As cheery and personable as I am, I’m not a pumpkin/turkey/mistletoe/holly kind of guy. I like family and friends just fine; I just wish I could move the holidays to July. Nothing happens in July — I might as well write about the dust under my keyboard. In the last three months of the year, however, I could fill four columns a week. Vendors go nuts trying to end the year with a stockholder-deafening bang, and IT pours its spend-it-or-lose-it dollars into the marketplace.
Intel and Microsoft always bloom this time of year. Throughout 2003, both tried desperately to time the market. They planned to get their profitable new flagships in place so that when the recovery got rolling, sales would take off without the need for margin-draining incentives.
It might be time for some markdowns, folks. Itanium 2 is not the lead balloon that Itanium was, but it hasn’t begun to return what Intel and HP shovelled into it. Microsoft let its buddy down by not prodding midrange x86 customers toward Itanium, and by foot-dragging on Itanium ports of Microsoft’s own server stack. Meanwhile, Advanced Micro Devices (AMD) is making hay by running unmodified x86 code, including Windows, at Xeon speeds on affordable multiprocessor Opteron systems. If it’s not already doing so, Microsoft should be sending mash notes to AMD.
Microsoft’s attention may be distracted from the heady world of silicon by more pressing concerns. Microsoft doesn’t yet know how to make Windows 2003 Server irresistible to customers. Not many Windows 2000 shops are dying to upgrade. Those that want to spiff things up can stick with Windows 2000 and upgrade their hardware and apps around it, or they can consider non-Microsoft alternatives.
I don’t think Linux, OS X, or Solaris will pick up thousands of accounts from companies abandoning their Windows servers. If you’re not buying Windows 2003, it’s probably because you plan to stick with Windows 2000 or NT. But if you are willing to eat the cost of migration in the name of consolidation and growth, you might as well look at all of your choices.
In any such shoot-out, Microsoft enters with a disadvantage. It never acquired a talent for technically informed competitive marketing, clinging instead to its “only an idiot would buy something else” shtick. To the chagrin of Intel, Microsoft, and Apple, this holiday market probably won’t be dominated by sales of new systems. Add-ons such as color printers, digital cameras, MP3 players, CD/DVD burners, LCD panels, and video cards will put cash in the till.
It’s worth noting that small businesses, a booming segment, has a similar shopping list. Microsoft and Intel don’t benefit from peripheral sales.
Apple has a presence there, but it too has to move systems to make money. Redesigning some desktops and notebooks, along with cutting prices on others, are the best moves Apple can make to spur holiday system buying. The Windows version of iTunes will help take up the slack.
On the business side, Apple is being bitten by the bug it tried so hard to dodge. Some customers eyeing the current G4 Xserve are hanging back, waiting for Apple’s G5-based server. Buyers know that Xserve prices will drop when the G5 server debuts, and that the G5 server will seriously outgun the Xserve in throughput.
So although I love your pumpkin cheesecake, Aunt Janet, please don’t come over on Thanksgiving. I’m working.