The Economists Cloud Debate: Microsoft

The rise of cloud computing is not just shifting Microsoft’s centre of gravity. It is changing the nature of competition within the computer industry.

Technological developments have hitherto pushed computing power away from central hubs: first from mainframes to minicomputers, and then to PCs.

Now a combination of ever cheaper and more powerful processors, and ever faster and more ubiquitous networks, is pushing power back to the centre in some respects, and even further away in others.

The cloud’s data centres are, in effect, outsize public mainframes. At the same time, the PC is being pushed aside by a host of smaller, often wireless devices, such as smart-phones, netbooks (small laptops) and, perhaps soon, tablets (touch-screen computers the size of books).

Although Windows still runs 90% of PCs, the fading importance of the PC means that Microsoft is no longer an all-powerful monopolist. Others are also building big clouds, including Google, a giant of the internet, and Apple, renowned as a maker of hardware, with a market capitalisation that now exceeds those of both Google and IBM, its original arch-rival (see chart above).

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The Unwritten Laws of Luddite Technology

What are the Basic Luddite PC Tech Laws?

Let's start with the so-called 'Brains of the Outfit', the 'Nerve Centre' - The PC, Laptop, Mac or 'computer'

• Law 1: For every fix that a Windows Update patch fixes, the update will break two other things on your PC
• Law 2: The risk that Windows will need to automatically install time-sucking critical updates on your PC, is directly proportional to your need to get your PC started
• Law 3: The hard drive always fails just before you were going to back it up.
• Law 4: Your data will get corrupted just before you plug in your new backup external drive or will be corrupted when plugging in your backup device..
• Law 5: Your backup plan is only as good as your last successful restore.
• Law 6: The number of USB ports on your PC or Mac will always be one less than you need at any given time.
• Law 7: Feeling the time pressure on you to fix a computer quickly, will cause you to take longer.
• Law 8: If you close the PC case and tighten all the screws before testing it, it won't work; If you test it before closing the case, it will be OK.

What are The Luddite Tech Support Rules?
Now that you've mastered the basic technology traps, you think you're ready to move on to Tech Support.

• Law 1: If you fix a computer for a friend or family member, you'll be their tech support for life.
• Law 2: If you Build a computer for someone else, then he/she also owns you for life!
• Law 3: Recommend a product that you've used with no problems, and the friend/family member who buys it will immediately descend into some sort of product return hellhole of retribution.
• Law 4: Show any smart or handy IT skills at work, and your company's IT department will start referring all their difficult coworkers to you, the Mr Fixit Guru Guy!
• Law 5: If it's broken and you call tech support, it will immediately fix itself while you're on hold or are still trying to press the correct buttons to get through the responding call centre's phone system.

What are The Luddite Internet Ordinances?
You can find a world of trouble online.

• Law 1: Within a month of agreeing to be "friends" with your boss on Facebook you will regret it, big time.
• Law 2: The crappier the Web site, the sleazier and sketchier the ads.
• Law 3: When entering "Captcha" verification codes on a Web site, you'll always type in the numeral 1 when the site wants a lowercase L, and a capital O when the site wants the number 0.
• Law 4: Just before taking out the boss in a WoW raid, your Internet connection will die.
• Law 5: The difficulty involved in redeeming a rebate is directly proportional to the monetary value of the rebate.
• Law 6: The safe draft of a nasty e-mail, will always somehow find its way to the (unintended) recipient.

What are The Luddite Precepts of Mobile Tech?
Desktop technology isn't the only source of inevitable woe in your life. All those shiny mobile devices can cause pain, too, since the freedom of untethered technology doesn't extend to immunity from rank on rank of frustrating unalterable laws.

We report 10 master Luddite Mobile Laws here.

• Law 1: The charger for your current cell phone will not work with the next cell phone you buy.
• Law 2: Your laptop's charger weighs half of what your laptop weighs and doesn't fit easily into the laptop carry bag.
• Law 3: A laptop battery will drain at twice its normal rate whenever you leave home without your power cord.
• Corollary: Your laptop's battery life is inversely proportional to the amount of work you need to get done on a single charge.
• Law 4: Your iPod or iPhone will be on its last burst of power just as the plane door shuts.
• Law 5: A replacement battery charger will cost 70 percent of the original purchase price of the whole device, including the laptop bag. For phones, the figure is 140 percent!
• Law 6: Your cell phone will inevitably break before your two-year contract is up, forcing you to overpay for a new, less-cool model.
• Law 7: The proprietary charging plug (cost to produce: 50 cents) for your device will disappear within two weeks and will cost you $40 to replace.
• Law 8: On any vacation, a) the memory card for your digital camera will be safely lodged in the card reader on your desk at home. b) The camera's proprietary re-chargeable battery will be dead, with the charger sitting next to the card reader.
• Law 9: A cup of coffee or fizzing drink on your desk, is guaranteed to render your laptop utterly useless.
• Law 10: Your MagSafe adapter will always come unplugged precisely when you need to charge your Mac laptop's battery.

What are The Luddite Software Statutes?
Finally, if entanglements with hardware principles don't leave you bound and gagged, there are always software standards to render you helpless.

• Law 1: Your software provider's online support pages contain explicit instructions for troubleshooting every conceivable problem, except yours.
• Law 2: Nine times out of ten, tinkering with your Registry to fix a system issue will create a new and more severe problem. Did you back it up before you started? Unlikely!
• Law 3: Ten times out of ten, downloading a spyware product will create hidden processes/services more insidious than the original malware/adware encroachment you set out to stop.
• Law 4: The performance increase you can expect from running a Registry cleaner can be calculated as z(n + y), where n is the number of Registry entries cleaned, y is your system CPU's clock speed in gigahertz, and z = 0, or near to it.
• Law 5: The larger the number of people who want your attractive iPhone app, the likelier Apple is to reject it.
• Law 6: iTunes will crash. That's it. No, really.

Total Cost of Ownership (TCO) - Replace or Repair PCs and Laptop

We are all faced with the questions; when to re-invest in our computer equipment and how long should we continue to support obsolete models, given the high cost of support, out-of-warranty repairs and the acquisition /depreciation overheads.

It is especially relevant in these difficult times. The cost of finance is high, to sustain the finance industry and to claw back lost revenue. Whereas, the cost of computer power is dropping and negotiations and deal-making has never been so readily available, in an effort to stay competitive and afloat.

Consolidation versus Growth
The questions are equally relevant if you are trying to dig in and consolidate your resources to protect you from the growing storm or whether you are going for future growth and looking to launch your company with greater capabilities, when times improve or allow. We are all looking for and waiting on, that breakthrough moment.

Costs versus Benefits
Clearly everyone's company is unique and they have particular circumstances to take into consideration but the overall Cost v Benefit argument is similarly simple in most cases. Hopefully the illustrations here will give you some constants in a question of variables.