Buying a PC for Your Third-World Adventure

A reader of this blog asked “What PC should I buy that can survive the erratic electricity of a third-world residency?” The answer, of course, is “It depends how much you want to spend.” But having reliable computing in a less-developed setting need not break the bank.

Assumptions

You’re an average, modern computer user with professional (i.e., office), social, and personal computing needs preparing to reside outside a first-world power grid. You could be in the mountains of Columbia or Colorado, or, like me, at the end of a one-kilometer driveway. You need to be able to use your PC at any time, but not necessarily all the time. You have a budget.

My previous stories on this subject are here. Your problem is spotty power that can come and go at any moment, day or night, and be off for hours. Your collateral problem is poor power with spikes, low and high voltage, surges, and intermittent on/off cycles. These can and will destroy the unprotected PC power supply in short order.

Strategy

The strategy is to put as much inexpensive stored electricity (i.e., batteries) in front of the computer’s power supply as practical. Duh! The easiest implementation is to use a laptop, which comes with a built-in battery. Modern laptops have hours of self-contained power while you wait for the power grid, backup generator, or tomorrow’s sun to renew your power supply.

Still easy but more expensive choices are a desktop all-in-one (such as an Apple iMac) or a regular desktop. In both the desktop cases cases, you’ll want an uninterruptible power supply (UPS) which stores AC grid power in a battery and delivers it to your electronic devices.

With those assumptions and strategy in mind, here is a prioritized list of what to buy and why to buy it:

The Basics

  • A laptop. Commercial grade (e.g., Dell XPS) has higher build quality than consumer grade (e.g., Dell Inspiron). You get what you pay for. Consider: 17″ screen-size as desktop replacement; SSD for reliability and speed. Your choice: Windows, Mac, even Chromebook.
  • A high-quality surge protector to filter as much electrical grief as possible. Mandatory unless you use a UPS.
  • A bigger and/or backup laptop battery. Greater off-grid time. More efficient than a UPS. Lowest cost when bought bundled with a new laptop.

The Upgrades

  • A powerful UPS, where power is measured in volt-amps. Over 1,000VA is better. Below 500VA is probably pointless with a laptop. The UPS has receptacles for other electrical necessities, so it becomes your electrical hub. Also, all UPS systems have power quality circuitry so your PC will always get clean power. Also, PC applications and a USB connection to the UPS can automatically and safely shut any PC down before the UPS itself exhausts its batteries.
  • A portable hard drive storage device to back up your PC. If this were me, it would rank in the Basics as a “must have”. The portable hard drives require no electrical power beyond a USB cable. With electricity (from your UPS), there are faster/greater capacity options.
  • A USB 3.0 Hub for greater I/O connectivity. Your laptop or all-in-one will never have enough USB ports for the printers, backup storage, Bluetooth speakers, and mobile devices that need charging. Your choices are four or seven ports. Go with the powered seven-port hub. After all, everyone in your house (office) will want to leech off your clean power. Plan accordingly.

The Options

Here’s where the budget goes out the window, but your level of electricity paranoia is nobody else’s business:

  • A secondary monitor scales your laptop’s screen to desktop size or becomes a second screen with more real estate.
  • Backup generator sized to your home electricity load. Best purchased locally as you will require service eventually. Requires (clean) gasoline.
  • Solar power generator requires solar panels, an AC inverter, and distribution hub. It can have its own battery for storage or use the UPS already in our specs. The money problem is a 300-400 watt solar installation can easily cost as much or more than our laptop computing device.
  • The ultimate upgrade for this scenario is a Ford C-Max Energi plug-in hybrid car with internal 7.4 kWh batteries, 2 AC power outlets, USB charging, and 12-volt power. You can also drive it. $31,770 and up.

Is a Tablet an Alternative?

