| Third-quarter server sales figures are coming in this | | | | companies went under as new, more efficient modes |
| week and, not surprisingly, the numbers aren't good. | | | | of transportation were developed. What the railroad |
| IDC reports the worldwide market declining a painful | | | | magnates failed to ask themselves at the time was |
| 5.2 percent year-on-year, down to $12.6 billion - the | | | | whether they were actually in the railroad business, |
| biggest fall-off since 2002. Volume systems dropped | | | | or in the transportation business. If they had |
| 7.2 percent and midrange fell by 9.5 percent, although | | | | answered the latter, they would have shifted their |
| high-end systems grew by 4 percent. | | | | resources to take advantage of the newer |
| It seems that the industry not only has to contend | | | | technologies. Cable operators decided they were |
| with a faltering economy but a more fundamental | | | | telecommunications providers at heart, and have |
| drop-off in the need for new hardware. Blame the | | | | been at least marginally successful at transitioning into |
| usual suspects - virtualization, consolidation - for the | | | | new forms of communication. |
| latter trend, which would indicate that, even after the | | | | I suggest that just such a moment is approaching for |
| current downturn is spent, we're never going to see | | | | the hardware industry. The question to IBM, HP, Dell |
| hardware shipments like the 1990s again. | | | | and the rest is this: Are you in the server/storage |
| This leaves the major manufacturers in a difficult, but | | | | business, or are you in the enterprise/data center |
| not impossible situation. IBM still held the top spot in | | | | business? In his most recent post on Intelligent |
| Gartner's view, its 30.3 percent market share just | | | | Enterprise, David Linthicum wonders how IBM will |
| edging out Hewlett-Packard at 29.8 percent. Still, that | | | | balance its pursuit of a cloud strategy with its need |
| represents a loss in server revenue for Big Blue of | | | | to sell enterprise hardware and software. I'm sure |
| about $3.86 billion. Ouch. | | | | IBM has its own answer, but mine is: It won't. |
| So, what's a hardware company to do? More than a | | | | If the company is smart, it will recognize that |
| decade ago, when I was covering the cable TV | | | | increased reliance on clouds and other |
| industry (I know, I've had a varied journalistic career. | | | | service-oriented schemes will eat into its hardware |
| But hey, I go where the money is), the big threat | | | | revenues. And that's OK, because at least the |
| was encroachment into the video distribution game | | | | company is staking a claim on the future, rather than |
| by telecom and satellite providers. In response, the | | | | fighting a losing battle by clinging to the past. |
| leading cable operators decided that turnabout was | | | | And the beauty of it is, there will always be a need |
| fair play, and they moved into broadband data, voice | | | | for hardware, and in the future, that demand will |
| and professional business services. Some of them | | | | most likely come from the cloud providers that IBM |
| even offer wireless now. | | | | and others are fostering now. Older technologies |
| The analogy for the business lesson they were | | | | rarely go away forever. They just might not be as |
| employing actually came from about 100 years earlier | | | | dominant as they once were. |
| - the old railroad days. It was noted that the railroad | | | | After all, we have high-tech telecommunications |
| industry collapsed and many seemingly invincible | | | | today, but we also have railroads. |