[lbo-talk] New Business Model

Dwayne Monroe idoru345 at yahoo.com
Thu Apr 22 17:09:57 PDT 2004


Joanna wrote:

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.

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Although Sun Micro's management may try to spin this as a new idea, it is, in fact quite old and merely the latest effort by Sun to create a revenue stream and business model which competes head-to-head with Microsoft in the game of monopoly.

In the mid-nineties, Oracle and Sun launched 'thin client' initiatives designed to create an updated version of the mainframe/green screen terminal topology which dominated computing in decades past. The falling price of PCs and stranglehold of Windows on the corporate market made this a non-starter.

Now Sun is trying to pour this old wine into a bottle that's not even new, but just slightly brushed off.

Theoretically, "utility computing" (which is what Sun's really talking about here) is a fantastic idea -- ubiquitous and inexpensive access to tremendous processing power available everywhere through the use of portable devices that merely provide an interface to the processing grid. Anyone who's watched "Star Trek"and noted the method ofcomputer access depicted will have an immediate idea of what the ideal endpoint would be.

The problem with this model is that the entities trying to make it happen are corporations which are undependable, subject to rapid, destabilizing change to increase profitability and very likely to engage in price gouging.

companies will not trust Sun to manage their data and will resent renting equipment they could purchase in the past. Also, one of the major contributing factors to the success of the computing industry -- at both the hardware and software ends -- is the large population of professionals who perform triage on the vendors' sloppy work. If Sun, or any vendor, tries to cut these people out of the loop, attempting to manage the inevitable problems of their customer base on their own it will only produce chaos and disgruntlement as customers with malfunctioning code or hardware wait for the vendor to get back to them.

what's really happening is that profitablity is a more difficult prize to grasp and companies are grasping at straws to tweak greater profits out of a stagnant situation.

.d.



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