Revisiting Windows 8

Without much pleasure I note, in a Wall Street Journal article today (“Computer Sales in Free Fall”), that PCs remain in the doldrums—and that lots of people blame Windows 8. I held forth on that subject roughly six months ago (link) and have touched upon the essentially irrelevant war between hand-helds and desk-helds as well. It gives me no pleasure to note what are, deep down, knee-jerk and irrational reactions to markets by various once much admired leaders—like Microsoft, which brought us Windows 8 and Hewlett Packard which is still trying to dump its PC business. Hand-held devices and desktop computers are totally different products and markets. The difference might be described as that between a basket of hand tools on the one and a machine tool on the other hand. The PC market is now mature; the economy is still largely stagnant; hence, what with corporations holding off on purchases, PC sales are declining. But this decline is rooted in the economy’s performance, not in the operating system on the screen of the PCs. Replacing a quite excellent user-interface with a touchy-feely interface people in offices don’t routinely, habitually, use is simply not going to change broad market movements that have zero connection to flim-flam (link).

Here a quote from the WSJ article:

Ricoh Americas Corp., which replaces about a third of its 17,000 PCs every three years and upgrades to the most current operating system available, said this year it is sticking with Windows 7…. Tracey Rothenberger, the company’s chief operating officer, said the benefits of switching to the new software aren’t worth the effort of training employees to use it.

If our business media were innovative—rather than reacting simply to news releases—somebody would stage a trial. Pick a handful of heavy PC users in several companies—you know, the whole ball of wax: spreadsheets, databases, serious text processing like typesetting, and, in the graphics category, artists using Apples with extra-large screens for creating commercial graphics. Select tasks these people do on a certain day and note everything that they do. The next day deploy the same number of heavy iPad users to carry out the identical tasks during the same period of time. I’d love to read the story that would result from this comparison.

Is the PC really going away? I seriously doubt it. Will even the cyber industry mature, and probably quite soon? Most likely. Will the next great market be another of those where you can sell a pound of plastic, silicon, and bits of copper to hysterically-enthused consumers for $395 ever six month? Probably not. The big new markets may turn out to be quite different—and may have nothing to do with electronics.

The Self-Devourer

The image of the snake eating its own tail arose this morning as I read a story in The Wall Street Journal telling me that world-wide PC sales are slumping, down 8.3 percent from 3Q 2011 to 3Q 2012. This comes despite the fact that Microsoft is just about to launch Windows 8, an operating system that attempts to fawn on the modern customer who is supposed to love “touch technology,” thus the ability to paw the screen instead of using a mouse. WSJ recites among the reasons for what it calls a “tailspin” competition from tablets and also bad economic times, including sluggish demand in emerging economies. Both reasons are logical, but the bottom line is that the personal computer is now a mature industry; its real market is not personal but business use; and its likely future will have less to do with the growth of dollar output and more with growth in employment. The real motive for buying a computer is hiring a new employee. The image, however, of the leading edge of the computer industry, viewed generically, thus tablets and smart phones included, “cannibalizing,” as the Journal puts it, the PC market, does suggest that mythic Uroboros.

In the sense that industries mature, great success always morphs into failure. Success is measured by ever advancing annual growth rates, and in that sense the PC market has been suffering for quite a while. The very effort to keep growth growing by introducing ever more popular devices with the same functionalities, causes dismay to the older parts of the industry even as everyone celebrates Apple’s most recent triumphs. Trying to boost PC sales by giving them features almost necessary in products barely bigger than a small calculator—thus screen-pawing powers—is a form of desperation. It’s one thing to hold a phone in your left hand while your right index finger messes with the screen; quite another to reach out to a screen. From the keyboard to the screen? Sixteen inches, in my case. To the mouse, half that distance. The “touch” solution goes against established habit. But when you haven’t got any good ideas, and there is a deadline by which you must become creative, grabbing popular features from a distinctly different device is a great temptation. The same sort of desperation is present at Microsoft too, to be sure. Windows 8? Already? Windows 7 is only 28 months old, issued in July 2009. And we’re supposed to get excited?

Of Clouds, PCs, and zEC12s

Earlier this week I read about the, like, serious arrival of The Cloud in computing—meaning that someone maintains computers and memories that we just access from afar—yesterday came news of IBM’s unveiling of a new mainframe computer, zEnterprice EC 12 (zEC12). One of its uses, of course, is to host lots of lots of clouds. With that we have once more closed a circle—because what goes around, comes around. Almost as if to put a seal on that, HP stock was turning squeeshy because, in crude summary, the PC is dead.

To be sure, the PC market is still vast, but the sex-appeal is gone. PCs have turned into commodities. But we still need them to talk to The Cloud. It’s sort of analogous to saying that when we pray we pray to God, not to the prayer rug—and the PC has turned into a mere rug.

Meanwhile I had begun to fear for the future of the Smartphone. Now that these little smaller-than-your big ham palm devices have more power than my HP Pavilion 6647c PC, smartphones have nowhere to go. Here comes zEC12 to give them a new challenge. “Miniaturize me!” says the zEC12 proudly—“do that and you’ll be a real telephone.”

The name of my computer, by the way, does sound rather grand: HP Pavilion on and on and on PC. Reminds me of aristocracies that have come down in stature—some Russian Princess living in penury in Paris handing out towels at up-scale public toilets. I am sad for you, dear Pavilion; but the lineage of nobility is still visible on your careworn features—while in the small, sturdy, abstract black cabinet of the zEC12 I detect its lineage too—the great monsters that used to take up most of a floor in office buildings.

Yes. What goes around. One of these days even the humble abacus will be back in place of honor, but that might take a little longer.

There Goes HP

Hewlett-Packard, the largest producer of PCs (17.5% share), plans to spin off its PC business. The company sold 14.9 million PCs last quarter, but evidently that’s not good enough. The PC sector has seen declining sales as tablets are attracting the consumer. With faltering growth, the PC business is suddenly worthless in the eyes of mega-corporations that only look at growth as a meaningful economic measure. Amusingly, HP has also given up on tablets. It introduced the TouchPad in July—and had already killed it off in August.

What do we call this sort of behavior? Having been tutored by that great historian of economic life Fernand Braudel (Civilization and Capitalism), we call it capitalism around here. Capitalism, far from the source of our collective well-being, is an organized form of indifferent selfishness and hard-eyed exploitation; its tendency is evil.

HP has a full-page ad in the NYT this morning, no doubt elsewhere too. In an almost insulting way (insulting to the ordinary intelligence), it attempts to present its proposed spin-off of PCs as an entrepreneurial move (rather than the shedding of a low-growth but huge business) and tries to spin this move into the suggestion that “now, more than ever, we are committed to the future of personal computing.” How can you be committed to a business by putting it on the block? I divorce you. I divorce you. I divorce you. Now, more than ever, I love you. Baloney, HP.

They’re supposed to be so sophisticated, all these mega-mega-wealthy useless exploiters. But the rest of the world isn’t crazy. It is just quiet as it gradually takes over.