At the intersection of technology, finance and the Pacific Rim.

Monday, September 25, 2006

Cheap Revolution

Forbes has an interesting article on what they term "The Cheap Revolution". Cheap hardware, web access, and open source software, they contend, will change the landscape of enterprise computing. Not just change the landscape, but blow it away.

In class we have learned of Moore's Law. In addition, we have also read Clayton Christenson's remarks about radical innovation or technology advancement being coopted by the incumbents. The telecom world (especially the operators) is Exhibit One for this phenomenon.

There was a panel discussion on venture capital (which I hope to show later in the course) in which an investment banker from Morgan Stanley contended that not much was happening in the enterprise space--to which Vinod Khosla, the eminent (and arguably the most successful) VC argued vehemently to the contrary. In some industries, we have seen revolutionary advances (e.g. digital media and devices) in a consistent, incremental way while in the enterprise developments seem to proceed in a glacier like way. In large part this is due to the end customer-- large beasts with terabytes and petabytes of data, the corporate treasures which all must be carefully integrated and accessed in an orderly manner. Yet at some point, the dam breaks (witness the near collapse of IBM in the early 1990s) when cost performance numbers can no longer be ignored by even the most conservative customer. We could very well be due for another such shift and the slower the change over the years, the faster the breakage occurs.


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