New Leaders in PC Market Indicate Changing Role of Cloud Computing

ChannelWeb, a news source for technology resellers, is reporting that Acer has passed Dell as the #2 maker of notebooks.

Why does this matter? The shift is due to Acer's sale of netbooks.

This shift is a further indication that individuals and SMBs are comfortable with web-based, SaaS, and other cloud-based solutions. Netbooks are designed to optimize performance for web-based applications rather than locally-installed software.

Chicken & Egg: Netbooks and Cloud Computing

In his blog, Stop Buying Servers, David Schrag agrees with TechRepublic's Jason Hiner's view that NetBooks are driving users to cloud computing.

I have a slightly different take

Netbooks are not driving users to Cloud Computing. Rather, the growth in Cloud Computing options makes netbooks more feasible.

Low and mid-range netbooks, those under the $600, are not for the power users. Screens and keyboards are too small and the processors lack "umph". They do, however, meet the needs of many users, and not just road warriors. High-end netbooks, with larger (up to 15") screen sizes and more local storage, overcome some of these limitations and still provide savings of 30% to 60% over traditional notebooks.

Netbooks would fail in the market unless users can lighten their application load. Cloud Computing, and the growth of Software-as-a-Services solutions, lets users move some of the heavy processing and storage load off the local system.

The range of applications and services available in the cloud gives users access to capabilities without the hundreds or even tens of gigabytes often used by locally installed applications. Similarly, cloud computing puts the processing burden on the service, leveraging local resources for the user interface and communications.

Yes, cost is a factor. We see the true driver towards netbooks being their ability to let organizations match the true needs of the users to the most cost-effective solution.

10 Things Steve Ballmer (and Microsoft) is Thinking About

As reported by ChannelWeb, Steve Ballmer touched on many issues at Microsoft's Strategic Update Meeting in New York last week. Here is my take after reading the quotes:

1. SEARCH: Microsoft is not making money from Search and may be slowing its rate of investment
2. Microsoft is threatened by netbooks and is considering how to adjust its Windows 7 strategy to avoid loosing market share to Linux and other OS's
3. Google, with Android, and Linux threaten Microsoft's client operating system dominance
4. Microsoft denies they are creating a smartphone, but have they really accepted the "market mojo" of the iPhone and Blackberry?
5. Microsoft knows they need a lower cost server operating system -- watch for Foundation Server
6. Microsoft still sees pirated versions of Windows as the biggest threat to their OS business
7. Microsoft IE is losing market share: Ballmer admitted that "Browsers are key features of operating systems", in contrast to their answer to anti-trust concerns that IE is not part of the OS
8. Microsoft wants to R&D itself through the current economic times
9. Microsoft has not figured out how to make money with Office Live, yet; Windows Azure (server in the cloud) may be ready by November 2009
10. OpenOffice is a growing threat, starting with the educational market

In all of his comments, Ballmer seems to be missing the gap between the features Microsoft deliver and the subset of those features most customers actually use. If the threats he acknowledges offer simpler feature sets, but meet most customers' needs, Microsoft could be in big trouble.