In 1997, Larry Ellison had a vision for a new paradigm of computing which he called the Network Computer (NC). The idea was simple: a group of partners would build devices and services that leveraged the power of the Internet to compete against the growing Windows monopoly.
Ellison believed that the computer in the client/server era had evolved into too complex a machine for most tasks. With the NC, the ‘heavy’ computation of software and infrastructure would be abstracted from the actual device and delivered instead to thinner terminals via the web, thus radically simplifying access and enabling all new applications and mobility.
But the NC never made it mainstream. Microsoft and its allies had already amassed considerable power, and the cost of personal computers was dropping rapidly, making them even more attractive and ubiquitous. Furthermore, many of the applications were too immature to compete with the desktop software experience at the time; and few people, as it turned out, wanted to buy a device championed by Oracle.
The NC fell short on execution, but Ellison was right about the vision: “It’s the first step beyond personal computing, to universal computing.” In many ways, he was the first to glimpse a future resembling the post-PC world we are rapidly moving towards today.
15 years later, it is Apple that has brought its version of this vision to life. And Apple’s rising tide – already 172 million devices strong, sold in the last year alone – has in turn given rise to a massive, vibrant ecosystem: companies generating hundreds of millions and billions of dollars in value in under a few years, revolutionizing industries like gaming, social networking, entertainment and communications in the process. Then of course there’s Instagram. All proving that value created in this mobile and Post-PC world will rival traditional computing categories.
But the post-PC transformation isn’t limited to the consumer landscape. In the enterprise, we’re transitioning to a way of working that is far more fluid, boundary-less and social. And mobile pushes computing to the cloud and rewrites all applications in its wake. Those who saw it coming (Oracle) and those who initially resisted its arrival (Microsoft) have equally been taken by surprise by the power and speed of the post-PC shift within today’s enterprises, and it’s creating one of the biggest opportunities ever.
Why the change is so profound
We recently met with the IT leadership team of a fairly conservative 50,000-person organization where all the participants all had iPads. No big surprise there. But the apps they were using were radically different from what you would have found in their organization only a few years back – a mix of apps from a new set of vendors that together supplant the traditional Microsoft Office stack.
Post-PC devices are driving enterprises to rethink their entire IT architecture, thanks to a wildly unpredictable and improbable chain reaction set off by a new consumer device from Apple. For the first time in decades, CIOs have the opportunity – and necessity – to completely re-imagine and rebuild their technology strategy from the ground up. Catalyzing this change is the fact that the technology switching costs are often less than the price of maintaining existing solutions. A shipment of 1,000 new iPads requires applications to run on these devices – and choosing all-new applications and vendors is generally cheaper than the service fees, infrastructure, and operational costs of legacy software.
And thus, the Post-PC era drives the final nail in the coffin of the traditional enterprise software hegemony. Microsoft, in particular, built up a practical monopoly that lasted nearly twenty years, and forced an entire industry to conform to its way of seeing the world. Yet this arrangement served its benefactor far more than the ecosystem, as the Redmond giant built up leadership positions across nearly every application category.
In the Post-PC era, businesses will shift from deploying and managing end-to-end enterprise solutions from a single vendor, to consuming apps a la carte both as individuals and en masse. But which apps and vendors will help define this new world?
What’s coming won’t look like what came before
Change always begins incrementally at first. Predicting specifically what will happen in the next year or two is a far more realistic undertaking than anticipating where we’ll be in a decade. In shifting from one technology generation to the next, we minimize disruption by porting the old way of doing things to newer mediums or channels. Not until the new model settles in do we see the real results that rise from these foundational shifts.
Mobility is such a foundational shift, and it’s still very, very early. Even when the Microsofts and Oracles of the world relent and build applications for post-PC devices, these apps will carry much of the DNA of their desktop predecessors. We can imagine that each of the enterprise mainstays – ERP, HR management, supply chain, business intelligence, and office productivity – will be painstakingly moved to mobile. But that’s just the first phase.
Emerging CRM startups like Base will challenge longstanding assumptions about where and how you manage customer interactions. Data visualization software like Roambi will make business analytics more valuable by making it available everywhere. Entire industries are already being transformed: mobile healthcare apps will enable cutting-edge health outcomes, and construction sites will eventually be transformed by apps like PlanGrid. Companies like CloudOn and Onlive aim to virtualize applications that we never imagined would be available outside the office walls. Evernote’s 20+ million users already make it one of the most popular independent productivity software apps of all time, whose value is dramatically amplified by this revolution. In a mobile and Post-PC world, the very definition of the office suite is transformed.
And with this transformation, much of the $288B spent annually on enterprise software is up for grabs. The post-PC era is about no longer being anchored to a handful of solutions in the PC paradigm. Instead, we’re moving to a world where we mix and match best-of-breed solutions. This means more competition and choice, which means new opportunities for startups, which should mean more innovation for customers. As soon as individual workers look to the App Store for an immediate solution to their problem instead of calling IT (who in turn calls a vendor) you can tell things will never be the same.
In many ways, the enterprise software shift mirrors that of the media and cable companies fighting for relevance in a world moving to digital content (HT @hamburger). If users and enterprises can select apps that are decoupled from an entire suite, we might find they’d use a completely different set of technology, just as many consumers would only subscribe to HBO or Showtime if given the option.
Of course, every benefit brings a new and unique challenge. In a world where users bring their own devices into the workplace, connect to any network, and use a mix of apps, managing and securing business information becomes an incredibly important and incredibly challenging undertaking. Similarly, how do we get disparate companies to build apps that work together, instead of spawning more data silos? And as we move away from large purchases of suites from a single provider, what is the new business model that connects vendors with customers (both end users and IT departments) with minimal friction?
And then there’s the inherent fragmentation of devices and platforms that defines the post-PC era. Android, iOS, and Windows 7 and 8 all have different languages and frameworks, UI patterns, and marketplaces. The fate of mobile HTML5 is still indeterminate. Fragmentation and sprawl of apps and data is now the norm. And while this fragmentation is creating headaches for businesses and vendors alike, it’s also opening a window for the next generation of enterprise software leaders to emerge and redefine markets before the industry settles into this new paradigm.
It would appear that Larry Ellison’s vision for the NC was right all along, just 15 years early. Welcome to the post-PC enterprise.