If anyone wondered if tech was undergoing dramatic change, then this week should remove all doubt. The nature of the tech industry is going through a series of changes that are re-imagining tech, what it is, how its purchased etc.
This week’s actions by Google and HP mark two significant steps in re-imagining the tech industry. They are noteworthy not only in their own right, but also more importantly in how they span traditional boundaries within tech.
- Google’s proposed acquisition of Motorola Solutionsmeans that a software company gains a significant hardware component.
- HP’s decision to spin out PC’s markets a major divestiture of a hardware company in an attempt to concentrate on software and services.
Many will debate the merits of these moves as well as other major moves happening at CISCO and others.
These moves are noteworthy because they do not represent an industry consolidation so much as they represent an industry transformation. Transformation happens when you shed parts of a business either via a spin out like IBM or via shutting down a line of business HP in tablets and CISCO in FLIP. This is markedly different than consolidation or restructuring.
So what is going on?
Here is an idea.
Google and HP’s actions are testing two different market hypothesis of what it means to be tech.
Each is adopting market hypothesis at opposite ends of the tech market spectrum. They are also following two other firms that are already at these ends IBM and Apple.
Google is testing Apple’s tight/loose market hypothesis. The hypothesis is that tight control of the hardware and loose control of the application software is the recipe for a successful customer experience with a steady stream of open innovation. For years this hypothesis was out of favor hypothesis as being tech meant being corporate — i.e. WIN/TEL. Apple looked like a consumer novelty.
Clearly another player pursuing this hypothesis represents a re-imagination of what it means to be tech, beyond consumerization.
HP had already adopted much of IBM’s services based hypothesis, now with its proposed spin out of the PC industry. HP is going full bore on the commercial services market hypothesis, seeking to buy Autonomy and shedding its table offering according to the WSJ article .
I cannot say who or how these moves will fare, because I do not know. I do know that there will be official first takes and other Gartner Research on these subjects that will represent Gartner’s official position. See Gartner.com for details.
All I want to point out is that these moves, all in one week, represent something more than companies consolidating.
The fact that all of this is happening in a weak of unprecedented stock market volatility tells me that everyone was waiting for the right moment/price to pull the trigger on these industry reshaping changes.
More to come? who knows but it would not surprise me as these actions open the door for others to re-imagine what it means to be tech.
There are now two camps at opposite ends of what it means to be tech. One views tech from the consumer’s perspective (Apple, Google, Facebook, etc.) the other from the corporate perspective (IBM, HP, LinkedIn, etc.)
There is more than enough room for two ways of looking at the market, the question is not how these companies see themselves, but rather how you will view their appeal to your needs as an organization and as an individual.
Welcome your opinions and thoughts, remember this post reflects the thoughts of the author and not Gartner or official Gartner Research.
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