My recent note on The Tipping Point drew considerable comment in the blogosphere. (The seesaw picture is a cartoon from this page on the Library and Archives of Canada site.)
Much of the commenting was about the idea that Microsoft is becoming "commoditized," and some went so far as to predict China is going to undercut us by 99%.
While that's all well-and-good, and that might even be possible, I think the comments miss the point.
Yeah, you'll have to click below to get to the point.
As hardware prices plunge under those for software, the tipping point leads software to get inside hardware in order to maintain its margin.
Yeah, it sounds contradictory. Hardware prices are still falling, and software gets a lower margin inside hardware.
But that's the way it works anyway. Putting software in hardware raises the value of the hardware, and limits the erosion of Moore's Law on its pricing. Putting software in hardware practically eliminates the software vendor's problems with piracy -- since the design and software are "exchanging precious bodily fluids" one is worthless without the other.
Thus, we have a great rush toward "embedded applications," and the battle is on to see which computer operating system will be the base on which various embedded platforms are built.
Cell phones are seen as embedded platforms. So are access points.
In the World of Always-On you want a robust, modular, scalable operating system kernal in your network, so you can build applications on top of the network.
But increasingly there's little technical difference among the kernals, other than their business models. At its heart, the Windows XP kernal is fine, and may be just as good as that of BSD Linux or even GPL Linux. (If you're a programmer, you may think that last point silly, but hold that thought and put it in the comment section below.)
The point is that the tipping point has been reached. Software wants to go inside hardware. Both sides have margins to gain from the marriage. The Tipping Point brings the World of Always On closer than ever.
Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. Jonathan Peterson on February 23, 2004 09:34 AM writes...
The downside of software slipping into hardware is that the "decommoditization" of hardware may often make the hardware LESS useful. My new motorolla V300 is a pretty nice cell-phone - it has a camera, a color screen, a Java game engine, but its actual PHONE functionality isn't really any better than the Ericsson T28 that I bought 5 years ago. The new features were fun to play with for a week or so, but really have added nothing useful to the phone.
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