A tablet or a laptop/tablet (i.e., a two-in-one) is worth considering. Portable, mobile, self-contained cellular network option. Some have a desktop operating system. The keyboard and mouse can use easily rechargeable AA batteries. Device operating life often exceeds eight hours. Rechargeable from a small solar panel. Connects to Bluetooth peripherals and to a video monitor/TV via an HDMI cable.

Minimalist computing dramatically simplifies backup power requirements.

Consolidated electronics such as a tablet connected to the LCD monitor also used as a TV makes planning easier and redundancy less necessary.

The Network

Getting on the Internet has its own set of problems and costs. You’ll need local knowledge to make cost-effective decisions.

Assuming a controllable data budget, the easiest Internet on-ramp is to use your smartphone as a hotspot and connect your laptop via Bluetooth. You won’t find unlimited data plans in the third world, so this approach needs careful usage-based planning.

A conventional desktop or laptop setup will require a network access device(s) to the cable, wireless broadband, or satellite network. Plan to power-protect these devices too by plugging them into your UPS. However, that limits PC placement to being close to the network access point.

Follow @PeterSKastner on Twitter

Note: the products linked in this blog post are not endorsed by the author. The author has no financial ties to any product mentioned in this blog post.

 

Buying a PC Online: a 2015 Saga of Customer-Service Inefficiency

In this open letter to Michael Dell, CEO at Dell.com, we relate the saga of a friend I’ll call Russ and his journey to buying a replacement PC online.

Plan A: Lenovo Chokes
Russ had an old, Lenovo one-core AMD workhorse desktop upgraded to Windows 7 awhile back. The box got slower than molasses. After all the usual speed-up remedies failed, Russ decided to buy a new desktop. We consulted as I do for (too) many friends and decided on a modest machine with a solid-state disk. Russ went online and configured-to-order in early November. Problem solved ….

But not quite. Lenovo quoted a delivery date, and when December rolled around, Russ queried when was his new PC going to be built and shipped. The answer was “We don’t know, but hold tight.” Russ replied, “Not good. Cancel the unfulfilled order.” Lenovo said, and I paraphrase, “You can’t cancel the order because we have released it to our manufacturing supply chain in China. It will arrive when it is built and shipped.” Russ called American Express and put the charge on indefinite hold in case it actually arrives some day.

Moral: 1. Don’t take an order you cannot fulfill. 2. Don’t leave a customer hanging.

Plan B: Dell Gets to Bat
With a little coaching, Russ found what he wanted at Dell.com: an Inspiron desktop without an SSD but with a decent Intel “Haswell” Core i3 processor, 4GB of memory, and a 1TB hard drive running Windows 10. Price was US$449 with free shipping. The clincher was same-day shipping.

The Unboxing: a Moment of Silence and Sadness
The new PC arrived in four days. I came over Sunday morning with assorted tech bits so we could hook up the new Inspiron and to run Microsoft’s sweet Windows Migration Tool to get it into production. Popped open the chassis, added 4GB of memory, closed the chassis, connected the cables and hit the power-on switch.

Nothing happened. Nada. The PC would not power on in spite of trying different electrical sockets and AC cables. It was a 2015 PC Dead on Arrival.

We were sad but not completely surprised as these things happen — presumably very rarely because of the Dell costs to swap a DOA machine. So, we called Dell Tech Support to get started.

Tech Support: Call Triage
It took eleven minutes to wait on hold, enter the PC service tag, explain to the tech we had a DOA machine that we wanted to swap. The information requested included the service tag, serial number, name and address, and other bits of information — all of which is already stored in Dell’s order entry system but was nevertheless verified and keystroked again into the service system.

We made it through triage and onto tech support’s call resolution team.

Tech Support: Call Resolution Team
This call took eighteen minutes, with most of the time spent on hold at the end waiting to be transferred to Sales. The business-process problem with the call resolution phase is simple: the department is a separate information silo from call triage, and no call or problem data is shared.

