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May 23, 2012

Why Big Data Means Reinventing Invention

This is the era of software, of applications, of marvelous code that snaps up bits from locations once-undreamed of and pops them into puzzles that people never thought possible.


Core to this era are, quite naturally, the diverse machines required to execute the new breed of instructions.


And while there will always be hardware required to execute code, large IT companies that place machines at the very pinnacle of their business could be poised for an uphill battle if they don't continue to adapt and evolve out of their hardware shells—be that through acquisition or good old fashioned innovation.


But adapt how? Turn x86 on its head, convince consumers that the PC is the only way the web can truly be useful, strive to be the first to put quantum computers in the hands of every man woman and child?


There is no fighting IT's own special sort of natural selection, which has dictated death to a number of outmoded ways of information consumption and delivery on the hardware front.


Because this is also the era of big data—an era that might find a more descriptive name or get folded into the next big trend in IT—but an epoch of its own nonetheless. And for the hardware giants, at least on the commercial and mid-range server fronts, this means that steadily running that same race for the best (subjective), most affordable (too close to count) and performance-conscious (application-dependent) computers won't be enough; it will require the edge of software prowess, the ability to meet enterprises with their dual needs on both the hardware and software sides of the spectrum.


Fair enough—there's nothing new about this concept. But if its not playing out with major companies, including HP, which today announced broad cuts to its global workforce to the tune of upwards of 30,000 people if early reports are correct.


This is a major blow for HP--this news marks a record-number round of cuts in the company's 73-year history. Its competitor, Dell, isn't exactly sticking out its tongue and dancing on the what appears to be the first shovelful of of grave dirt this quarter, either. Today, the company released a sour Q1 story, shortchanging estimates of the same tentative stability granted to other major technology companies, including Microsoft.


When it comes to companies like HP and Dell, which draw much of their business from traditional PC and related hardware (printers and other consumer devices, for instance) markets, the arrival of the iPad and overall tablet market have not been the boost the companies once thought. People just aren't buying desktop systems like they used to and further, if they opt for a tablet or even notebook, their options go far beyond Dell and HP to touch a much more diverse, specialized group of consumer hardware vendors.


But one can make the argument that this only a small (and shrinking) part of the story. As they look ahead, the real money is going to shift into some radical new consumer device that Apple can't make cooler and smaller companies can't make cheaper and better...and that shift will land them in the just-as-competitive enterprise market.


Server sales will thrive for the next decade. No one really doubts that. And if nothing else, big customers need one heck of a lot of servers to power those cloud data centers if nothing else. But as more small and medium-sized businesses look to outsource their computing with Amazon, Rackspace and the host of other cloud service providers, the server market could change—maybe not enough to cause a fresh round of 20k-plus layoffs—but a slow peeling away at a business that once appeared indestructible.


So, what is left? Well, businesses are looking to a new host of solutions that can let them make use of the ridiculous amounts of data they can now all-too-easily collect and store. And while there are plenty of independent software companies out there with tailored solutions to help them crunch, visualize and report on that data, there is little cohesion to that market right now.


What's the argument then, for a struggling consumer hardware market and an enterprise computing market that's just getting ready to pop with new needs based on data and requirements for evermore advanced software tools to comb through data? Yes. Acquire. Innovate.


HP has tried its hand at culling the burgeoning big data market both internally and through acqusitions, including its Vertica buy. But some might argue that it hasn't jumped on those opportunities and what they could mean for a big data market that's expected to hit the billion-dollar point in the next few years. If it wants to avoid new layoffs, it (not to mention Dell—and on a different note given their lack of hardware, Microsoft) it needs to cling tenaciously to all it can on the consumer and server sides, but look inward to the gaggle of talented folks who could send the phoenix, still on fire, a little above the ashes (which to continue the metaphor, are just the charred remains of so many PCs).


Is the argument that big data can rescue the monoliths—the HP, Dell and Microsofts of the world? Yes. Yes, it is.


Is there any certainty that the big data rush and code alone are enough to drive the current scale of their global operations and all they employ? No. Not at all.


But here's the big question—is it possible that hardware giants on both the enterprise and consumer fronts can reinvent themselves with an eye on the approaching dawn of big data and its blinding light of new application types and their associated business value? Yes, indeed.


For a company that tacks the word “invent” onto its branding to continue grappling with a consumer base that is no longer interested in PCs, fancy new printers (not to mention business users who are tired of running their own IT shops, opting instead for the hosted variety) HP has a lot of work to do. If it can take Vertica and its in-house talent, snap up some data visualization, management, NoSQL and other companies, it has all the necessary ingredients to cook up a viable business model again. Same goes for Dell.


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