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ComputerWire: IT Industry Intelligence

IT that actually serves a useful purpose? Now, there's an intriguing proposition, and it's a concept gaining currency among the industry's top chief executives,

writes Gavin Clarke.

Advanced Micro Devices (AMD) Inc's president and CEO Hector Ruiz has become the latest convert to the cause, preaching during his Comdex Fall 2002 keynote speech in Las Vegas, Nevada, yesterday.

Ruiz joins Sun Microsystems Inc's Scott McNealy and Palo Alto, California-based Hewlett Packard Co's Carly Fiorina who have used Comdex or recent trade shows respectively to down-play innovation for utility.

Today's message is about customers squeezing the most out of what they've already got by - guess what - buying yet more technology. Only this technology isn't sexy or hot.

HP chairman and chief executive Fiorina, whose company slogan is "invent", recently began the trend away from sexy and hot by telling analysts and OracleWorld delegates that customers are focusing on return on investment. They are not, she has decided, seeking "the fastest, hottest box, the next killer application or the next coolest piece of technology."

Underlying executives' messaging, though, is a sense of having to make do. Customers are just not spending, which means vendors must prove the usefulness of their technology.

Like Sun and HP, AMD has been adversely affected by customers' failure to spend. Meanwhile, the company's highly touted Hammer processor for desktop systems that runs native 32-bit and 64-bit applications has been delayed until next year.

Hoping to turn Sunnyvale, California-based AMD's negative headlines into a marketing plus at Comdex, Ruiz called on customers to ask that their vendors no longer develop "technology for technology's sake". Instead, Ruiz said, vendors should develop products that meet real-world customers' needs.

"I urge you to demand that those companies who are currently serving you today begin developing technology not for its own sake. Not in isolation from the real world. But in line with what you are really trying to do," he said.

Ruiz said Metcalfe's law would set the standard for excellence, as semiconductor strategies can no longer be defined solely by making transistors smaller and cheaper. Metcalfe's law, devised by 3Com's Robert Metcalfe, says the usefulness, or utility, of a network equals the square of the number of users.

The shift to a customer-focussed value proposition is driven by growing numbers of mini-computers, cell phones, personal digital assistants and digital TV he said.

McNealy, meanwhile, used Comdex to promote the Santa Clara, California-based company's enterprise products and N1 strategy. N1 is Sun's attempt to help simplify systems management and help customers utilize all of their network processing and storage resources through a virtual environment. N1 competes against IBM's autonomic computing and HP's Utility Data Center plan.

McNealy believes Sun's partners such as Cap Gemini Ernst & Young, EDS, and Deloitte Consulting will serve as integrators, connecting N1 to "non-Sun" environments. McNealy has, in the past, disparaged systems integrators.

"We will make it happen, whether we do it or the [computer reseller] channel does it, or a third-party does it," he said.

McNealy also hollered the familiar Sun systems message, knocking Wintel-based systems from Redmond, Washington-based Microsoft Corp and Santa Clara, California-based Intel Corp. McNealy said Sun develops "Lego-like" architectures that are Web-focussed and flexible allowing customers to easily integrate Sun's servers, microprocessors, software and tools with products produced by third parties.

Sun's president, chairman, chief executive juxtaposed that approach with Microsoft's strategy, which he said is based on "welding shut" components. McNealy also knocked IBM, which he said, offers a costly, opaque and closed approach to building business systems.

McNealy also took time to comment on Sun's fiscal position. Speculation over his company's future is rife, as stock valuation and revenues tumbled during the dot-com and telecoms bust. "We monetized the bubble. "Having $5.2bn cash in the bank is a very good thing," he said. "I wish our customers had more money."

© ComputerWire

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