Thursday, May 27, 2010

Revenge of the Mainframe

My first exposure to computers (aptly named at the time) was to a Dec PDP-10 36-bit machine with punch card. Processors were so expensive than my university owned 2 of them, everyone had to share. Storage was expensive, so you kept your programs on punch cards, your data on mag-tapes.

A few years later, timesharing was allowed, and all your programs and data was stored on the mainframe accessed remotely by dumb terminals some terminals were converted printed, others displayed 80x25 characters on a black and white screen (I remember lusting after a Heathkit H-19 with an external 300 baud modem), other had built in graphics capabilities such as the RamTek terminals.

Still all connected over slow RS232 serial links, limiting what can be done. That was 1979.

Then in 1981 IBM introduced the IBM PC 5150 and things changed for a couple of decades. The personal computer ushered in the era of disconnected computing, data & programs resided in a little beige box in your den.

By 1999, the internet had connected most of these machines into a global network usurping the then dominant client-server metaphor.

So here we are a decade later and a new model is about to take hold, a model quite similar to my original PDP-10 experience: Cloud Computing.

Data (now called “content”) and programs (now called “Services) reside in the Internet “Cloud” accessible via a broadband connection from anywhere in the world using a multitude of devices. Granted these devices are smarter, more colorful, and easier to use than their predecessor, but the fact remains: the Cloud, is the biggest mainframe ever made, it’s just happens to be made of a number of smaller components called servers.

The cloud is the ultimate virtualization of computing: it, in effect, commoditizes not only processor, programming languages, storage, but content as well.

In the next installment I will examine the impact this will have on the existing technology landscape and how it’s changing corporate value propositions.

Thursday, May 13, 2010

Where is Greece?

A lot has transpired since my February demographics blog. A few readers have asked: Where does Greece fall on the chart? Well... Right there.

I also said that the move away from the welfare state is not a question of "if", but of "when".

I think we have our answer. Nuff said.

Wednesday, May 12, 2010

Three Ways Out

In a great article entitled “The Case for Economic Doom and Gloom”, John B. Judis argues that the reason for the present malaise in the world economic order is due to, as he puts it, the “global overcapacity in tradable goods production”. In making his argument Mr. Judis focuses on the production side of the equation: as more countries develop, they put on the market additional production capacity that must compete with existing capacity. Driving down prices, lowering profits and hence investments. Capital in search of good returns then flows to real estate or government bonds and feed an unsustainable Keynesian cycle.

Though I’m in overall agreement with this model and its underlying dynamics, I think he is a ignoring the second part of the equation: Demographics. As Western populations age, their consumption patterns slows, further aggravating the overcapacity problem.

There are only three ways outs (in decreasing rosiness) that I can see:

  1. Technological breakthrough: As the microprocessor drove the Reagan recovery and the Internet Clinton’s, a new technological breakthrough will drive productivity and consumption and restore growth.
  2. Rise of Asian Consumerism: Aging Western consumers are replaced by younger Asian and African ones driving up the demand curve and restoring growth
  3. World War III: a major world war manages to destroy significant production capacity all around the world. (This is not an unlikely scenario: as the Great Depression gave rise to Fascism and Communism, a prolonged economic downturn coupled with Islamic Jihadist can yield the same result)

None of these scenarios bode well for environmentalist: it is clear that, as a race, we need to expand or wither. We Simply cannot stand still.

For the sake of everyone, I'm rooting for #1.