Russ had to literally spell out the same answers to information questions including the service tag, serial number, order name and address, and other bits of information that had already been amassed at order-taking and call-triage. Besides boring the customer to tears, the process is a poor use of tech support labor.

Reassuring us that the four-day-old PC was still under warranty, call resolution rang off to run down the DOA return process. After seven minutes, we were told that Sales handled returns and “please hold while I transfer you to that department.”

Sales Support: Waiting for Godot
And we waited some more with occasional call-tree clicks that eventually ended with a recorded message saying “Sales is closed on Sundays, so call us during business hours tomorrow.”

Customer time to non-resolution of a DOA problem: more than 30 minutes. Russ was pissed. I went home to lunch.

Luncheon Epiphany
I often skim the Sunday newspaper advertising inserts to keep track of technology mainstream deals and product positioning. For example, Intel’s Broadwell and Skylake 14nm processors only recently started being featured in PCs at BestBuy, and are still not being advertised at Wal-Mart, Target, Staples, or OfficeMax.

That’s how I found the Staples ad for a Dell Inspiron 1300 desktop with a Intel “Haswell” Core i3 processor, 8GB of memory, and a 1TB hard drive running Windows 7 Pro. Price $300, marked down from $580, and $150 less than Dell.com’s almost identical DOA PC.

I telephoned Russ, he picked the PC up that afternoon, and the migration was well underway on Monday morning. The DOA machine goes back to the Dell factory tomorrow.

Dear Michael,
I silently applauded your taking Dell private because the mature PC industry in a slowing global economy does not need a quarterly spotlight on top of all its other challenges. I expected lots of value could be wrung out of the business with greater efficiencies and focus on key business processes. Dell has been a build-to-order online specialist for, like, thirty years.

So, I was disappointed that Dell’s DOA process involved so many steps across organizational and information silos that cry out for a rethink. I hope you’ll take this missive to heart. You know what to do about this.

No, It’s Not Just Dell and Lenovo …
HP has no laurels to sit on. Even Apple has disappointed me on more than one occasion. As this saga illustrates, the PC industry can do better on customer satisfaction.

The future of personal information technology is not one-size-fits all. It’s “buy what you need and want”. That’s going to take a holistic approach to online sales and service. You would have thought that would be old-hat going into 2016, but apparently not.

Follow @peterskastner on Twitter

Dell Inspiron 3000 Desktop

IRS Loses Lois Lerner Emails

The IRS told Congress yesterday that two years of emails on Tax Exempt Organizations department manager Lois Lerner’s desktop were irretrievably lost due to a hard drive crash in 2011. As this is a technology blog, how could this event happen?

The Internal Revenue Service has 90,000 employees working in a complex financial-services organization. Like its private-sector counterparts, the IRS has a sophisticated Information Technology organization because the IRS mission is implementing the tax laws of the United States. The IRS is the epitome of a paper-pushing organization, and by 2011 paper-pushing was done by email.

1. The IRS first installed Microsoft’s enterprise email product, Exchange in the data center and Outlook on client desktops in 1998, about the same time as many Fortune 500 organizations. By 2011, the IRS had over a decade of operational experience.

2. Hard drives are the weak-link in IT installations. These mechanical devices fail at the rate of about 5% a year. With 90,000 employees, that works out to an average of 4,500 a year or 22 per work day. The IRS IT staff is very familiar with the consequences of user-PC hard drive failures. Data center storage management is another leaf in the same book.

3. The IRS reported to Congress that senior executive Lerner’s hard drive failed, and nothing could be recovered from it. It was forensically tested. As a result, the IRS claims, there is no record of the emails that were sent or received from Ms. Lerner’s computer. The thousands of emails recovered to date were extracted from sender or recipient email lists within the IRS, not from Lerner’s files. There is no record of emails to other federal departments, or to other organizations or  personal emails.

4. The implication is that the Lerner email history only resided on her computer. There is no other IT explanation.  Yet Microsoft Exchange in the data center stores copies of all email chains on multiple hard drives on multiple, synchronized email servers. That’s the way all enterprise email systems have to work. So the facts as stated make no IT sense.

