PC Dies

By Scot Petersen  |  Posted 2004-12-20 Print this article Print

The day the PC died

A long time ago, in a galaxy far, far away—no, wait, thats another fairy tale. Once upon a time (1981), the largest computer company in the world (IBM) started building small computers (PCs) that were easy enough for one person to operate, and they were good. The giant company teamed with a spunky upstart (Microsoft) to build software for the small computers. New magazines (PC Week, PC Magazine) sprouted up to cover the phenomenon.

Over the next 20-odd years, PCs and their software made IBM, Microsoft and many others lots and lots of money. And it was good. But it turned out that the giant computer maker couldnt produce the small computers cheap enough or quickly enough—or, well, good enough—while others (Dell Inc.) could. So on Dec. 8, the giant computer company said goodbye to the small computers forever, selling its PC business to a Chinese company (Lenovo Group Ltd.) that is trying to become the next IBM. The end.

Googly eyes

A lot of industry columnists, including this writer, predicted that the Google Inc. initial public offering would be a bust, an opinion that had nothing to do with the companys excellent search engine and more to do with things such as finance and the vagaries of the stock market. We were wrong. Google, offered at $85 Aug. 19, topped $200 briefly this fall before settling to approximately $170.

That success was just one of many for the Internet search leader. It introduced a free e-mail service, Gmail; launched a desktop search service; and started hiring the brightest minds in the industry. This month, Google announced plans to create a searchable index of more than 15 million books from major libraries around the world. In addition, along the way, it became what most highflying companies become: a target—first of litigation in a battle over keywords and then with competition on its own turf as Yahoo and Microsoft each beefed up their services in response to Google, which was then a target for crackers seeking to expose holes in its service.

INS and outsourcing

Nobody knows for sure how many jobs have been lost to the latest cost-cutting measure: offshoring work. The AFL-CIO quotes The Goldman Sachs Group Inc. estimates of 400,000 to 600,000 professional services and information-sector jobs that have moved overseas in the past few years.

Another company, Global Insight Inc., figures that 104,000 IT jobs moved offshore between 2000 and 2003. HireAmerica.us cites a Frost & Sullivan Inc. study that says 826,540 IT jobs are expected to be moved by France, Germany, Hong Kong, Japan, the United Kingdom and the United States to lower-cost countries. The figures will no doubt rise in the coming years. The effects of this job migration will be felt for years to come. Meanwhile, long-term outsourcing services contracts continue to be the bane of many companies. In September, J.P. Morgan Chase & Co. dumped its seven-year, $5 billion contract with IBM Global Services signed only two years ago, choosing to move IT operations back in-house.

Linux: 2.6 and counting

The first Linux distributions with the newest kernel, Version 2.6, started appearing in April, with new enterprise scalability and performance features that put Linux squarely in competition with Unix and Windows Server.

Potentially more damaging to Windows, however, is that while Microsoft hurries to get its next server, code-named Longhorn, ready for a 2006 release, Linux will gain more market share. Linux director Linus Torvalds said last month that hes satisfied for now with 2.6 and is pushing any new development tree for a 2.7 kernel well into next year. Meanwhile, the Free Software Foundation is starting the process of reviewing and updating the GNU General Public License—the most widely used open-source license and the license under which Linux is released—with the goal of tailoring it for 21st-century issues such as copyrights, intellectual property and patents. That process will likely climax around the time Longhorn ships.

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