Something for nothing? Not anymore
February 5, 2001
The technology industry may be a constantly evolving field, but it’s set to see some radical changes in the near future. Last year, PC manufacturers were at each others’ throats, slimming their profit margins down as consumer demand fell. Profit warnings for last quarter’s performance became commonplace. Dot-com companies dropped like bugs in the Iowa winter after their investors realized that a company that sells dog food online or provides free Internet service is never destined for greatness. The effects of the industry shakedown are still lingering after five weeks into 2001.Napster is set to introduce a fee-based subscription service and is courting record companies to enter its partnership with BMG. After years of free Internet, Juno Online Services will soon unveil a new SETI-esque project to harness their subscriber’s spare clock cycles and sell them to scientists to accommodate decreasing advertising revenue and dwindling cash reserves.The something-for-nothing business model, an aberration of capitalism to begin with, is finally wheezing its last breath. Even Microsoft is phasing out their $400 Instant Rebate for subscribing to MSN Internet services.So what’s next? How will the technology industry continue to expand and make money after they realized that the 933 megahertz PIII machine they sold Aunt Beatrice will last her for many years to come? Well, there’s no magical answer. Everyone’s got their own take on how to profit in the new millennium. Here’s the scoop, according to my covert operatives in the field. Apple Computer, Inc., got smacked up pretty bad last year. It’s to be expected, since everyone in the field took a dive for last quarter and Apple didn’t really introduce any new products last year other than the hip-but-overpriced G4 Cube. Despite a huge effort on behalf of my family to help them out (until recently, we owned their whole product line — an iMac, iBook, Powerbook and G4 tower), the maker of the world’s sweetest computers lost $200 million last quarter. This year, Apple is coming back in a big way with faster, sleeker machines, standard CD-writing capabilities bundled with proprietary-burning software, a super-slick, 1-inch-thick titanium-housed Powerbook, and their next generation operating system, Mac OS X, which I have been waiting for since before I could drive. It’s all part of their “digital hub” strategy, where Macs will become the de facto tool for managing all your consumer electronics — recording music, editing movies and editing photos.Microsoft’s strategy is a bit more audacious. If you’ve been reading anything about Microsoft recently, besides their legal troubles and Bill Gate’s highly appreciated philanthropic efforts, their upcoming strategy is called Microsoft.NET. I’m still fuzzy with the details on what it encompasses, but according to one of their white papers, “The fundamental idea behind Microsoft .NET is that the focus is shifting from individual Web sites or devices connected to the Internet, to constellations of computers, devices and services that work together to deliver broader, richer solutions. People will have control over how, when and what information is delivered to them.” That’s kind of a nebulous description, but it does sound promising. In the consumer arena, Bill Gates teamed up with The Rock to unveil Microsoft’s Xbox console at the Consumer Electronics Show in Las Vegas. If you haven’t seen the console, it looks like a fat, ugly version of a PS2, with a big green jewel in the center. While it lacks originality in appearance, Microsoft has the funds and developers to create a PC-gaming killer, since its graphical capabilities dwarf most PCs for significantly less money. Linux is making major gains into pre-loaded systems and is becoming increasing adopted by major computer manufactures. IBM recently announced at LinuxWorld Conference and Expo 2001 that, “Linux is for real and Linux is ready for real business.” Dell’s PowerEdge servers, Compaq Alpha-based machines and handheld iPAQ units all touted ultra-fast flavors of Linux. Whether the OS’s mascot, Tux the Penguin, can bring Linux to the masses remains to be seen, but anything has to be better than that armpit of an OS, Windows CE.The computer industry, led by Apple, Microsoft and Tux, are transforming the way people interact with their computers. Whether the future of technology lies in Apple’s “digital hub,” Microsoft’s interconnected “constellations” or Linux’s promise of dependable, infinitely customizable, open source software remains to be seen. Others, like 3Com, are betting on Internet appliances to be the answer, with their four-pound, touch-screen Audrey, powered by QNX OS, and Kerbango, a stand-alone Internet radio appliance that streams Net radio stations (but currently requires an Ethernet connection). One thing is certain, though. If computers continue to sell super-fast desktop machines for scant profit margins, they shouldn’t expect Aunt Gertrude to upgrade every year. She really only needs one Quake III Team Arena server.Sam Wong is a sophomore in electrical engineering from Ames.