Putting IT feuds to bed

Ailing PC and server markets are forcing once powerful competitors to bury the hatchet and tackle an increasingly opaque future.

The painful readjustments in the personal computing and server markets are forcing once powerful competitors to bury the hatchet, as industry giants put animosities and feuds to bed.

Samsung’s exit from selling desktop computers illustrates how quickly the PC industry is collapsing, and that in turn, underscores Michael Dell’s urgency in his attempts to take Dell Computer private along with the spectacle of once hostile competitors like Oracle and Microsoft embracing each other.

Earlier this week, Microsoft Australia hosted a briefing at their North Ryde office to show what the company is doing with their Azure cloud computing service, which is part of the company’s quest to find revenues in the post-PC world.

Microsoft is keen to show that it’s moving quickly to adapt to the new marketplace. This week in Madrid, the company hosted its European TechEd conference where it showed off its Cloud First design principles of software, built around online services rather than servers and desktop PCs.

One important part of Microsoft’s cloud strategy is establishing pairs of data centres around the world to provide continuity to the various zones, including China, and around the world. Each individual centre is at least 400 miles apart from its twin to avoid interruptions from natural disasters.

Interestingly, this strategy is quite different from how Amazon offers its data services where customers can choose the zones and level of redundancy they want.

There’s no real reason to think any of these different philosophies are flawed, it’s primarily a difference in implementation and each brings its own advantages and downsides.

Betting on the right horse

While Microsoft is showing off its new direction, HP CEO Meg Whitman was in Beijing proclaiming that “HP is here to stay” and laying out the company’s path to survival in the post-PC world.

Like Microsoft, HP is putting bets on cloud computing and China. Whitman emphasised the work she’s been doing engaging with Chinese companies while promising “a new style of IT” and that “HP is in China for China.”

A key difference to Microsoft and Dell is that HP is doubling down on its desktop and server businesses with a focus on selling into the Chinese market. This is a high risk move given China’s investment into high speed networks and the global nature of the cloud computing movement

One of the boasts of Whitman and her management team is that HP have added a thousand Chinese channel partners over the last twelve months. This is an effort to replicate Microsoft’s market strength in mature markets which has given the software giant breathing space against strong, cashed up competitors like Google and Apple.

Whether this works for HP in China remains to be seen, in the meantime, Microsoft are trying to move their huge channel partner community onto the cloud with various offerings that give integrators who’ve traditionally made money selling servers and desktops some opportunity to sell online services.

A selling point for Microsoft‘s deal with Oracle is that it will offer Oracle databases on their Azure platform. The ending of animosities between Microsoft and Oracle is an illustration of just how the collapse in the PC and server markets is forcing market giants to build new alliances.

With the server and personal computing markets being turned upside down, expect more unthinkable alliances and pivoting corporations, as the once untouchable heavyweights realise the threats facing them.

This article was first published on Decoding the new economy. Republished with permission 

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