But let’s look at the implications of a strategy where the Lerner email history only resided on her computer and the hard drive failed completely so nothing could be recovered:

  • Where are the Lerner PC backups? With a 5% annual failure rate, industry-wide PC backup strategies are as old as centralized email. There should be Lerner PC backups made by IRS IT. Leave it up to the user to make backups? No organization the size of the IRS allows that for all the obvious reasons that come to mind, starting with it doesn’t work in practice.
  • How could Lois Lerner do her work? The hard drive was lost and there were no PC backups. Besides losing two years worth of emails, GS-15 department head Lerner had to also lose all the data of a digital business life: calendar; contacts; personnel notes; work-in-process plans, schedules, meeting notes, reviews, budget spreadsheets, official IRS rulings.
    It is inconceivable that a modern executive could be stripped of all her business data and not face-plant within a week. Could you? Not me. Nobody has paper backup for everything anymore. Your business smartphone backs up to your PC.
  • The Exchange servers log every email coming into and going out of the IRS. Did the whole set of IRS backup tapes fail in an unreported catastrophe? That primary (but undiscovered) failure would make the routine failure of Lerner’s PC unrecoverable.

I cannot think of an acceptable reason for the unexplained yet unrecoverable loss of the data on Lerner’s PC while following the usual practices every IT organization I have worked with over decades. Which leaves only two alternatives: a much clearer explanation from IRS IT professionals of how these events could happen; or something nefarious is going on.

Follow me on Twitter @peterskastner

The author’s experience with federal email and records management began with the Ronald Reagan White House in 1982.

Email Inbox

 

 

 

 

IT Industry Hopes for Q4 Holiday Magic

I am floored by how it has come to pass that almost all of the 2013 new tech products get to market in the fourth quarter of 2013. For the most part, the other three quarters of the year were not wasted so much as not used to smooth supply and demand. What is to be done?

2013 products arrive in Q4
Here are some of the data points I used to conclude that 2013 is one backend-loaded product year:

  • Data Center: Xeon E3-1200 v3 single-socket chips based on the Haswell architecture started shipping this month. Servers follow next quarter. Xeon E5 dual-socket chips based on Ivy Bridge announced and anticipated in shipping servers in Q4. New Avoton and Rangely Atom chips for micro-servers and storage/comms are announced and anticipated in product in Q4.
  • PCs: my channel checks show 2013 Gen 4 Core (Haswell) chips in about 10% of SKUs at retail, mostly quad-core. Dual-core chips are now arriving and we’ll see lower-end Haswell notebooks and desktops arriving imminently. Apple, for instance, launched its Haswell-based 2013 iMac all-in-ones September 24th. But note the 2013 Mac Pro announced in June has not shipped and the new MacBooks are missing in action.
  • Tablets: Intel’s Bay Trail Atom chips announced in June are now shipping. They’ll be married to Android or Windows 8.1, which ships in late October. Apple’s 2013 iPad products have not been announced. Android tabs this year have mostly seen software updates, not significant hardware changes.
  • Phones: Apple’s new phones started selling this week. The 5C is last year’s product with a cost-reduced plastic case. The iPhone 5S is the hot product. Unless you stood all day in line last weekend, you’ll be getting your ordered phone …. in Q4. Intel’s Merrifield Atom chips for smartphones, announced in June have yet to be launched. I’m thinking Merrifield gets the spotlight at the early January ’14 CES show.

How did we get so backend loaded?
I don’t think an economics degree is needed to explain what has happened. The phenomenal unit growth over the past decade in personal computers, including mobility, have squarely placed the industry under the forces of global macro-economics. The recession in Europe, pull-back in emerging countries led by China, and slow growth in the USA all contribute to a sub-par macro-economic global economy. Unit volume growth rates have fallen.

