had a large enough customer base to start writing their own online cart and catalog systems, and cut the ties to Calico....(calico Stock shoots from above 100 to below $1 in the first web bubble).  Now calico was also victim to the IXL like accounting of "keep signing lots of fixed price contracts for custom development" - this works as long as each month you sign more contracts than last month - but eventually all those projects run out of money long before they run out of work and commitments.

My company does custom software work in addition to license sales, and we watch those projects and commitments closely - and the sheer volume of them compared to our other revenue.  Call it risk analysis.

So calico and IXP sales pace drops a little and their company crashes.  Especially if you throw in "commoditized creeping price pressure" - everything that is custom and expensive, but lots of folks need, becomes cheaper and a commodity.....(see Linux, Solaris, IIS, for examples - are you listening Oracle, MSFT?)

Many services companies will make it (don't everyone flame this).  Many will sign too many projects, get hit by price compression, be immature in managing projects for profitability, and fail.  Many will find out thier prospective customers (ebay, amazon, salesforce) can write thier own services due to the economies of thier massive customer base and transaction loads.

Dell-intel-Msft troubles and adjusting to being "just dominant"
Intel held a recent briefing where, when questioned about their "evolving" roadmap, they said they didn't think anyone needed 4,8,16,32 core CPUS.

Sounds a lot like the familiar quotes of the big 3
    No one wants AMD chips - dell
    No one wants multi-core (dual) CPUS - dell, intel
    No one wants 64 bit - Dell, Intel, MSFT

Well, we do.
We really want 64 core CPU chips.  We could use them today.  And once we have them, we will start to exploit them.  I could make a pedantic list of all the tasks (43 of them) running on my laptop right now - and this is on a single core CPU. Image what I would be running "oh but if I could".  I am talking the normal PC user, the business user, and the scientific computing user. (I am all 3, in a single day...)

Home video, photo editing? Give me thousands of CPUS - this is an easily paralleled processing problem.
Home video watching?  Need lots of CPU to compress, store, render several HD channels at once.
    (its nearly 2 or 3 channels per household member at some hours in our house)

"640k ought to be enough for nearly everybody" - Bill Gates, circa 1980s.

Don't make bounding predictions in this exponentially explosive industry.

I am sure there are hundreds of Nascar.com , Major league baseball.com, HBO.com, disney.com out there that would stream custom HD video and audio to everyone they could for $4 per customer per month, if they had 128 core CPUs to do the rendering in real time.

Itunes is just the begining folks, MP3s are small and you listen to them many times.

The real push-pull media will be massive steams for single or few uses - and we all need tons O CPU to pull that off.  And 64 bit processing and addressing (Stop putting OS calls and video memory at the 640k, and 1.7gb line MSFT - other operating systems don't use my program address space and ensure thier memory model becomes obsolete in a mere few years....)

People are dropping thier expensive  land lines  - paying "by the minute " for cell phones is actually cheaper.
Watch cable TV go down the same way - in a few years, you will pay by the byte to have "streaming colors of video goodness wash over you" - - and save money doing it.

People love thier stuff "net based".  Google mail, salesforce.com, audible.com, itunes, netflix.  Save my stuff "out there" - where I can always reach it.  Soon that stuff will include CPU intensive things like my home movies, my scientific computing.

The web economy serves ala carte with the efficiency of mass production.  Because there are hundreds of us that want to watch that strange indie flick about a red head running thru munich.  And its only bandwidth and CPU cycle costs holding us back.

There are plenty of pressures pushing bandwidth (telco, video cable, web access, business data transfer).

The pressures for massive CPUs are just mounting - and the companies that are architecting for them will win the day in the next wave. 


What will massive core (64 and up) CPUs drive? Storage demand.   Maybe someone should buy StorageTek. Too late.