Do PCs Matter?

In 2003, Nicholas Carr dropped a bombshell on the technology industry with the simple question: Does IT Matter.  The thesis of his original Harvard Business Review essay was that the power and pervasiveness of IT functions was transitioning from "strategic resources" to "commodity." And furthermore that IT capability no longer was a factor that set a company apart.  Now, IT is simply a cost of doing business, like heat, electricity, and doughnuts.

It was a provocative argument that hit a nerve in the industry, and one that I've come to reconsider recently in the light of declining PC sales.  While some believe that an ongoing decline in PC sales is owing to largely economic forces, I would argue that the economy is disguising a deeper problem in the PC industry.  I believe that the fundamental value proposition of a PC is being undermined by advances in virtualization and cloud computing, combined with consumer and enterprise backlash at costly PC replacement cycles.

Carr's original essay doesn't use the term 'cloud computing' but his remarks on leading technology vendors "trying to position themselves as IT utilities" are in the same spirit.  Nor does he refer to virtualization technology, but I believe that virtualization is the means by which legitimate cloud computing is becoming practical, and why it is inevitable.

There are three factors at play in this inevitable march toward a virtual client: the decoupling of power and proximity, advances in PC replacements, and a growing recognition - galvanized by a troubled economy - of the hidden costs of PCs.

Just as early manufacturers gained a strategic advantage by building plants in close proximity to power sources, as Carr points out, so too did PC processing power.  As the PC market hits its stride, business and home users alike suddenly had undreamed-of processing power in their hands.  As a result, innovation, creativity and productivity all increased.  But just as the move to transmission and distribution of electrical power undermined the strategic advantage of plant proximity to power sources, the rise of the Internet has been slowly but surely undermining the business and personal benefits of local processing.  Today's user, both personal and professional, makes use of countless applications and Web services; to the point that the processing power of a PC is undermined by its own local storage -the hard disk.  The best operational day with your PC is the day you first use it, and as you add all those local applications, it slows, becoming less reliable.  Once you drive a PC off the lot, so to speak, the business value of the hardware takes a free fall.