Wednesday, April 20, 2016

The Human Cost of Market Change: PCs

I was startled to hear from Linda Bridges, the owner of Pacific Solutions.  She called to tell me the computer market had changed too much for her store's value proposition to be effective so they were closing soon. The company I work for has done business with Pacific Solutions for many years. I appreciated Linda's efforts to support Linux, even in the late 90s. She and her team kept our network going, and they fixed many problems we had. We'll miss them.  It's always hard to see the human cost when markets change substantially. My friend, Bob, who volunteers at Free Geek, says the lap top computer market is collapsing too, with many units coming in for salvage and refurbished models selling at low prices if at all.

In previous posts, I wrote about the decline of the desk top computer and by extension, the laptop computer. I have a collection of several desk top 70+ lb behemoths. Today, though, mini pcs which are something we would have called a nano computer a few years ago, does as much as the huge elephants. The new computers are tiny and can be mounted on the back of a monitor. I think this is the next wave of computers, combined with usb stick computers (think Google TV), and tablets. The most interesting part is the fact that the typical tablet computer can't do as much as a desk top computer manufactured after 2005 or 2006 when that type of computer peaked out.

Major computer tech companies are starting to lay off large numbers of people right now. IBM is laying off work force members all over the world. IBM is the home of heavy metal main frame computers. Another company laying off is Intel, who will lay off approximately 10% of their workforce. If IBM's talent is main frames, Intel's talent is their duopoly with Microsoft and manufacturing mother board chips for desktop PCs. Interestingly enough, while their balance sheet is not as fat as it was in the early 2000s, Microsoft seems to be pulling off big changes successfully.

 When you think about it, Microsoft Office 365, is Google Documents on steroids.Google Docs are wonderful, but they have an open source feel to them. I'm stuck on Microsoft Office, and my professional writing has to be in Microsoft Office formats. The wonderful part of Office 365 is using the online version of Word to edit my docs on a Linux box. Microsoft, in a total surprise move is starting to embrace Linux (similarly to Google's embrace of Linux in the form of Android?). Windows 10 is now free for most people. They have converted to software as a subscription, which means they shifted successfully form the desk top frame of mind. More evidence of Microsoft's shift away from the PC is the fact Office 365 runs just as well on all my devices which include laptops. desktops, tablets, and phones. 

I'm amazed and overjoyed. Microsoft has become a company that is much better to work with. Unexpectedly, Intel and IBM are having problems because they did not embrace change quickly enough or radically enough. My business education tells me Pacific Solutions, Intel and IBM's struggles are very typical in a radically changing marketplace, and that Microsoft, while they still have challenges, is likely to survive the shake out.