Outside, in the 70-degree heat, the grime-ridden streets of Istanbul were swarming with demonstrators, voicing their fury with the visiting pro-Islamic president of the Turkish government. Inside the luxurious, Swissotel on the edge of the Bosphorous, the unrest was also rising last month as assembled European IT marketing executives were bombarded with some rather uncomfortable visions of the future of their business. The European IT Marketers Global IT Summit is, by design, a social affair. The annual, all expenses-paid, trip to an exotic location, hosted by IT publisher International Data Corp, forms the ideal backdrop to catch up with old acquaintances and forge new contacts. But with the arrival of Frank Gens, senior vice president of research at IDC’s affiliated market research company, IDG, on to the podium, the mood began to turn more serious – and sour. It all started amicably with a question – is the internet over-hyped or under-hyped, asked Gens? The heavily PC-oriented audience appeared at ease with the enquiry.
Is Wintel obsolete?
Most were unsurprised, and unperturbed when Gens claimed it was vastly under-hyped, predicting that Internet-related revenues will grow by 50% over the next few years, reaching $92bn by 2000 and taking over from the personal computer as the engine of growth for the industry. The next question drew a somewhat more startled response. Is the Wintel PC business model becoming obsolete? The audience looked on uncomfortably as Gens put forward his case. This is no longer a wide open green field. Every deskworker in the US has at least one PC. As a result, he argued, personal computer prices will be cut in half over the next few years and Intel Corp will capitulate and go down the network computer route. By 2005, network computers will be out- shipping Windows PCs, he said. Still reeling from this prediction, Gens went for the body blow. Is there software life beyond Microsoft? Is there an opportunity for a new operating system platform? The response was mute. While the thought of a Microsoft-free world might bring a warm glow to Larry Ellison of Oracle Corp and Jim Barksdale of Netscape Communications Corp, for the majority of the PC industry, the prospect ignites a feeling of dread. But, according to Gens, it could happen. The greatest threat to Microsoft is a new price point. To get to that low point, Microsoft is going to have to unbundle its software and scrap monolithic suites such as BackOffice, he said. But just as things were beginning to look desperate, Gens turned back. Is Microsoft willing to cross that bridge, leap off that cliff? At least the company seems aware of the problem, he said, and currently looks like the most likely to solve it. Thankful for at least this respite, the subdued and remarkably thoughtful audience shuffled out for a coffee and back into the sunshine.
This article first appeared in the June 1997 issue of Computer Business Review.