June 3, 2010

The evolution of computing

Last week I attended an industry event attended by many of the computing industry's heavy hitters. Among the many notable speakers was one who made a significant impression on me because his topic undeniably spoke to the changes that have happened and continue still, shaping the industry and the way we do business.

The key takeaway from the presentation revolved around the evolution of computing from the 1990s into the new millennium and up through and after 2010. The role of hardware and software has continuously evolved over time, and it has forever changed the way we manage the supply chain for enterprise computing.

To review history: Through the 1990s and into the early 2000s, most enterprise computing was vertically scaled, with expensive individual computers containing heavily specialized hardware running very proprietary computing environments. A by-product of this situation was that manufacturers had to run almost completely different supply chains for the enterprise versus the non-enterprise products, simply because the two platforms didn't have much in common. They weren't ever meant to share hardware or applications.

During this time the hardware itself was a differentiator — it was so unique that it was what made the enterprise special. But the challenge came in that the enterprise environment was usually very expensive to implement and maintain compared to the desktop environment.

Due to the uniqueness of enterprise products, manufacturers typically built higher volumes of non-enterprise products, which were more cookie-cutter in design and therefore less expensive. However, the heavy cost burden was on the enterprise side.

This meant that computer manufacturers had virtually no leverage through volume in the enterprise computing environment, because the materials lists were so different and the volumes so small. On the other hand, the non-enterprise products shared many components, allowing the computer manufacturers to negotiate volume rates.

Over the course of the past two decades there's been an increase in server farms, with the term "cloud computing" evolving to represent this. While in the 1990s hardware was the differentiator and a single enterprise computer running a specialized operation was the norm, the enabler for cloud computing now heavily rests with software as a strategic differentiator.

Today, enterprise computing has evolved to a collection of low-cost computers running a range of highly available software that is sold or allocated in portions — the current state of cloud computing. This industry trend offers an opportunity for computer manufacturers and service providers to implement lean planning and to optimize overall supply chain practices.

When you think about it, software technology and edge-of-the-network routing intelligence have come a long way to enable concepts like the cloud computing model. With this new environment in place, manufacturers have the option of cross-using the same set of parts that can be borrowed from lower-end products. Maximizing part sharing is an opportunity to build traditionally non-enterprise components into enterprise footprints.

Since the application layer has become a greater differentiating factor between enterprise and non-enterprise hardware, the underlying hardware platform is simplified and its components can be interchanged across multiple platforms. In turn, this strategic shift implies the merging of enterprise and non-enterprise supply chain management processes.

In short, the evolution of computing has led us to the present day, when hardware is becoming shared more and more across platforms. This translates into cost savings in both forward and reverse supply chains. Speaking specifically to service spares for this new footprint, this model helps to increase efficiencies by lowering inventory and operating costs. It also allows supply-chain managers to leverage their non-enterprise volume muscle to support enterprise platforms.

Along with R&D efforts currently under way furthering software development progress, we predict this trend of sharing parts between desktop and server to continue all the way through edge-of-network and infrastructure devices.

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