Mark Tolliver, executive vice president of marketing and strategy at Sun, showing off a rack of 1U two-processor servers.
Welcome to technology sweeps week.
Like television broadcasters and cable companies, tech companies tend to schedule their major seasonal announcements around each other's. Ideally, one company's event will precede a competitor's by a day or so.
The end result, though, is something like a traffic tie-up: Twice a year, for about 10 days, nearly every major CEO and their high-ranking executives trot up on stage to deliver the company's outlook on the world economy, the tech market and the reasons their company will succeed.
A couple of weeks ago, IBM chairman Sam Palmisano presided over Big Blue's spring security analyst meeting in Boston. The next day, CEO Craig Barrett and the extended Intel executive staff gave a four-hour presentation in New York on, among other topics, the effects of globalization and 90-nanometer manufacturing.
During this period, Dell Computer and Hewlett-Packard presented their quarterly earnings reports. Later on, HP said, it will make a "significant" enterprise announcement, which many believe will be the formal unveiling of its blade desktops. More immediately, it debuted a new round of PCs.
Sun chief Scott McNealy and Oracle CEO Larry Ellison, meanwhile, described how they will unite on a bid to take market share in low-end servers from Microsoft, which, with a completely unanticipated event, made headlines by striking a licensing deal with SCO Group.
Expense is not spared. Sun, for instance, held its press conference at the San Francisco Museum of Modern Art. (The multilingual crowd described above did not consist of reporters flown in for the event, however; I was mistakenly standing in line for the people trying to get to the museum itself.)
Can much be gleaned out of these events? It varies. Often, they serve merely to reiterate a company's party line. During the late '90s, it was a given that Cisco CEO John Chambers would deliver his "Are You Ready (for some football)?" speech when more than five people slowed down enough to form a crowd. But at least it was an entertaining soliloquy. Some of the other recurring speeches could be condensed into a haiku:
We add more value
To back-end infrastructures
Please talk to our reps
Nonetheless, the pronouncements collectively can provide nuggets about the future. The recent crop of presentations revealed the following:
Software continues to grow in importance
Software development, especially of applications that let information technology departments better manage their servers, is an active area. In the past 18 months, IBM has acquired seven software firms that specialize in this area, said Palmisano. Consulting and services will
"The future of computing is large clusters, small computers," said Oracle chief Ellison.
Intel is pursuing software too. The company is hiring more software engineers than hardware ones right now. "On a sheer headcount basis, software engineers are becoming increasingly important," said Barrett.
But wallets remain fairly closed
The downside of selling software that makes data centers more efficient is that no one really wants to pay for it. Rather than approve a budget in advance of a project, companies will now fund six months of work, and, if it goes well, fund six more months. "We have renegotiated a number of large contracts" down in scope, Palmisano said.
"I don't believe there is going to be a lot of utility-based pricing. Utility-based pricing isn't predictable," said Jonathan Schwartz, referring to the plans from IBM, HP and others to use clusters to sell computing capacity by the minute, as if it were a utility like electricity.
The PC upgrade cycle will have to happen
According to IBM, corporate buyers have no interest in upgrading their PCs. Unfortunately for corporations, their PCs are breaking, according to Intel. Studies show that the price of owning older PCs begins to rise after three years. "It isn't coincidental that PC warranties last three years," said Intel president Paul Otellini.
"Productivity" is the new buzzword
"Inflection point" is out, and so is "ecosystem." Companies now state that they will win by showing customers how they can improve productivity. Kudos to Palmisano for slipping "organizational productivity" into a sentence as if it were a phrase humans have used before.
Russia is a country to watch
Intel's often a bellwether for world economic events. The company was one of the first to pinpoint when Asia surpassed North America in PC sales. Now, executives increasingly mention Eastern Europe, and to a lesser degree, Latin America.
Metaphors aren't getting any better
"We are the bacon, not the egg," said McNealy, describing his company's position in data center computing.
And remember, the P in PC stands for personal
"We are promiscuous. That is what our customers want us to be," said Ellison, referring to Oracle's ability to work with a variety of operating systems.