Last week, HP stunned observers with two major announcements: WebOS would be no more and the PC business is for sale. Are these decisions indicative of new times or just a new CEO? "A little of both" is the safe answer, but really these decisions have the most to say about the iPad--perhaps the post-PC era really has begun.
For years now, the UC world has debated the ongoing justification of desktop phones. Will phones be replaced with the more powerful, more intuitive softphone and headset, or are phones here to stay as a single purpose, always-on, optimized familiar device? Suddenly the debate changes: Does the desktop computer itself have a future, and if not, does that actually extend the desktop phone's future?
HP thinks the PC business is too low margin, and the company hasn't been successful with going upmarket in a commodity business. The decision represents a major flip-flop for CEO Leo Apotheker, who just a few months ago said that being in the PC consumer business gave HP a strategic advantage, arguing that this made sense due to the consumerization-of-IT trend. However, last week, Apotheker determined , "to be successful in the consumer device business we would have had to invest a lot of capital and I believe we can invest it in better places." Such as Autonomy, maker of information management software, for a mere $10.3 billion.
Yes, the world's largest producer of PCs, Microsoft's largest customer, just declared it is time to get out. The official reasons were low margins, but PC sales are also declining, as are the reasons to buy them. What HP intends to establish is what what will become known as a milestone event, a milestone in the transformation of personal computing to mobile devices powered by cloud services. Apple, the architect, is supremely positioned and may indeed wind up with the last laugh in its quarter-century struggle against Microsoft.
The iPad will be what history records as the proverbial last straw. For years, organizations have been grappling with the increasing complexity of IT. The PC was the device that unlocked IT from the glass house and empowered the desktop. But slowly the barriers to control came back--security concerns, virus management, retention policies all conspired to strip the individual of computing freedom, and increased the cost (and security challenges) of IT. All of this was legitimate and easy to understand and endorse. Centralized computing returned as the norm.
This turned out to be fairly convenient as mobility took off. We were portable (mobile), but our data wasn't. For years we took our laptops to and from work and on extended travel. Multiple computers were always out of sync. For the past decade, the industry tried to improve remote productivity with various evolving tools--MS Briefcase, Citrix, RDP, Tarantella, MS Terminal Server, and others.
Concurrently, Apple's smartphone model took hold and mobile email became standard. The term "Crackberry" to represent email addicts disappeared because it turned out that being connected had nothing to do with the device, but rather the content. Email on-the-go fueled the mobility sector at the cost of the desktop sector. We've been moving our data off the desktop and back to the data center or cloud. Broadband, especially through 3G/4G and wi-fi, made connectivity reasonably ubiquitous in the US, and truly ubiquitous in other parts of the world. The iPad, introduced only 16 months ago, allowed truly mobile productivity with very little local data. And unlike the desktop, all age groups seem to enjoy it.
It isn't just the iPad that threatens the PC; Google's efforts with Android and the Chromebook also are dragging down the desktop computer. The cloud-ready Chromebook is available to schools for $20/mo with support --far less than a PC and with no moving parts. The justification for buying a desktop computer is burning to the ground, and Microsoft itself is fanning the flames with Office365. Microsoft's cloud decision was no doubt full of strife, but critical to remaining relevant, and represents yet another milestone.
So much for HP's moves with regard to the PC market. The WebOS announcement is a slightly different matter. WebOS is generally considered a reasonable and viable solution. A solid product backed by a huge marketing campaign is normally a safe bet, but all bets are off when you're up against Apple. HP didn't have the volume (or indirect revenues) to match Apple on price, and certainly didn't have the apps to match the functionality. HP had no business taking on the iPad, which Apotheker understood.
Though outright killing WebOS is probably an even bigger mistake than purchasing Palm in the first place. HP wants to sell to enterprise and industry markets that also need to embrace mobility and tablets. Rather than taking on Apple on its consumer turf, HP realistically had a far better opportunity with specialized tablets optimized for various verticals such as health care and transportation: WebOS devices optimized as tools of the trade, such as nursePads, or potentially housed in the back of airline seats for entertainment and shopping.
There are two very powerful and opposing forces in play. On one hand we have the cloud, fueling mobility from any location with a simple thin-client web-ready device. Example: Virgin America offers wi-fi and free use of a Google Chromebook to show just how productive flight time can be. Then you have the wave of smartphones and tablets popularizing the return of client software applications binding the specific device, and subsequently the platform, to the user. Which way is UC heading? All ways.
The UC vendors are caught in the wave of change. Enterprise UC vendors are rushing out iOS and Android clients for smartphone and tablet users. These clients extend the UC capabilities to the portable device. This is a huge transition for voice--migrating from a proprietary desktop phone to a third party device with independent call control.
In addition, softphones are increasing in popularity, both driving down revenue and increasing intuitive use of advanced features. UC makers are focusing on clever desktop clients that natively integrate in a Windows environment despite the fact that Microsoft is a direct competitor.
Softphones are a critical catalog item because, in spite of HP’s decision, desktop computers are still vital for many users. Softphones, though, are not yet well supported on virtualized desktops, so these users, as well as traditional users, still require desktop phones, which don't seem to be disappearing either.
Cisco, Avaya, and RIM launched enterprise tablets to combat consumer tablets. Microsoft, RIM, and the Android gang are combating the iPad and iOS. Tablets are taking on desktops, softphones are threatening phones, end users are challenging IT with consumer devices and services, software is breaking free of hardware, and the cloud is taking on premise solutions. The entire communications sector is as stable as quicksand in a monsoon. It isn't all bad; there are some winners emerging from recent debates: LTE over WiMax, Android is well past fledgling, HTML5 is maturing, and SIP is heading mainstream.
The desktop isn't dead yet, but HP shifted the conversation. The post-PC era hasn't started yet--even the iPad still needs one out of the box. But the writing is on the pad. Will the desktop phone be replaced by the PC, or will the whole desktop be replaced first with a tablet? HP may want to exit the PC business, but PCs are far from dead, and may never totally die, just as mainframes and mini's live on decades after their "demise".
It's personal computing: the sequel. PCs took off because of the empowerment and liberation they originally delivered. The tablet today wears that crown--liberating users from the shackles of IT. The drama continues: the Cisco Cius for example, comes complete with its own enterprise app store, promising IT control over which apps users can install.
The primary conclusion we can draw is that mobility changes everything and will continue to drive communications more than anything else. All things UC intersect with mobility, including teleworking, softphones, video, IM, screen sharing, simo-ring, voice, SMS, and anything else considered important to productivity while on the go.
It also means the next amenity airlines can cut will be on-board movies. Get back to work (or bring your own).
Dave Michels is a frequent contributor and blogs about telecom at PinDropSoup.com.
