View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
April 22, 1992

AN INDUSTRY IN CRISIS? MORE QUESTIONS THAN ANSWERS AT ZENITH’s LONDON CONFERENCE

By CBR Staff Writer

Computer industry leaders and commentators came together in London last week, under the chairmanship of BBC current affairs presenter John Humphries, to debate the most pressing issues surrounding corporate use of information technology in the 1990s, and to attempt to determine what can be done to rekindle the desire to invest. The line-up was impressive: Bill Gates, chairman of Microsoft Corp – over here to make an appearance (last Wednesday) on Terry Wogan’s prime time BBC chat show; Stuart Senior, senior partner for information technology at Coopers & Lybrand Deloitte; Andrew Neil, editor of the Sunday Times; Ray Sangster, managing director of Zenith Data Systems UK; and Alan Soucy, Zenith’s vice president for strategy and planning. Zenith’s Ray Sangster set a bleak scene, noting that 1991 was the worst year on record for the top 10 computer companies, which saw an average 6% drop in net income on sales down 10%. This he attributed to caution over information technology spend; not necessarily the fault of the recession which, strangely, none of the speakers alluded to. In the 1990s, Sangster suggested, information technology has promised to be the key to an effective corporate infrastructure – but for most users, it has not lived up to these expectations.

Lack of interest

Pessimistically, he went on to predict that computer-related revenues would over the next few years grow barely in line with inflation. He pointed, for example, to a lack of interest in new, more powerful machines, and suggested that users did not really want to upgrade to 80486 and 80586 machines – instead, he said, customers would actually prefer to see a slowdown in the churn-out of ever more powerful machines, because they haven’t yet exhausted the capabilities of the 80386. As long as users can run Windows, it seems they aren’t especially concerned with hardware specifications. Secondly, Sangster proposed that companies are running out of processes to automate – multimedia, client-server, workgroup computing all being fairly new concepts with which many haven’t yet got to grips. Sangster didn’t offer many solutions to the problem, concluding merely that it was no-one’s fault that the market had stalled, that there should be a co-operative attempt between hardware and software vendors, users, the media and even the government, to re-build information technology. Stuart Senior, of Coopers & Lybrand, said many company managers had had their fingers burned, putting their signatures to substantial cheques, only to find that their information technology investments and projects failed to deliver the expected corporate benefits. This he blamed on interwoven conspiracies – where vendors, consultants and particularly users have perpetuated myths about information technology: the vendor, for example, playing on a business’s fear of threat from the competition – suggesting that a close rival is spending more on technology and gaining a competitive edge. The customer, meanwhile, remains convinced that he has squeezed out all the tangible benefits from its computer investment. He said the 1990s would be the time when such conspiracies are found out and busted, as the customer wises up to what he calls the information technology industry value chain.

By Sue Norris

That is, suppliers today are realising that the added value is in bespoke software and services, not in hardware add-ons. Having woken up to this trend, however, many vendors have become unstuck in trying to make the transition from box-shifter to total solution provider, not appreciating the cultural difference: namely that box-shifting is development-based, whereas solution provision is people-based. Bill Gates added to the point that customers aren’t rushing out to buy power upgrades to their Intel-based machines, asking the rhetorical is there a demand to match the fast increase in power? He suggested, for example, that users would not have any use for 2Gb memory addressing until the end of the decade, though the technology will doubtless arrive way before then. He also warned agains

t pushing client-server computing, recognising that users want to feel their mainframes are still useful in a distributed, open modern-day computing environment – he proposed an evolutionary approach to client-server computing, where, for now at least, the large machines continue to store and manage the data, while only the interesting data is passed down to the personal computer. Thus, users retain the security of the large database system, while gaining the benfit of low-cost software tools for the desktop, where the meaty data is analysed and manipulated. Gates went on to plug Microsoft’s Windows Open Services Architecture – WOSA – for transparent access to data held on a variety of hosts. Not surprisingly, he held up the graphical user interface as the key component in the future of desktop computing. Another rhetorical – what comprises a desktop environment today? (the place where the important applications will run) – yielded the reply that the MS-DOS personal computer is where it’s at, 24m of the things now shipping annually, 40% running Windows (soon rising to 80%, Gates expects). He put OS/2 in its place, comparing Windows’ 1992 run rate of 9.2m with OS/2’s 700,000. Gates ended his speech with his vision of the office of the 1990s, predicting that photocopiers and facsimile machines would soon be hooked up to the data communications network. Alan Soucy of Zenith Data Systems returned to the main theme of the conference, defining four fundamental shifts that have taken place in the information technology industry between the 1980s and 1990s. First, he said, labour has become more expensive as the price of MIPS has dropped, giving rise to questions about the cost-effectiveness of an organisation’s computer installations. Second, predictable local rivalry has been subsumed by fierce global competition, with the result that information technology is now expected to play a leading role in protecting the organisation’s competitive business advantage.

Stagnant

Content from our partners
Rethinking cloud: challenging assumptions, learning lessons
DTX Manchester welcomes leading tech talent from across the region and beyond
The hidden complexities of deploying AI in your business

Third, stagnant multi-tiered organisations are evolving into dynamic single-status operations, so that anyone and everyone within an organisation is now expected to, or is able to use computers. Lastly, stationary work environments have been replaced by increasingly mobile work environments, so that computer-related responsibilites are no longer confined to a physical location, or to a nine-to-five job. Soucy’s conclusion was that hardware vendors must assist data processing managers to adapt to these trends, by emphasising the importance of user efficiency over MIPS efficiency; by making machines easier to install, and supplying them with pre-configured and pre-installed software environments, and by anticipating upgrades; and by enhancing mobile facilities. These were all fine ideas, but it’s hard to imagine that hardware vendors will really ever have the user’s interests foremost in mind – for example advising a corporate customer against a MIPS upgrade, telling it rather to go away and re-examine the efficiency of its workforce. Summing up the morning’s events, Andrew Neil, editor of the Sunday Times commented that he had heard rather more questions than answers. Companies, he said, need to know what effect better software and enhanced mobile facilities will have on the bottom line. Referring to his own experience, he noted for example that information technology enabled him to publish a 10-section newspaper, up from just three sections back in 1983 – without information technology, he commented with a smug grin, the Sunday Times wouldn’t be making #35m profit in a recession.

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU