IBM today sold its Intel server business to Lenovo, yet another example of Big Blue eating its seed corn, effectively dooming the company for the sake of short-term earnings. It’s a good move for Lenovo and an act of desperation for IBM.
Wall Street analysts may see this as a good move but then Wall Street analysts typically aren’t that smart. They’ll characterize it as selling-off a low-margin server business (Intel-based servers) to concentrate on a higher-margin server business (Z-series and P-series big iron) but the truth is IBM has sold the future to invest in the past. Little servers are the future of big computing. IBM needs to be a major supplier and a major player in this emerging market.
Last week the US Court of Appeals for the District of Columbia shot holes in the US Federal Communications Commission’s version of net neutrality saying the Commission was wrong not in trying to regulate Internet Service Providers but in trying to regulate them as Common Carriers, that is as telephone utilities.
The FCC can’t have it both ways, said the Court, and so the Feds get to try all over again. Or will they? I think events are moving so quickly that by the time this particular argument is worked out all the players will have changed and the whole argument may be moot.
Cisco CEO John Chambers gave a keynote speech last week at the Consumer Electronics Show laying out Cisco’s vision for what he called the Internet of Everything and other people are calling just the Internet of Things. The idea is very simple: put intelligence in every device and connect them all together on the Internet. And the idea behind the idea is even simpler: the everything is what we’ll first have to throw away. Because that’s the only way the Internet of Everything can work.
Throw away your routers, wireless and wired. Throw away your network adapters, wireless and wired. Throw away your modems. Throw away your network extenders. Throw away anything with a radio or an RJ-45 port except maybe your PC, though plenty of those will have to be thrown away, too.
We’re generally a Macintosh shop here in Santa Rosa. I have Windows and Linux PCs, too, but most of the heavy lifting is done on Macs. Next Wednesday I’m expecting a delivery from B&H Photo (no tax and free shipping!) of four new iMacs plus some software totaling $5,407. I fully expect these to be the last personal computers I will ever buy.
How’s that for a 2014 prediction?
Following my #1 prediction yesterday of dire consequences in 2014 for Microsoft some readers challenged me to say what should happen this year in Redmond to right the ship. Is it even possible?
So here’s my answer which isn’t in the form of a prediction because I doubt that it will actually happen. But if it actually does come to pass, well then I told you so.
Here is my first of two prediction columns for 2014. There’s just too much for it all to fit in one column. My neighbor and good friend Avram Miller wrote a predictions column this year that’s quite good and you might want to read it before this one. We discuss some of the same things though of course Avram and I occasionally agree to disagree.
This column is mainly about business predictions for 2014 while the follow-up column will be more about products and technologies.
This was supposed to be my 2014 predictions column but the volume of correspondence following a call for predictions on my blog last week was such that I suspect it will be the first of three prediction columns with my actual predictions occupying columns two and three. This column is about the broader subject of how to predict.
I’ve written at least once before on How to Predict the Future. Do a search on that string and an old PBS column will float to the surface. All of that still applies but in this column I want to look somewhat deeper at the motivations and methods of predictors whether they actually know what they are doing or not.
Edward Snowden says (according to Reuters) that RSA Security accepted $10 million from the National Security Agency in exchange for installing (or allowing to have installed) a secret backdoor so the NSA could decrypt messages as it pleased. Hell no says RSA (a division of storage vendor EMC), stating in very strong terms that this was not at all the case. But then in a second day look at the RSA/EMC statement bloggers began to see the company as dissembling, their firm defense as really more of a non-denial denial. So what’s the truth here and what’s the lesson?
For the truth I reached deep into the bowels of elliptic cryptography to an old friend who was one of the technology’s inventors.
There was a time when "activist investor" Carl Icahn actually owned and ran businesses, one of which was TransWorld Airlines (TWA), eventually sold to American Airlines. In an attempt to cut costs, TWA under Icahn outsourced reservation service to a call center built in a prison with prisoners on the phone. When you called to book travel you were giving your credit card number to a felon and telling him when you’d be away from home. Smart move, Carl, and very akin to what may have caused the post-Thanksgiving theft of 40 million credit card numbers from Target, the U.S. discount retailer.
Target used to do its IT all in the USA, then to save costs they moved IT to a subsidiary in India. Care to guess where the Target data breach came from? I’m guessing India. I’m also guessing that there will never be any arrests in the case.
It’s hard to believe sometimes, but I began writing my columns -- in print back then -- during the Reagan Administration. It was 1987 and the crisis du jour was called Iran-Contra, remember it? Colonel Oliver North got a radio career out of breaking federal law. The FBI director back then was William Sessions, generally called Judge Sessions because he had been a federal judge. I interviewed Sessions in 1990 about the possibility that American citizens might have their privacy rights violated by an upcoming electronic surveillance law. "What would keep an FBI agent from tapping his girlfriend’s telephone?" I asked, since it would shortly be possible to do so from the agent’s desk.
"It would never happen", Sessions said.
An old friend has been telling me for months that the future of personal computing was coming with new Windows tablets using the Bay Trail system-on-chip architecture built with Intel Silvermont cores. Silvermont is the first major Atom revision in years and is designed to be much faster. Bay Trail would lead to $199 8-inch Windows tablets while also fixing the limitations of Intel’s previous Clover Trail. Well Bay Trail units are finally shipping but my techie friend is sorely disappointed with his.
The lure of this platform for Intel is great. Manufacturers could use the same chassis and chipsets for everything except gaming boxes and servers. Eight inch tablets, ChromeBooks, Ultrabooks, 10-inch tablets, and netbooks, all one chassis with up to 4GB of RAM and a 256GB SSD. One size fits all for home, car, travel, and work.
On my home page you’ll always see a link to Portrait Quilts, my sister’s website where for several years she has sold quilts, pillows, and tote bags printed with customer photographs. This is how she makes her living, selling on the web and through photo stores. Buy one, please. Or if you are a quilter she’ll print your photos on cloth so you can quilt them yourself.
Then approximately three months ago Google decided that Portrait Quilts does not exist.
Last week I began this series on large companies in turmoil by looking at Intel, which I saw trying to guarantee its future through enlightened acquisitions that actually emulated this week’s company -- Cisco Systems.
So if Cisco already knows how to assimilate other companies and technologies to stay ahead of the market, how can it have a problem? Cisco’s problem is its market is mature and being commoditized with all boats sinking. And this time there isn’t an obvious new idea to buy.
This is the first in a series of columns on the strategic direction of several major technology companies that have faltered of late. We’ll start here with Intel, follow in a couple days with Cisco, followed by Microsoft, then see where it goes from there.
At Intel’s annual shareholders’ meeting last week the company talked about moving strongly into mobile chips and selling its stillborn OnCue over-the-top video streaming service, but the most important story had to do with expanding Intel’s manufacturing capacity. This latter news is especially important because if you look at the square footage of 14 nanometer fab facilities Intel says it will be bringing online in the next two to three years it appears that the company will shortly have more production capacity than all the rest of the semiconductor industry combined.
Amazon Web Services quietly released on Tuesday a pair of new instances on its EC2 cloud computing service. Not just new instances but a whole new type of instance aimed at 2D and 3D graphical computing. For the first time from AWS in a generally available instance, developers and users will have access to virtual machines with GPUs.
It’s like putting a PC in the cloud. More properly it is like putting your PC in the cloud. I think this has great disruptive potential. And that means we’ll see similar services coming soon from other cloud providers.