Post-PC Computing

The IT focus is on applications for the Internet, portable devices, and the Linux OS.

Much of the global spending to prevent Y2K failures (estimated at $150 billion to $250 billion) will be wasted unless manufacturing firms remember to leverage their newly streamlined and debugged IT infrastructures. That's the opinion of information-technology analyst Howard Adams of the Giga Information Group Inc., a Cambridge, Mass., research and consulting firm, who adds, "Top managements are in a unique position to exploit a newfound understanding of their IT investments -- especially with respect to e-business." But how many are building on their hard-won knowledge? "So few -- maybe 10% to 15% -- that most are missing a key differentiator in pursuing competitive strategies," advises Adams. He suggests keeping Y2K project groups together to provide planning guidance and support as information technology continues to disrupt the rules of competition in manufacturing. Last November's Comdex computer-industry show highlighted the Internet's role in transforming the prevailing PC computing paradigm as well as the office environment that has grown up around it. At the event Microsoft Corp. Chairman Bill Gates made a point of showing all sorts of Internet appliances, some with wireless network connections, that are challenging the foundations of his company's past success. "One should be able to run [an application] on all devices," he said. "No one device will dominate, and access to information will be flexible." How flexible? Consider how Gates' rival, Scott McNealy, CEO of Sun Microsystems Inc., prefers to have his sales representatives work: "I no longer give my sales reps an office, I just give them a nice Cadillac and away they go. It's way cheaper. I don't want them to drive back to the office. Instead their automobile should just be the docking station for their Palm computing organizer or Nokia 9000 Communicator" cellular phone/PDA. At the launch of e-GM (General Motors Corp.'s e-business organization), McNealy even proposed a Web site for every automobile, with URLs replacing vehicle identification numbers! While Comdex offered evidence that the PC is facing a diminishing role as only one of a variety of Internet access devices, concerns over the death of the PC are clearly premature. The industry has been enjoying double-digit growth for the last five years and is predicted to increase by 20.6% in 2000, says Dataquest, the San Jose-based research firm. That's very close to the 21.3% increase in 1994-1995 when the term 'post-PC' had yet to be coined. Still, it cannot be denied that the outlook emerging from Comdex is that more and more computing will be done not on the desktop PC but on portable devices such as personal digital assistants (PDAs), cellular phones, and notebook computers. Consider that over 6 million people now own a Palm Inc. PDA, the brand that now accounts for almost 80% of the market. To compete in that market Microsoft in April unveiled a new and improved Pocket PC operating system for the handheld devices. One of the first to use the new system is Hewlett-Packard Co.'s Jornada 545, a sleek competitor to Palm's hottest model, the Palm V. Pocket computers are far more than geek toys. For example, in May Modcomp Inc., Ft. Lauderdale, Fla., introduced a wireless e-business solution for Palm VII users. With ViewMax, its integration software, users gain wireless Internet access to mainframe, midrange, and UNIX applications. The solution enables businesses and institutions to offer quick access to applications from remote locations. For example, a sales rep can view customer contracts from the field or researchers can connect to remote library systems. To compete in a market becoming more crowded by other Internet access devices, desktop computer makers are evolving new design strategies. For example, in March IBM Corp. announced the NetVista brand, its first product line based on the company's edge-of-network strategy. Instead of the traditional focus on general purpose hardware, the goal of the new PC strategy is to facilitate easy Internet connectivity while simplifying the whole computing experience, says Brian Dalgetty, IBM's director of desktop product marketing. "For today's customers, the 'one-size-fits-all' PC is giving way to any device that delivers easy access to the Internet and enhances their ability to get things done," adds Maria DeGiglio, senior analyst, D.H. Andrews Group, Boston. Stylistically different from IBM's PC 300 for the commercial marketplace or the Aptiva consumer line, the NetVista uses a standard 15.-in. flat-panel monitor that requires 76% less desk space than conventional PCs. The CPU "rides" on the back of the display. Another disruptive technology is the Linux operating system's penetration of the server market. In an annual revue of server operating environments (SOE), International Data Corp. reports that software licenses grew 93.2% from 1998 to 1999, surpassing 1.3 million units shipped. That accounts for almost 25% of the SOE market. IDC ranks Compaq Computer Corp. as the leader with a 25% market share based on unit shipments. Its Linux revenue totaled $213 million, says IDC. In second place was IBM with a 10.4% revenue market share and $79 million in revenue. Dell placed third with a 9.9% revenue market share. In December IBM formalized its Linux strategy by embracing the operating system on all its server computers, from PCs to mainframes. IBM is clearly betting that Linux is the operating system of the future. Some analysts, however, wonder about the strategic value of Linux on non-PC platforms. One measure of the worth of Linux to Louis V. Gerstner Jr., IBM's CEO, is the executive chosen to lead the operating system effort. Irving Wladawsky-Berger, who headed Big Blue's e-business/Internet initiative, is now vice president of technology and strategy in the computer-server group headed by Sam Palmisano, senior vice president. Top Companies in Computer/Office/Equipment

Leaders by Revenues
IW 1000 Rank Company Revenue (US$ Millions)
8 IBM Corp. $87,548
20 Fujitsu Ltd. $51,341
23 NEC Corp. $46,606
27 Hewlett-Packard Co. $42,370
28 Compaq Computer Corp. $38,525
Leaders by Profit Margin
IW 1000 Rank Company Profit Margin
159 Cisco Systems Inc. 17.2%
285 Seagate Technology Inc. 16.2%
288 EMC Corp. 15.2%
425 Pitney Bowes Inc. 14.9%
312 Apple Computer Inc. 10.3%
Leaders by Return on Equity
IW 1000 Rank Company ROE
59 Dell Computer Corp. 71.8%
532 Lexmark International Group 55.1%
312 Apple Computer Inc. 42.2%
8 IBM Corp. 40.1%
425 Pitney Bowes Inc. 40.0%
Leaders by Revenue Growth (1996 to 1999)
IW 1000 Rank Company 3-Year Growth
59 Dell Computer Corp. 225.6%
159 Cisco Systems Inc. 196.7%
228 EMC Corp. 195.4%
358 Acer Inc.* 172.1%
28 Compaq Computer Corp. 112.7%
*Growth is for 1995 to 1998
Industry Hightlights
Average revenue growth of companies: 8.1%
Company with highest revenue growth (1998 to 1999): MiTAC International Corp., 74.8%
Company debuting highest on list: Maxtor Corp., No. 704
Company with highest profit growth (1998 to 1999): Fujitsu General Ltd., 1,608.1%
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