[lbo-talk] New Business Model

Doug Henwood dhenwood at panix.com
Thu Apr 22 16:36:25 PDT 2004


joanna bujes wrote:


>So here's a snippet that caught my eye from the company-wide mailer
>from the CEO of the company which employs me.
>"So there is a step-by-step process we are going to get through
>-- using reference architectures, systems that connect to Sun
>by default, managed services, customer-ready systems and
>capacity-on-demand technology -- to reach a time and place in
>which every product group has thought about what services are
>delivered via the network. Ultimately, I see a not-too-distant
>future in which Sun owns and operates the equipment for the
>customers and charges them a subscription or utility-based fee.
>Translation: Recurring revenue for Sun."
>
>What I find interesting is the last sentence. Now, it makes some
>sense to me that when a technology reaches a certain level of
>maturity, it could simply become an infrastructural feature (like
>the telephone), which is owned/updated/managed by someone for a fee.
>Now, so far as I can see, the computer has not yet reached that
>level of maturity. I'd think it would take another decade. But
>either way, it seems that once the consumer doesn't own it any more,
>there would be much less motivation for this unceasing
>upgrading/bells/whistles stuff because now, replacing the cpu or
>even extending the software, would cut into the bottom line rather
>than add to profits.
>
>Comments?

Didn't IBM do something like this in the 1960s, only to give it up as computers got commodified? And didn't Microsoft try to push the software rental strategy to great customer resistance a few years ago?

Doug



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