In a filing with the Securities and Exchange Commission, says the Journal, numerous people involved in the deal--from Dell's own financial chief to those financing the deal--said the computer maker was increasingly fighting for market share in an industry that appears to be on "a downward spiral."
While the gyrations of Dell and others is an interesting tale in the world of finance, it also has broad implications for those of us who use any computer technology. Many of us make substantial investments in our computer hardware and operating systems, and--from a risk management point of view--it seems fair to ask what constitutes an acceptable risk when it comes to such purchases.
If we take Michael Dell and company seriously, then we would have to question the wisdom of purchasing any new computers--while simultaneously wondering what our present hardware will be replaced with. A 2005 survey from research firm Gartner (as reported by InformationWeek) found that the average life span of a desktop PC is 43 months, and only 36 months for mobile PCs. More than a third of respondents said the main reason for replacement of PCs is to improve user productivity, while more than a quarter cited escalating support costs with older machines. More than 20 percent said new software requirements led to the need for new computing systems.
Eight years later one would have to believe that support costs will continue to climb for older hardware and outdated operating systems and software applications. The impossibly rapid pace at which technology advances makes it quite likely that whatever we buy today will be outmoded even before we reach the commonly accepted life span of the PC (3-5 years). Outmoded equipment/software puts us at a competitive disadvantage, and in the current highly competitive insurance marketplace, we can hardly afford to allow that to happen.
One possible answer would be to simply move all of our applications to the cloud, where we can then let the cloud provider worry about keeping things up to date. But do we really want to put our core business and extremely valuable data in the hands of a cloud contractor? And how can such a contractor guarantee that our enterprise will be kept at the top of the technological heap? And even if that could be done, would not the cost be prohibitive?
The specter of technological obsolescence raises many such questions. Our advancing computer technology offers many different paths to a productive enterprise, yet it is far from clear which of these paths will lead to a better competitive position. Most of the people I know who have touted this technology or that as a major game changer have ended up being right--for a brief period--but wrong in the long run, because inevitably something faster, more efficient, or cooler comes along.
The good news is that when it comes to the irresistible force that is technology growth, we are all equally inept at predicting the relative risk of Technology A versus Technology B. In the end it will be those whose risk decisions align with their broader business goals who are likely to be more competitive and successful.
ARA TREMBLY is founder of The Tech Consultant and The Rogue Guru Blog. He can be reached at email@example.com.
May 1, 2013
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