Comdex Fall 1996 coincided with the twenty-fifth birthday of the microprocessor. The quarter-century since Intel released its 4004 processor was celebrated in an exhibition in front of the Las Vegas Convention Centre.
As the 250,000 people attending the conference filed past the exhibits, some must have wondered what will be in the glass cases in another 25 years' time at Comdex Fall 2021. Bill Gates and Intel CEO Andy Grove have obviously been worrying about that, and about what the multimedia captions are going to say about their companies.
The Kings of Wintel showed their fears in keynote speeches. The odds on the demise of the Wintel empire at any time in the near future are long, but they're shortening. Gates is worried about the Network Computer, and Grove is worried about the larger and larger bets his company is having to make developing new chips. Grove's speech opened the show and, fittingly for the man whose corporate how-to book is titled Only The Paranoid Survive, it was by far the most pessimistic of the two.
Grove thinks there is no longer enough demand from the corporate desktop to drive the magic circle which has seen sales of one generation of chip cover the costs of developing and manufacturing the next. The rate at which these costs are rising is accelerating just as dramatically as the power of the chips themselves. Microprocessor manufacturing plants, which cost $3 million to open in 1973, now stand at $2.5 billion, and will soonrise to around $10 billion, Grove predicted.
"Empty, a factory like that is dead," he said. "The challenge is to fill these factories. There's an economic mandate to grow the number of users to sustain the magic circle."
"My fear is that one day the cycle might flutter. The whole cycle that has kept the industry going might stop, or even reverse. I consider investing in protection for that cycle is as important as investment in factories and technology," he said.
The only way forward is through the consumer, who will demand the cycle-hungry entertainment applications and the 10GHz chips Intel plans to ship in 15 years' time.
"Simply put, we're in a war for consumers' eyeballs. Consumers have a choice - to look at TV, or interact with a PC. What we're really after is the number of hours they spend watching TV. We have to go after that time with arresting and compelling features," he said. And by the year2000 those features are going to involve virtual reality with a visual and audible quality better than current TV and video, he predicted.
How consumers will be able to afford the necessary hardware was not clear however, unless Intel is planning some planet-sized price cuts. A demonstration of virtual reality during the keynote speech involved stepping up through better and better hardware while playing the same virtual reality clip of a stroll through an English village. Video quality was only just reached when 11 Pentium Pro processors in one SMP box were used to run the clip.
(And to underline Grove's paranoia, the final showing revealed an army tank hiding in the sleepy Cotswold village).
Grove's only attempt to persuade his audience that, as business users, they or their customers might want that sort of computing power on the desktop involved a video link via a PC to a Seattle coffee shop. Around 7,000 people watching the demonstration were asked to shout happy birthday over the link to a one year-old girl in a Seattle coffee shop.
After the Grove speech David Winn, general manager of the IBM PC Company for Europe Middle East and Africa, was sympathetic to Grove's fears that the development of successive generations of chip would involve larger and larger stakes. "If you think about the mechanics of what Grove's doing, it's terrifying. He has to keep making these enormous bets to keep the flywheel moving," Winn said.
Gates delivered his keynote speech on the second day of the show. Sounding a lot more upbeat than Grove, the author of the Road Ahead predicted a time when Comdex museum exhibits will describe present-day PCs as "machines that couldn't talk, look, listen or see". According to Gates, PCs may one day be able to interpret the expression on a user's face, and have already been programmed to work out the position of a user's head.
At times, Gates appeared more like Harry Enfield than the CEO of Microsoft.
During the speech he played a spoof video parodying Internet mania, in which he stood up at the Internet Addicts Anonymous meeting and pronounced: "My name is Bill, and I'm an Internet addict."
But Gates' presentation wasn't all light-hearted. There was a serious message too, and it wasn't it all flattering to proponents of the Network Computer. While the words NC never crossed Gates' lips, it was obvious who his repeated criticism was levelled at. "We've had times when people wanted to recentralise the processing - this is really by people who want to sell more expensive servers," he said, in a clear reference to the two main NC players, Sun and Oracle.
Gates side-stepped direct references to the NC by referring to Microsoft and Intel's NC-lookalike, the NetPC. Describing it as principally a diskless PC, he said: "Networks will be overloaded if businesses go diskless. The cost of the server will go up, a lot more than the cost of the disks would." Those remarks must have left the audience wondering why Microsoft has bothered inventing the NetPC at all.
With a Windows NT victory over Unix on the cards, Gates turned his fire on the open systems movement. He praised the way Windows hardware and software has proliferated under Microsoft's guidance - although he used the word "we" to blur the distinction between the Windows industry and his own humble company. "There's no doubt that the open systems approach is more expensive than the Windows one," he claimed.
The criticism brought another opportunity to bash the NC. Gates predicted that the Java environment will spawn as many variants as the Unix platform has. "In the Unix world where they didn't have a separation of hardware and software supply, there was a lot of fragmentation."
The complexity of the PC and the management overheads that have led to calls for the NC were openly addressed by Gates. "We have a lot of work to do," he conceded, before describing Microsoft's Zero Management promise.
Gates repeated the promise of reduced management with server software to be introduced with NT 5.0, expected in early 1998.
For IBM, Winn suitably summed up the hopes raised at Comdex that entertainment systems and communications will come to Intel's rescue, continuing the showbusiness feel of both keynote speeches. He said: "This is a crazy business. There's a pot of gold at the end of the rainbow with convergence.
Right now there are razor-thin margins, and the terrible penalties of obsolescence. It's more like Hollywood than people want to admit."
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