The decline of Hardware business
Last week, Hewlett-Packard, the world's largest Personal Computer (PC) maker, announced that it is creating another company for its PC business and stop building the tablet it launched a month ago since it cannot compete with iPad. The company decided that it is about time to stop the building of devices (Hardware) and move to “Software as a service” business because it is much more profitable.
Basically it looks like HP is copying IBM, which sold its PC business to Lenovo in 2004 so it could focus on providing more business in “software as a services” and consistent with what Microsoft is also doing. By turning HP into a software company like IBM, Microsoft and Oracle the company is joining a list of hardware companies migrate into software business as the price of hardware continues to drop. According to the latest study, more and more hardware companies are moving to software business and with HP quit hardware, that will leave Dell as the last U.S.-based manufacturer of personal computers. The other is Apple, which is growing bigger and faster with the line of innovated products such as the iPods, iPhone, and iPad but it has its own operating platform and not following Microsoft's Window direction.
For years, hardware business has been going in a spiral downward and probably gone in few years. The job market for hardware engineer will be tough in the near future. Industry analysts predict that HP will sell its PC business to one of the Asian manufacturers. With that, hundreds thousand of hardware people will probably lost their jobs as the industry is losing one of its pioneers.
Many questions remain unanswered: As more companies are moving into “software as a service”, where do they get the skilled workers that they need? How many universities have training in this area? How many service managers are available? How many companies really understand about service management? One thing that will happen: The salary of service manager will mostly increase with high demand and low supply. Today the average salary of software service manager is estimated to be between $95,000 to $120,000 depending on experience but it could go up to $150,000 to $180,000 as cloud computing become more and more popular.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
