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a16z Podcast | The $200 PC in the Enterprise
27 segments available
What capabilities do enterprise companies really want from their computers? Twenty years ago, those capabilities might've been bundled into a mainframe. Ten years ago, it might've been the PC. Today, as more and more businesses rely on devices that need only browsers/ internet connectivity, what will the "$200 box" sitting at an employee workstation look like? In this hallway-style episode of the a16z Podcast, Benedict Evans and Steven Sinofsky discuss how tech devices evolve for the enterprise -- and more broadly, what happens when the S-curve levels out??
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The Shift from Mainframes to PCs
Benedict Evans and Steven Sinofsky discuss the historical transition from mainframes to PCs in the tech industry. They explore how mainframes lost their central position but continued to thrive, drawing parallels to the current state of PCs as mobile operating systems gain dominance. This segment sets the stage for understanding the evolving landscape of enterprise technology.
"hi and welcome to the a 16z podcast we're here today with Benedict Evans and Steven Sinofsky in another one of our hallway style conversations in this episode they discuss what happens when the S curv..."
IBM's Resilience Amidst Change
The conversation highlights IBM's surprising profitability in the years following the rise of PCs, despite predictions of its decline. Evans emphasizes how IBM's mainframe business not only survived but thrived, outperforming the S&P 500. This segment illustrates the long tail of technology and the unexpected longevity of certain enterprise solutions.
"after Windows 95 shift instead I see IBM's mainframe business grew really healthily throughout the 2000s and so it's interesting now as we think well it's one thing to say that the center of gravity i..."
The Long Tail of Technology
Evans and Sinofsky delve into the concept of the 'long tail' in technology, discussing how certain systems, like the UK's value-added tax system, continue to operate long after their creators have moved on. They suggest that the PC could experience a profitable period despite a lack of innovation, highlighting the slow pace of change in enterprise technology.
"profitable for them and if you just use the stock price measure which obviously has all the other variables aside with it but but it actually IBM beat the S&P 500 by 7x over that 20-year time frame on..."
Flattening S-Curves in the PC Industry
The discussion shifts to the current state of the PC industry, where innovation has plateaued. Evans points out that new PCs are not significantly different from older models, reflecting a broader trend of stagnation in the market. This segment examines the implications of a flattened S-curve for future investments and developments in PC technology.
"the UK that system the UK value-added tax system runs on backs created by Dec which I think discontinued it before many of the people listening to the podcast were born and yet that system is still si..."
The API Ecosystem and Browser Transition
Sinofsky discusses the transition to web-based applications and the importance of the API ecosystem in enterprise technology. He reflects on how businesses have gradually moved from client-server applications to browser-based solutions, emphasizing the slow adoption of HTML and web technologies in the enterprise space.
"but not not like core i7 the next generation yeah and it seems to this sort of two to three parts to that one of them is you know the center of gravity the center of the excitement center of investmen..."
The Evolution of Enterprise Applications
The segment explores how enterprise applications have evolved over the years, with a focus on the shift to web interfaces. Evans and Sinofsky highlight the challenges faced by enterprises in transitioning their applications and the long timelines involved in adopting new technologies, illustrating the complexities of modern enterprise IT.
"written to to provide capabilities for people and and in the business world what really took much longer than anybody thought was the transition to HTML and and the browser and so you have on the one ..."
The Role of PCs in Modern Workflows
Evans and Sinofsky analyze the current role of PCs in enterprise workflows, noting that much of the work done on PCs involves basic tasks rather than complex applications. They discuss how many enterprise applications are now web-based, reflecting a significant shift in how work is conducted in modern organizations.
"all of the applications would be been done inside the web browser that was pretty matter of you to build like two sayings I do my best um but this was the point that all the applications would happen ..."
The Future of Enterprise Computing
The conversation concludes with a look at the future of enterprise computing, considering how the landscape may continue to evolve. Evans and Sinofsky emphasize the need for businesses to adapt to changing technologies while recognizing the enduring presence of PCs in the workplace.
