Vanishing Computer Companies

In the category of "nobody ever said life is fair" sits the dual responsibility facing business-technology executives: have the vision to see what's coming in the next 18 to 24 months and the focus to execute flawlessly in the here and now. I suspect this precarious juggling act has become even more challenging in recent months following the disappearance (with two exceptions) of those entities that used to be known as computer companies. Other than Dell and Gateway, there are no computer companies anymore. I don't know what to call these IT vendors that used to be computer companies--uh, IT vendors?--but to call them computer companies is like calling Disney a movie company. It's the truth, but not the whole truth.

Of course, the fundamental issue isn't so much what we call these companies but rather what they're becoming, why they're making those transformations, and what that means for you, their customers. And in some cases those transformations aren't nice and neat culminations of tidy three-year plans--quite the opposite. Rather, as the entire business-technology sector slogs through a miserable summer with the posting of more lousy financial results, and as the debate rages about whether the slump is shaped like a V or a W or a Q, some erstwhile computer companies are being forced to take the risky step of trying to rapidly accelerate their evolution and become what they hope customers and prospects will want them to be in 2003 and beyond.

Here's an example: Go back to mid-2000, about when we all began to realize we weren't in Kansas anymore. If at that time someone had predicted that Compaq within the next year would form a collaborative venture with life-science superstar Celera Genomics and the Department of Energy's Sandia National Laboratories, would you have (a) said, "Yes, I've been predicting that myself"; (b) asked, "What in the world are you talking about?"; (c) laughed; or (d) demanded the person surrender his/her car keys and go sleep it off? But, as described in this week's cover story, that's precisely what Compaq has done, in a project the company hopes will give it not only a technical victory in building the world's most powerful supercomputer but also a hugely strategic victory in becoming a leading business-technology partner in the explosive new field of life sciences.

At the same time, Compaq CEO Michael Capellas is steering the company toward becoming a more forceful player in software and services ("Compaq's Challenge," July 2, p. 18; informationweek.com /844/compaq.htm). Or look at Sun Microsystems--as its server business continues to come under attack from IBM and others, and with the drastic reduction in demand from the telecom and dot-com companies that spiked its revenue so prodigiously over the past few years, it's placing increasing emphasis on its storage business. But there, too, Sun has found the going to be tough, which precipitated its alliance for storage products with Hitachi.

And what of Hewlett-Packard? CEO Carly Fiorina talks about a new emphasis on service-centric computing--becoming an always-on infrastructure expert--and VP of software solutions Bill Russell says, "You don't think of HP as a software company--we're looking to change that" ("Rebuilding, The HP Way," July 23, p. 36; informationweek.com/848/hp.htm).

As for IBM, its quarterly reports speak glowingly of strong advances in services and software, and highly visible alliances with software partners like i2 and Ariba give it presence in several high-growth markets well outside its traditional computer sales. In many ways, IBM has remade itself sufficiently over the past several years to become the model for what a 21st-century "computer company" needs to be: increasingly relevant to its customers with products and services that help those customers become what their own customers want, rather than perpetuating the history of what the computer companies have been and of the products they've made.

And finally, take it as a throwaway line or an interesting anecdote: In his dazzling 1985 novel Neuromancer, William Gibson infuses his tale of the Net and the nascent cyberculture with an offhand prediction of the merger between Genentech and Mitsubishi. It seemed pretty crazy way back then.