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Friday, November 26, 2004David Kirkpatrick , writes in Fortune that the Technology Industry Is In Turmoil. Excerpts from this interesting article:
Microsoft and Sun face open source, Intel seems weakened, outsourcing threatens services players—these are just a few of the recent shifts in the firmament.
The technology business is in a state of turmoil that was unimaginable just a couple of years ago. Industry icons are under threat, market leaders are at risk, and the whole pantheon of tech greats seems to be under renovation. Microsoft is struggling to justify its business model in the face of an open-source onslaught. The newly released open source Firefox shows continued signs of taking market share from Microsoft in the critical browser business - potentially the software giant's most valuable chokepoint. Firefox gained another couple points of market share just in the last few weeks—giving it something like 8% to 9% of the total market. Intel, the other duopoly partner at the top of the industry, also seems suddenly weakened. AMD stock has risen about 70% since it was published. Dell CEO Kevin Rollins has made unprecedentedly friendly remarks about the possibility the PC-maker may soon use AMD chips. And by inking a deal with giant chip-fabricator Chartered Semiconductor Manufacturing, AMD has ensured it will have enough of its impressive new 64-bit chips for almost any conceivable burst of demand. AMD has surged exactly as Intel has stumbled.
Then look at Sun—it wasn't long ago that everyone assumed the company was toast. Now nobody seems sure either way. What does it mean that Sun is making its crown jewel, the Solaris operating system, open source? It could certainly make governments in the ever-more-important developing countries more amenable to using the software. They love Linux because they can see exactly what they're getting. Now with Solaris, they can get the same thing with an industrial-strength operating system. And Sun, which was a proprietary hardware company only yesterday it seems, is now one of AMD's most important allies. To complicate matters further, there's that fascinating and yet-unexplained Sun-Microsoft alliance.
Then over in the enterprise software business, dogged little Salesforce.com continues to define an entirely new approach to using technology—so customers can merely think of what they're getting as functionality. Who cares if it's called software or not? Scores of other companies are more quietly proving the same thing.. But it's all bad news for the incumbents—Siebel, PeopleSoft, Oracle, and yes, even SAP. It lends additional surreality to the endless saga of PeopleSoft-Oracle. In services, the new globalized business model pursued by companies like Infosys pose gigantic threats to incumbent services players, particularly those that aren't sufficiently diversified, like Cap Gemini, Ernst & Young, EDS, and Accenture. As Infosys CEO Nandan Nilekani asks, how will these players compete in a world where their customers have the option of vastly lower prices for comparable services from Indian companies? How quickly can they shift their own employee base to the lower-cost model?
Sure, some long-time industry stars are unmoved, or even higher in the sky. Dell, for instance. Cisco, for another, even though smaller rivals Juniper and Huawei both look feisty. There's enough business in networking for everyone,perhaps. And IBM seems to be weathering the shifts fairly deftly, considering its vast scale. In many ways the changes we're seeing across the industry conform to one of the bedrock early assumptions of the Internet age—that power would flow from the big to the small. Tthe giants, can't be written off though. These companies have survived amazing trials before.The HighTech industry looking interesting!
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