The IT industry has reacted with slowed new product introductions in order to sell more of the existing products, which reduces the cost-per-unit of R&D and overhead of existing products. And increases profits.

Unfortunately, products are typically built to a forecast. The forecast for 2012-2013 was higher than reality. More product was built than planned or sold. There are warehouses full of last year’s technology.

The best laugh I’ve gotten in the past year from industry executives is to suggest that “I know a guy who knows a guy in New Jersey who could maybe arrange a warehouse fire.” After about a second of mental arithmetic, I usually get a broad smile back and a response like “Hypothetically, that would certainly be very helpful.” (Industry execs must think I routinely wear a wire.)

So, with warehouses full of product which will depreciate dramatically upon new technology announcements, the industry has said “Give us more time to unload the warehouses.”

Meanwhile, getting the new base technology out the door on schedule is harder, not easier. Semiconductor fabrication, new OS releases, new sensors and drivers, etc. all contribute to friction in the product development schedule. But flaws are unacceptable because of the replacement costs. For example, if a computing flaw is found in Apple’s new iOS 7, which shipped five days ago, Apple will have to fix the install on over 100 million devices and climbing — and deal with class action lawsuits and reputation damage; costs over $1 billion are the starting point.

In short, the industry has slowed its cadence over the past several years to the point where all the sizzle in the market with this year’s products happens at the year-end holidays. (Glad I’m not a Wall Street analyst.)

What happens next?
The warehouses will still be stuffed entering 2014. But there will be less 2012 tech on those shelves, now replaced by 2013 tech.

Marching soldiers are taught that when they get out of step, they skip once and get back in cadence.

The ideal consumer cadence for the IT industry has products shipping in Q2 and fully ramped by mid-Q3; that’s in time for the back-to-school major selling season, second only to the holidays. The data center cadence is more centered on a two-year cycle, while enterprise PC buying prefers predictability.

Consumer tech in 2014 broadly moves to a smaller process node and doubles up to quad-cores. Competitively, Intel is muscling its way into tablets and smartphones. The A7 processor in the new Apple iPhone 5S is Apple’s first shot in response. Intel will come back with 14nm Atoms in 2014, and Apple will have an A8.

Notebooks will see a full generation of innovation as Intel delivers 14nm chips that are on an efficiency path towards thresh-hold voltages — as low as possible — that deliver outstanding battery life. A variation on the same tech gets to Atom by 2014 holidays.

The biggest visible product changes will be in form-factors, as two-in-one notebooks in many designs compete with tablets in many sizes. The risk-averse product manufacturers (who own that product in the warehouses) have to innovate or die, macro-economic conditions be damned. Dell comes to mind.

On the software side, Apple’s IOS 7 looks and acts a lot more like Android than ever before. Who would have guessed that? Microsoft tries again with Windows version 8.1.

Consumer buyers will be information-hosed with more changes than they have seen in years, making decision-making harder.

Intel has been very cagy about what 2014 brings to desktops; another year with Haswell refreshers before a 2015 new architecture is entirely possible. Otherwise, traditional beige boxes are being replaced with all-in-ones and innovative small form-factor machines.

The data center is in step and a skip is unnecessary. The 2014 market battle will answer the question: what place do micro-servers have in the data center? However, there is too much server-supplier capacity chasing a more commodity datacenter. Reports have IBM selling off its server business, and Dell is going private to focus long-term.

The bright spot is that tech products of all classes seems to wear out after about 4-5 years, demanding replacement. Anyone still have an iPhone 3G?

The industry is likely to continue to dawdle its cycles until global macro-economic conditions improve and demand catches up with more of the supply. But moving the availability of products back even two months in the calendar would improve new-product flow-through by catching the back-to-school season.

