Sunday, July 30, 2006

The PC and Twenty-five years.

In 1979, my father-in-law argued and won a patent case for Honeywell before the US Supreme Court, making software a proprietary asset. Nick Prasinos paved the way for Bill Gates and a myriad other inventive types to build Silicon Valley and its knock-offs.

The Economist has an article this week celebrating the 25th anniversary of IBM's introduction of the personal computer onto the US market:
In many ways, the PC triumphed due to the very un-IBM way in which it was developed. When IBM's previous attempts at a PC failed to sell, being too expensive, a “skunk works” team of engineers was convened in Boca Raton, Florida. The team did not report through IBM's stifling bureaucracy, but directly to the top of the company. It was given a year to devise a low-cost machine. “The people doing that work weren't talking about it, there weren't any business cases done, there wasn't any annual budget review,” explains Lewis Branscomb, IBM's chief scientist from 1972 to 1986. “IBM did a lot of radical things—and that proved to be very successful.”

To meet its ambitious goals, the team bucked two IBM traditions. First, instead of using only IBM parts, the team chose off-the-shelf components. Second, rather than keep the design a secret, the team made the specifications open, so that independent software developers could flourish. When the PC finally launched, IBM expected to sell 250,000 units in five years. In the event, it had sold nearly 1m by 1985.

Yet the very factors that led to the PC's success inadvertently prevented IBM from reaping all the benefits itself. The PC used a microprocessor made by Intel and an operating system made by Microsoft (led by a 25-year-old called Bill Gates). Neither was exclusive to IBM, and within a year other companies had worked out how to make much cheaper “clones” of its PC. Microsoft and Intel, not IBM, turned out to be holding personal computing's crown jewels.

"This IBM project was a super-exciting, fun project," Mr Gates told PC magazine in 1982. Asked what the future would bring, Mr Gates was as blunt as he was prescient: "Hardware, in effect, will become a lot less interesting. The total job will be in the software." He was right. Today, society both benefits and suffers from the PC's flexibility and openness. The magic of the PC is that it is a general-purpose machine to which new functions can be added simply by installing a new piece of software. "The PC is a very fertile device," says Dan Bricklin, the inventor of VisiCalc, the first spreadsheet program. But this versatility comes at a price, since it makes the PC more complex, less secure and less reliable than a dedicated, single-purpose device.

There is a local legend here in Boca that Bill Gates used to have an occasional beer in the local Hooters [or the waterhole that preceded the Hooters spot which in turn has now morphed into a Starbucks!] and tell his fellow tipplers that he was going to be a gazillionaire from this new PC phenomenon. Probably apocryphal, as Gates seems too single-minded to sit around bars and yak about his personal business plan. Yes, the very versatility and fecundity of the PC platform contained the seeds of its eventual superannuation.
As a result of these shortcomings, many technologies incubated on the PC are moving off it. Functions such as e-mail and voice-over-internet calling that were first rendered in software, just as Mr Gates predicted, are now mature enough to be rendered in hardware. As a result, the PC is no longer centre of the technological universe; today it is more likely to be just one of many devices orbiting the user. You can now do e-mail on a BlackBerry, plug your digital camera directly into your printer, and download music directly to your phone—all things that used to require a PC.

At the same time, the PC is under threat as the primary platform for which software is written, as software starts instead to be delivered over the internet. You can call up Google or eBay on any device with a web browser—not just a PC. People have been saying it for years, but this could finally allow much cheaper web terminals, or “network computers”, to displace PCs, at least in some situations.

These shifts are affecting the big firms that grew up around the PC. Microsoft has moved into games consoles and set-top boxes, chiefly in case these other devices emerge as challengers to the PC as “hubs” for digital content. This week it confirmed that it will launch a digital music-player, called Zune, in response to Apple's successful march into non-PC markets with the iPod. As for PC-makers themselves, the falling prices and commoditisation that have so benefited consumers have turned them into low-margin box-shifters. IBM got out of the business in 2004, selling its PC division to Lenovo, a Chinese firm.

Apple under Steve Jobs has proved more supple in the next generation of spin-offs, even though its original dedicated platform was too proprietary to grab market share as Microsoft did in the early years of the PC. [Also, Bill Gates had a leg up on the market by having participated in the original skunk-works project here in Boca]. And the Pentagon's DARPA spawned the internet, which became the world-wide web which in turn generated all sorts of business opportunities and, of course, blogging! The Economist notes this, but says the PC will remain the spawning ground of new tech.
This does not mean the PC is dead. PC sales, at 200m a year, are at an all-time high. The PC's versatility means it will still be the platform on which new technologies tend to appear first. But with the rise of a plethora of other devices and the emergence of the web as a software platform, the PC now faces a struggle against its own technological offspring.

Sort of the Sorcerer's Apprentice, but we all have gained from IBM's original experiment with diversity.

No comments :