IBM Corp. Outlines Its Strategy for Future Computing Devices - Company Business and Marketing

ENT, Jan 12, 2000 by Thomas Sullivan

KIRKLAND, Wash. -- Computers as we know them are about to change. Instead of the dull colors and boxy; sleepy shapes of the one-size-fits-all PCs now on the market, vendors are gearing up to offer sexier systems in new form factors for corporations and consumers alike.

Officials at IBM Corp. (www.ibm.com) recently discussed the company's strategy for the future of computing products, including a rebranding of its desktop line.

Ralph Martino, vice president of marketing and strategy at IBM's personal systems group, referred to Big Blue's strategy as the Edge of the Network (EON) framework.

This framework is intended to optimize computing devices to meet the needs of individual workers. Instead of the current focus on the PC itself as a tool, the concentration will shift to how individuals use the tool.

EON includes a set of core technologies and purpose optimized devices (PODS). IBM is in the first phase of the strategy -- concept introduction -- and discussing the overall framework.

The core technologies include specific form factors, security, software exploitation, networked computing, partitioning of personal and business information, and connectivity.

"Clearly, everything will be connected," Martino says. "Rarely will we see a device that is not aware of its surroundings."

On the product side, the latest products in IBM's Netfinity server line already fall into the EON framework.

The second phase of EON, market demonstration, will begin this spring. The company will rebrand its line of desktop devices and pull them into EON. Martino wouldn't comment on the new brand name. One new product IBM will offer is an all-in-one flat panel desktop PC.

Anne Bui, a personal computer analyst at International Data Corp. (IDC, www.idc.com), says PC manufacturers will differentiate their products in the future more on style than on technological substance.

"Technology road maps are mainly dictated by Intel and Microsoft," she says.

As a result, hardware vendors sell almost identical systems. Style is one place they can significantly differentiate themselves from each other.

"The conventional desktop is eventually going to go away and be replaced by smaller designs and all-in-one form factors," Bui says.

A recent IDC study found traditional desktops accounted for more than 42 percent of all desktop PCs shipped in the United States in 1998.

By 2003, the traditional PC'S share is not expected to reach 10 percent, according to IDC. All-in-one flat panels and small form factor vertical devices, however, will grow in market share from less than 1 percent in 1998 to more than 40 percent of all desktop shipments in 2003.

Dell Computer Corp. (www.dell.com), Gateway Inc. (www.gateway.com), and Compaq Computer Corp. (www[tilde]compaq.com) also have begun talking about plans for a streamlined all-in-one fiat panel display desktop PC.

The third phase of IBM's EON framework strategy is the long-term leg of the plan in which PODS will be released.

In accordance with the belief that different types of users will benefit from different form factors, IBM plans to offer devices for specific computing scenarios. These systems will run Windows 2000 and Intel Corp.'s 810 chipset because this combination will enable more form factors than previous Wintel groupings. For instance, IBM is working on wearable computers that Martino says are essentially the same as ThinkPads under the covers, yet are small enough to fit on a belt and be viewed through a tiny screen worn as a pair of glasses.

Another example is IBM's Web-Connect server, a system designed with one specific purpose in mind. This thin server will connect small businesses to the Web, and nothing more.

The conglomeration of new products will create a personal area network, in which information follows individuals around wherever they go.

Martino described a scenario in which individuals carry a drive -- about the thickness of three credit cards -- containing all their personal and business information, plug that drive into a system, work, refresh the drive, and take the drive with them when they leave.

"The notion is that the lines between life and work will be blurring," Martino says. "It [requires] a combination of hardware and software to create this optimization."

For instance, PCs of all form factors are expected to be customized; even if they look alike before booting up, once a user starts the system there will be a number of software-based options. Based on a user's habits, these options will provide specific routes: to what can be done, such as which applications, files, or Web sites a user may want to access with one click from the desktop. IDC's Bui says IBM is the only company she knows of that is saying the lines between personal life and work will blur. Others maintain distinct divisions.

The reason is that the requirements of each market differ greatly. Consumer systems, for instance, typically ship with the capabilities to play games and watch DVD movies on a machine. Corporations, on the other hand, may have users who only need a word processor, a spreadsheet program, and an e-mail client.