Collateral Damage from the PC's Demise

Insights and learning can occur at any time, even when you are playing.  This week hundreds of thousands of Fantasy Football players are going through the draft process, where each player gets to select NFL players that will be on his or her fantasy team.  You can choose from ANY NFL player.    Since there are about one gazillion NFL players, most fantasy team owners spend time previous to their league’ draft to whittle down all the players to the ones they want to try to get in the draft.My son and I have a team in a great league, and we have lots of fun evaluating all the  NFL players, and then selecting which ones we want to draft for our team.  This year, after  a couple planning sessions, we have reduced the number of desirable players  to a total of 194 players.  Once we selected  this Meta-level total number eligible, to manage the data and to make a useful tool to keep track on draft night, we needed to divide the 194 into eight position categories ( Quarterback, Running Back, etc.)  Within each of those eight categories, we then needed to be able to rank the players, from best to worst, to help guide our draft picks.   So…We had 194 data elements that needed to be grouped and stack-ranked in eight categories.

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In years past, we would  use Microsoft Office software to produce the draft list.  Sometimes, manually horsing the data elements into Word tables, and sometimes using Excel spreadsheet lists.  Either way, once we were done, and the table or the spreadsheet was completed, it became what I will call static data.    The lists could be modified, but a change created a new version of the list.  Microsoft Office products have been ubiquitous on the corporate scene for almost ten years.  In some companies, it became customary for each manager/executive -level person to have a Powerpoint presentation of what they were doing, what projects, etc, available on the desktop or laptop, to be used whenever needed to explain oneself, or one’s group.  We also used Powerpoint and Excel for sales presentations…Here’s a scenario that many of us experienced at one time or another:
You’re on the way to the airport, accompanied by members of your team, ready to travel to a potential new customer .  Your laptop is loaded with what you think is latest version of the presentation.  In conversation with the team members, it comes to light that the meeting last night continued for a couple hours after you left, and the numbers in the presentation have been modified.  So much for the 12 nicely-bound copies you have in your briefcase—they are dead meat—and so are you, unless you can produce some copies of the new version.  Here’s another common scenario:  You’re on the phone with the prospect, trying to negotiate a nice new deal.  You drill down on some of the numbers, giving some reductions that you hope will close the deal.  The problem is—The prospect is looking at a previous version of the document, which had been emailed to him two days before. People looking at different versions of data and documents was common. Contrast these uncomfortable, low productivity scenarios with how we were able to deal with our muli-category, 194 data element fantasy football list…We used Google drive’s spreadsheet application, and we both accessed the speadsheet at the same time.  We discussed a number of changes to the stack-rank.  The data was viable, not static.    There is only one version of the data–the correct one, and now we can enjoy the fun of competing with other players to draft great players.  The ease of the process we used made me think about what’s going on in the technology industry.  As we have discussed in this space previously, the machine that revolutionized the computer industry in the early 80s–the desktop PC, (and its laptop version), has essentially died as a viable product.  Companies that tied their strategy to the PC are now beginning to disintegrate.  Micosoft’s CEO and former henchman for Bill Gates, Steve Ballmer, is resigning.  They are seeking to transform the company into a “devices and services” company.  They used to be, of course, the world’s leading PC software provider.  They missed the transition to mobile devices, and they missed the new Software As A Service (SaaS) model   They stayed with static-data applications sold for license fees; and they never learned how to sell to endusers, they only knew how to muscle PC manfactuers and distributors into selling their operating system bundled with the machine.

The PC’s Time Is Gone—-Continued

As we discussed in this space  in February, the machine that revolutionized the IT industry by putting  computing capability on the desktops of people everywhere has become obsolete.  Today, you could connect a wireless keyboard to your smartphone and have more computing power than  you had with the second desktop you owned.  And, more importantly, you could do all the things you want to do today.   Gartner, Inc, the respected market research firm , has announced  that worldwide PC sales declined by 10.9% in Q2 2013.   This is the fifth consecutive quarterly decline., the longest in the history of the PC market.


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Microsoft Market Leverage Declines

In the good old days in the PC business—back in the 90s—millions of units were sold each MONTH through the channel, and millions more by direct provider Dell.  In those days, the release of a new version of Windows would dramatically produce a big increase in units sold.  Microsoft actually drove the market.  Now, it is worth noting that the release of Windows 8 occurred during the declining quarter. The new Widows version didn’t create a pop in sales, it couldn’t even prevent a decline. Microsoft used to be successful by piggybacking its operating system sales to PC sales.  MS didn’t really need to market and sell Windows, it just had to control the PC manufacturers and make sure that Windows was shipped with each box.  There are clear implications in the new market for Microsoft.  The two leading PC producers are Lenova, with a 16.7% share of the market and 12,677,265 units sold.  HP is in 2nd place ,with 16.3% share and 12,402,887 units.  It’s interesting that HP has recently teamed with Microsoft’s adversary, Google, to market  PCs bundled with Google’s cloud -based office suite that competes directly with Microsoft’s Office software product.  This is confusing to HP’s channel distribution partners, who for years have been tied closely to—even receiving direction and support (dollars for marketing programs)  from—Microsoft.  So, while Google competes with Microsoft’s Office and Windows products, and Microsoft tries to Bing Google’s search service, businesses  have decided they don’t need employees to sit at their desks  inputting to and/or reporting from cumbersome custom applications that run on the expensive server in  the basement (think TPS reports), and the endusers have decided that they  certainly don’t need over-built  and under-supported desktop computing systems at home to search or to use the non- cumbersome personal apps, which are all increasingly available for mobile devices.  The desktop PC is obsolete. A second revolution— replacement of the desktop by mobile devices has occurred. The PC taught us, and made endusers of all of us.  Now, light, fast, ubiquitous mobile products  have become more convenient and they provide enough capability for what we want to do—-at least until the technology of the cloud and the need for Big Data and Big Screens puts pressure on the capability of the device at hand.

Bill Patch, August 8, 2013