Catch me on Twitter @peterskastner

warehouse-300x196

 

Google As “The Cross-Platform Apps Company”

A beta version of Google’s Chrome Browser now supports Chrome App Launcher. This opens up the Chrome Store apps to Windows, Linux, and Mac OS desktops plus Google Android and Apple iOS mobile phones and tablets. Not to mention Google’s Chrome OS. Cross-platform is good, users say, because they increasingly recognize the utility of apps and their data across the devices in their lives.

Google's Chrome App Launcher

Google’s Chrome App Launcher

Common apps running on a familiar user interface and operating system across a wide variety of hardware platforms is an idea that crops up frequently in the history of the computer industry. Unix and Windows NT come immediately to mind. Google is apparently bringing the cross-platform idea back into play.

The Chrome browser runs on Android, Windows, Linux, and Mac OS and has more recently appeared on iOS. Bookmarks, tabs, settings are synchronized in Google’s cloud including Drive storage, and available to any device at any time. Chrome apps add much more than typical browser extensions. They are real apps, albeit with cloud and local data. Docs, Sheets, and Slides are the functional equivalent of Word, Excel, and Powerpoint in the Microsoft universe, and Pages, Numbers, and Keynote in the Apple Universe.

Chrome apps plus the already cross-platform Chrome browser give Google a wider breadth of platforms than the competition. As more data and usage is moved to the cloud (e.g., Office365), the benefits will become more apparent to cloud-migration users.

Perhaps my personal journey is illustrative. Like many professional users, I’ve followed Microsoft’s Office apps for generations. But over the past decade — Vista comes to mind — I started using a Mac. And I still have PCs. However, I never invested heavily in the Apple iWork office suite, using it for mostly Microsoft-compatible import and export or, lately, to make cross-platform .pdfs of finished documents or presentations. I have expertise and a software investment in Microsoft PC office apps and have no foreseeable intention to move to Microsoft Office 365.

Since more of my consumption and production is happening on tablets and even smartphones, I’m a good candidate to drop Apple iWork and move to Google apps. These appear on the Mac desktop and launch just like Mac apps. Or Windows apps.

Moreover, the mobile apps I use from the Chrome Store are all there too: WorkFlowy, TweetDeck, QuickBooks, and Evernote. It’s not just cloud office.

Let’s leave aside the issue of whether your data is secure in the cloud. That applies to all apps everywhere, and is worth pondering another day.

Being able to run a familiar, common set of apps across all the major hardware and OS platforms and time is a valuable competitive advantage.

I don’t see the technology industry yet recognizing that Google is quietly setting up to be the only supplier that can run the same apps on any broadly used platform.

Follow me on Twitter @peterskastner. Your comments are invited.

Apple’s Q2-2013: Q4 Anticipation

I’m on the road but wanted to update you on Apple’s second quarter.  Revenue was flat and profits were down compared to last year, while iPhone sales were up, and iPad and Mac sales were down. I expect the current third quarter to be constrained by anticipation of expected product announcements in September. Then, product supply issues will be unable to fully meet Q4 holiday demand for iPhone and iPad.

It sure looks like Apple has managed to compress a year’s worth of  opportunities into three or four months. Think how much smoother things might be if product came forth across the entire twelve months of the year.

The text below was supplied by Apple PR. While I cannot vouch for its accuracy, I have no reason at all to dispute it. It’s a useful condensation of the numbers.