"years for it to really become a thing for all of those enterprise and it's super I mean it's really surprising how how long that that took and part of it is because it takes of like most enterprise ap..."
The Shift to Browser-Based Applications
In this segment, the discussion highlights the significant transition of enterprise applications to browser-based interfaces. The speakers illustrate this shift by referencing the use of electronic medical records (EMR) systems in hospitals, emphasizing how the reliance on web applications has transformed the way healthcare professionals access and manage patient data.
"acquisition integration and so the tail is very long to get these done but the demand was there immediately and so now what's happened is we've reached a point where most enterprises have moved all of..."
The Role of PCs in Modern Work
This segment explores the misconception that most work in enterprises is done on powerful PCs. The speakers argue that much of the daily tasks are performed using simple applications that do not require high computing power, challenging the traditional view of PC necessity in the workplace.
"still a browser certainly when you're 20 to 5 years ago that would have been Windows app and absolutely would have been a Windows app and and you see the same thing within the if you unfold a hospital..."
Rethinking Workforce Technology Needs
The conversation shifts to analyzing the U.S. workforce and the evolving technology needs of various job sectors. The speakers discuss how many jobs no longer require PCs, as mobile devices can fulfill the necessary functions, particularly in industries like construction.
"or anything like that they just front-ends the data in something they're not they don't really require multiple monitors they have no device connectivity and now those apps like they don't even run lo..."
The Future of Business Computers
In this segment, the speakers delve into the current landscape of business computers, estimating the number of PCs needed in the U.S. workforce. They highlight the distinction between roles that require traditional PCs and those that can operate effectively with mobile devices, raising questions about the future of computing in enterprises.
"good example of this would be construction so you know five years ago like if you were to do a construction project the first thing that they would do is come in and say we need a phone line and you n..."
The $200 Device Dilemma
The discussion focuses on the concept of the '$200 PC' and what it represents for the future of enterprise technology. The speakers compare various devices, including Chromebooks and tablets, and consider the implications of transitioning from traditional PCs to more cost-effective, browser-based solutions.
"stuff and and then the question is of the 50 million that have jobs that are sitting in front of a computer what happens to them hmm and this is that the thing we kind of we kind of push away at that ..."
Cost Containment in IT
This segment addresses the challenges IT departments face regarding cost containment when adopting new technologies. The speakers reflect on historical trends in PC ownership costs and how enterprises are adapting to minimize expenses while maintaining functionality.
"this should be and we can we come back to you know the browser was a platform from from mark from 20 years ago there was a parallel there and recent fantasy that you were going to have a Java note was..."
The Evolution of Device Management
The conversation shifts to the evolution of device management in enterprises, particularly with the rise of mobile devices. The speakers discuss how companies are leveraging employee-owned devices to reduce costs and the implications this has for IT management and security.
"interesting from an IT perspective because you know really what's on our mind is just like this is a cost containment problem for IT because now they what IT is very clever like when when pcs came out..."
The Impact of SaaS on Work Dynamics
In this segment, the speakers explore how Software as a Service (SaaS) applications have transformed work dynamics. They discuss the reduction of ad hoc analysis due to the capabilities of modern tools, which have streamlined processes and reduced the reliance on traditional computing methods.
"wow it was the greatest shell in the world to push all the costs of the customer it's not unlike on-prem computing does the same thing like people complain about AWS pricing but the the flipside of it..."
The Future of IT Infrastructure
The final segment examines the future of IT infrastructure in light of emerging technologies. The speakers consider the implications of using browser-based applications and the potential for new device models that could further reduce management costs and enhance operational efficiency in enterprises.
"what Salesforce has done the tools themselves have added the to of doing work the tools are doing the work because what the PC was not just about like moving we're computing happened but it was the da..."
The Chromebook Dilemma
The speakers discuss the challenges and advantages of using Chromebooks in enterprise settings. They analyze the implications of integrating Android apps into Chromebooks, highlighting the potential complications that arise from security management and user experience, particularly in educational environments.
