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Gerstner heralds post-PC, network driven era

Gerstner heralds post-PC, network driven era

The information technology industry "is in the middle of an historic change" the likes of which occur only every 20 years or so, IBM chief Louis Gerstner said last week, heralding the "post-PC era" as a time of opportunities and challenges.

Gerstner, chairman and chief executive officer of IBM, delivered the keynote talk to some 4000 of his company's global business partners - resellers, systems integrators and other channel partners - gathered here for the annual Business Partner Executive Conference (BPEC). He also issued a plea: "Please don't run out here saying, 'Gerstner said the PC is dead'.

"The PC isn't going to be any deader than the mainframe," Gerstner said, perhaps unintentionally drawing snickers and titters from the large audience.

According to Gerstner, while the PC is not even truly ailing, it is undergoing transformation and will, in the "new economy" he and other industry leaders often speak of, no longer be the focus of business, supplanted instead by appliances capable of providing users with Internet connectivity.

"In just a few years, these devices are going to outnumber PCs," Gerstner said, adding that Internet appliances will likely have more staying power than PCs.

The new economy is largely driven by networks, Gerstner said. And because this is an IBM conference at which IBM executives are, in part, touting the wonders of Big Blue to global business partners, Gerstner played up his company's foresight in looking ahead to the brave new networked world.

While several years ago most other companies and industry observers considered the Internet as an information vehicle, IBM was talking about the changes in business models that the Internet would bring. The IBM vision "sounded downright uncool at the time", Gerstner said.

IBM's oracles predicted that the networked world would change the way all manner of business is conducted. The methods of teaching children and providing health care would also be altered. And for those who have forgotten or always wondered about IBM's buzzword for this revolution in networked business, Gerstner explained, "that point of view was so lonely, we had to create a new vocabulary for it - e-business".

Increasingly, information will be stored on servers rather than PCs, and part of the message being sent at BPEC is that IBM is ready for that, with World Wide Web-based applications across product lines.

Gerstner emphasised that the services market has now reached $US1 trillion, but the number of vendors is so huge that IBM leads with just 9 per cent of the market share. He relayed that tidbit during the "report card" section of his presentation in which he also said that IBM plans to make $25 billion available to business partners for capital investment this year.

And for good reason. In 1993, not more than 12 per cent of IBM's total revenue was driven by business partners and their work, and that figure would have been much lower if PCs hadn't been part of the total. Last year, 35 per cent of IBM's business was driven by partners.

All is not rosy, though. Gerstner has been out and about here talking to business partners and during his speech he specifically pinpointed areas of concern and named the executives in charge.

Gerstner noted that business partners in Canada say that they aren't given as many leads from IBM as are partners in the US - a comment that drew a lot of head nodding in a section of Canadian business partners. And overall, Gerstner said, business partners want to hear IBM provide greater clarity to its server marketing positions - a comment that drew head nodding all over the crowd.

"We've got to be candid with each other," said Gerstner, whose first BPEC was in 1994, just 10 months after he took over the seriously troubled company. That conference was held at the Opryland theme park in Nashville and Gerstner said there would have been serious betting back then as to whether IBM would survive the financially ailing theme park.

"For the record," Gerstner said, "we're still here and they closed the theme park last year."

So, if there was a central theme to Gerstner's talk, this was it: "We're not just interested in a good game about partnerships, we're in this business to win."


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