This afternoon Apple announced third quarter results, including record June quarter iPhone sales and our highest ever Education revenue. You can find our earnings press release here and a replay of the call with Tim Cook and Peter Oppenheimer is available here
Overall:
– Apple reported quarterly revenue of $35.3 billion and net profit of $6.9 billion, compared to $35 billion and $8.8 billion, respectively, a year ago
– Gross margin was 36.9%, compared with 42.8% in the year-ago quarter
– International sales accounted for 57% of total quarterly revenue
– Apple generated $7.8 billion in cash and has returned $18.8 billion in cash to shareholders through dividends and share repurchases
iPhone:
– Apple sold 31.2 million iPhones, up from 26 million in the year-ago quarter
– iPhone leads in customer satisfaction and loyalty, according to numerous third-party research firms, including J.D. Power & Associates, ChangeWave and Kantar
– Apple reduced iPhone inventory by 600,000 units in the quarter
– iPhone remains strong in the enterprise, and has captured 62.5% of the US commercial market, according to IDC
iPad:
– Apple sold 14.6 million iPads in the quarter, compared with 17 million in the year-ago quarter
– iPad faced a tough June comparison, as the first iPad with a Retina display was launched in the year-ago quarter and we ramped up inventory
– iPad channel inventory was reduced by 700,000 units, making sell-through down just 3% year-over-year
– iPad usage share remains incredibly high, and grew to 84.3% last month, according to Chitika
Mac:
– Apple sold 3.8 million Macs, down from 4 million in the year-ago quarter
– The updated MacBook Air line was launched at WWDC in June, making it available for just three weeks of the quarter.
– The Mac was though down 7% but again outperformed the market, which contracted 11%, according to IDC
– We look forward to the launch OS X Mavericks this fall and of the all new Mac Pro later this year
Music/Services:
– iTunes, software and services together generated $4 billion in quarterly revenue
– We now have more than 320 million iCloud accounts and 240 million Game Center accounts
– There are more than 900,000 apps in the App Store, with more than 375,000 designed specifically for iPad
– Customers have downloaded more than 50 billion apps
– Apple has paid more than $11 billion to developers, half of which was earned in the last four quarters
Education:
– Our education division experienced its highest ever quarterly revenue
– 1.1 million iPads were sold in education, and the Mac experienced strong sales as well
– Maine’s statewide education technology program saw 94% of the state’s elementary and high schools choosing Apple products
– The first phase of Los Angeles Unified School District’s plan to provide 660,000 students with a tablet was approved, resulting in an initial $30 million iPad sale
Retail:
– Apple retail stores generated $4.1 billion in revenue, about equal to a year ago
– iPhone saw strong growth in sales of our own retail stores
– MacBook Air had its most successful Retail launch to date
– We opened six new stores across five countries and now have 408 stores, 156 outside the US
Apple iPads

Apple iPads

Peak Technology or Technology Peak?

The theory of peak oil — the point at which the Earth’s oil supply begins to dwindle — was a hot and debatable topic last decade. There are lots of signs that we are at a technology demand peak. Is this permanent, or how will we get past this peak?

The last-decade argument that oil production had permanently peaked proved to be laughably incorrect. Hydraulic fracturing  (“fracking”) technology developed in the United States changed the slope of the oil production curve upwards. This analyst has no intention becoming a laughing stock by suggesting that digital technology innovation has peaked. Far from it. However, few things in nature are a straight line; it certainly appears that digital technology adoption — demand — has slowed. We are in a trough and can’t foresee the other side.

One good place to look for demand forecasts is the stock market.

Smart Phones and Tablets
Last month, both gadget profit-leaders Samsung and Apple both took hits based on slower growth forecasts. “Pretty much everyone who can afford a smartphone or tablet has one, so where does the profit growth come from?” was the story line. Good question.

This month, AT&T and T-Mobile announced they would lease customers smartphones instead of selling them outright with a carrier discount. The phones and tablets coming off lease will be re-sold into the burgeoning used gadget market. It’s now too easy to get new-enough gadget technology in the used market. After all, your last-year’s hardware can still run this year’s free, new software upgrade.

On the surface, it appears that the global market for $600 smartphones and tablets is at or close to saturation — a peak.

Desktop and Notebook PCs
The stock market is not treating traditional technology makers very well. H-P is coming back from a near-death experience. Its stock is half what it was two years ago. Dell wants to go private so it can restructure and deal with market forces that are crushing margins and profits. Even staid and predictable IBM has lost its mojo over the past five quarters. Microsoft missed.

These technology makers are dealing with PCs, the data center, and services. They are not major players in the smartphone/gadget market. Their focus is on doing what they used to do more efficiently. That strategy is not working.