"as you go to a sandboxed model of iOS or to a lesser extent Android you take a whole step change in the management cost of having how you deal with that device right and if you go to a peeler terminal..."
The Future of Enterprise Devices
In this segment, the conversation shifts to envisioning the future of enterprise devices. The speakers speculate on what a $200 PC might look like, emphasizing the need for simplicity and efficiency in devices that primarily serve as browsers, and discussing the potential for new form factors like HDMI sticks.
"someone else what's cached on it what do you have to think about then also like if you put it out in a school you have to go turn off the store you can't let all the students go and download apps it's..."
Navigating the Mobile App Landscape
This segment addresses the growing pressure on IT departments to develop mobile applications alongside traditional browser-based solutions. The speakers discuss the challenges of creating a seamless user experience across platforms and the implications of consumerization in enterprise software development.
"maybe the kind of the genesis of this conversation originally was I sort of thought well you know imagine the office floor for a health insurance company in a city somewhere in the Midwest and there's..."
Consumerization and Its Impact on IT
The discussion here revolves around the consumerization of enterprise software and how it affects IT strategies. The speakers highlight the need for IT to adapt to user expectations shaped by consumer apps, and the tension that arises between traditional enterprise solutions and modern user-friendly designs.
"focused on building browser-based apps for the past say five or seven years and migrating the other thing is they're under a lot of pressure now to produce like mobile apps like for iOS and a leap fro..."
The Enduring Legacy of Mainframes
In this concluding segment, the speakers reflect on the legacy of mainframes in enterprise computing. They discuss how mainframe applications continue to influence modern IT infrastructure and the challenges organizations face in transitioning from legacy systems to more agile, cloud-based solutions.
"I I have to use the mobile one anyway when I'm not when I'm at what I'm doing my family life and like I'm at the soccer game and a patient calls and wants some information like and so there's this ver..."
The Core of Windows Development
The discussion highlights the core applications that continue to drive Windows development, such as Office and professional software. Evans and Sinofsky explore how a significant portion of the PC market still relies on these applications, while questioning the future of PCs in a browser-centric world.
"application going through an API but the things that the most interesting thing in this conversation is the the the vast richness of the the Windows platform has rolled up into office and and is the p..."
Changing Job Roles in the Digital Age
Evans and Sinofsky delve into how job roles are evolving in the digital landscape. They predict that many office workers will increasingly rely on browser-based applications and mobile devices, leading to a shift in how tasks are performed and how IT departments will adapt to these changes.
"use all of those what you would think of as like a professional application that's doing like hardcore sophisticated creative stuff on a PC yeah like chip design is not like a browser-based thing it's..."
The Future of Enterprise Devices
The conversation turns to the future of enterprise devices, with Sinofsky suggesting that IT departments will push for devices without execution engines. They discuss the potential of Chromebooks and tablets to meet the needs of modern workers who primarily use web applications.
"super interesting is that's the split and that's really what happened with mainframes like the platform became existing software said the analogy that would be there were specific kind of applications..."
Mainframes vs. PCs: A Historical Perspective
Sinofsky reflects on the historical context of mainframes and PCs, noting how IBM's mainframe business thrived despite a lack of attention from the tech industry. He draws parallels to the current debate about the future of PCs, suggesting that while the business landscape will change, the need for technology will persist.
"IBM did was they also got smart about how to manage it and this is something that that I think is super interesting which is they said well if if it's really important to be valuable in this scenario ..."
The Rise of Cloud-Based Communication
The segment concludes with a discussion on the increasing importance of cloud-based communication tools. Evans and Sinofsky predict that while the number of users needing powerful PCs for tasks like Excel modeling may not grow significantly, the demand for cloud-based communication will surge, reshaping the enterprise technology landscape.
"desire or what I think if I were running Enterprise IT my view of it is that what's going to happen is the call centers of the world the vast majority of administrative assistants of office workers of..."