The desktop and notebook PC markets are almost all replacement units in developed countries. Macro-economics has dramatically slowed emerging market growth in formerly hot places like Brazil, Russia, India, and China (BRIC). The new customers are being added more slowly and at higher costs, and existing customers have increasingly voted to not upgrade as frequently. My 2008 Apple MacBook Air, cutting edge and quite expensive at the time, is still adequate for road trips. My Sandy Bridge Generation-1 Ultrabook has adequate battery life. There’s no compelling reason, most buyers tell us, to accelerate the PC replacement cycle.

Well, one temporary accelerator is the support demise next year for Windows XP. With auditors and consultants screaming about liability issues, non-profits and government are rolling in new PCs to replace their ten-year old kit. Thank goodness. But seriously, ten-year old PCs have been getting the job done, as defined by user management.

Note also that a new PC likely means a user-training upgrade to Windows 8. Both consumers and businesses are avoiding this upgrade more or less like the plague. There is no swell of press optimism that Windows 8.1 this fall will be the trick. PC replacement is a pain already, so few want to jump on an OS generation change as well.

Data Center
The data center market shows some points of light. Public cloud data centers by the big boys like Apple, Google, Facebook, and Amazon are growing like gangbusters. High Performance Computing, where ever more complex models consume as many teraflops as one can afford to throw at the problem. Recent press reports suggest that “national security” is a growing technology consumer. [understatement]

However, enterprise data centers, driven by cautious corporate management, are growing more slowly than five years ago; this market outsizes the points of light. Moreover, the latest generation of server technology really does support more users and apps than the gear being replaced. With headcount down and fewer new enterprise apps, fewer racks are now getting the computing workload done. (Storage, of course, is growing logarithmically). We also expect a growing trend towards “open computing” servers, a trend that will suck hardware margin and services revenue from the big server-technology makers.

Navigating From the Trough
So, mobile gadgets, traditional PCs, and the data center — the three legs of the digital technology stool — are all growing more slowly than in the recent past. This is the “technology demand peak” as we see it. We are presently past the peak and into the trough.

How deep is the trough and how long will it last? LOL. If we knew that, we could comfortably retire! Really, there are roughly a couple of trillion dollars in market cap at stake here. If the digital tech market growth remains anemic beyond another twelve months, then there will be too many tech players and too few chairs when the music stops. Any market observer can see that.

Our own view is that it will take a number of technology innovations that will propel replacement demand and drive new markets. The solution is new tech, not better-faster-smaller old tech. Where’s the digital equivalent of fracking? (Actually, fracking would not be possible without a lot of newly invented, computer-based technology.)

First, the global macro-economic slowdown is likely to resolve itself positively, perhaps soon. We don’t buy the global depression arguments. There are billions of potential middle-class new computer consumers and the data center backend to support them.

Next, mobile gadgets and PCs are on the verge of exciting new user interfaces. Things like holographic 3D displays — you are in the picture, and keyboards projected on any flat surface. Conference-room projection capabilities in every smartphone. New users interfaces, shared with PCs and notebooks, that are based on perceptual computing, the (wo)man-machine interface that recognizes voice, gestures, and eye movement, for starters.

Big data and the cloud are data-center conversation pieces. But these technologies are really toddlers, at best. Data-sifting technologies like the grandson of Hadoop will enable more real-time enterprise intelligence and wisdom. HPC has limits only of money available to invest. Traditional data centers will re-plumb with faster I/O, distributed computing, and the scale-up and scale-down capacity of an electric utility — while needing less from the electrical utility.

We don’t have all the answers, but are convinced it will take an industry kick in the pants to get us towards the next peak. More of the same is not a recipe for a solution. We are in a temporary downturn, not just past peak technology.

Your thoughts and comments are welcome.

Photo Credit: Eugene Richards

Photo Credit: Eugene Richards