Schaumburg is a western suburb of Chicago. In addition to being the site
of the Chicago area's largest shopping mall, schaumburg is the home of
Motorola, a company that has been connected to the Internet for many
years. The story below ran on the front page of the New York times on
Wednesday.
kelly
May 19, 1999
Internet Fuels Revival of Centralized 'Big Iron' Computing
By STEVE LOHR with JOHN MARKOFF
SCHAUMBURG, Ill. -- As Walt Grom tours his domain -- row upon row
of hulking black computers -- he speaks of the importance of
"fundamental engineering disciplines" and "brute force experience."
The vast room is spotless, brightly lit and chilled by air
conditioning, an austere interior designed for the care and feeding
of big computers.
The huge datacenter, run by IBM, is one of the engine rooms of the
Internet, powering the World Wide Web sites and electronic commerce
operations of some 400 companies and organizations including
BankAmerica, Macy's, Goodyear and the National Hockey League.
Photo credit:
Carol Powers for The New York Times
Photo caption:
At America Online's Dulles Technology Center employees manage a huge
network of servers.
_________________________________________________________________
Such computer centers, known as server farms, are the unglamorous
side of the Internet revolution -- a world apart from the young,
urban culture of Web design artists with their tattoos and
earrings. Here, a no-nonsense style prevails, and the hallways tend
to be populated by big, beefy men with beepers.
"We're happy to do the plumbing," said Grom, who runs IBM's server
farm in Schaumburg.
Internet datacenters are sprouting up across the country in a sure
sign of the trend toward once again housing information and
computer power centrally -- a seeming reversal of the last two
decades of computing.
The personal computer has defined the industry's recent history and
how computers were used. As personal computers spread rapidly in
the early 1980s, they were seen as engines of individual
empowerment and decentralization of information. Millions of
islands of information were suddenly stored on desktop machines --
knowledge residing in the spreadsheet, word processing and database
programs of individuals. It was a technical and social repudiation
of the previous three decades, dominated by mainframes and
minicomputers, a computing formula based on "big iron" machines
that held all the information.
But in an odd alliance, the Internet -- hailed as the technology
behind a new economics, tearing down old hierarchies and flattening
corporate organizations -- is fueling a recentralization of
information and a revival of big iron computing.
The Internet holds the promise of anytime, anywhere access to
information and entertainment delivered over powerful networks to
an array of information appliances like handheld devices, cell
phones with screens and television set-top boxes, not just personal
computers.
That makes the present round of information centralization very
different from the old days. The glass-house datacenters of the
1960s were controlling gatekeepers, with information rationed from
the center. Today's modern server farms, by contrast, are powerful
nodes on the Internet, making information more readily available to
individuals.
There are, to be sure, privacy concerns raised by the prospect of
creating increasingly large digital storehouses of personal
information. Those concerns, technology experts say, require
clear-cut corporate and public policies to protect privacy as
collecting, storing and distributing information becomes easier and
cheaper in a digital economy.
Still, even personal computer pioneers generally regard the shift
to Internet-based computing as an irreversible step toward
efficiency rather than a retreat from the information democracy
they sought to foster.
"People want to own their own information but they don't want to
maintain it, and that is driving the shift toward centralization,"
said Adele Goldberg, a member of the team at Xerox Palo Alto
Research Center in the early 1970s that created the founding
concepts of personal computing.
Because of the Internet, companies are starting to embrace
centralized computing again for the first time in decades. "A real
mind shift is under way in corporate America," Scott Winkler, an
analyst at Gartner Group, a research firm, said.
In some ways, corporate America is following the Internet leaders.
For behind an America Online or an Amazon.com is a massive arsenal
of computing power. America Online Inc. supports its service to
more than 16 million subscribers -- with a million people using the
system simultaneously on many evenings -- with two vast server
farms in Virginia and a third one planned, a $520-million project
announced in March. (Such datacenters are known as server farms
because they are veritable crop-rows of big computers that send, or
serve, data out to users.)
"The good old economics of scale really do apply when it comes to
server farms," Marc Andreessen, the chief technology officer of
America Online, said.
The new model of computing -- a proliferation of information
appliances linked by the Internet to server farms -- has been
called the "post-PC era." For the post-PC vision to be fully
realized will take years, and billions of dollars of investment to
build ultra-fast digital networks, wireless technology and new
kinds of handheld and other devices.
And to say that computing appears to be heading toward a post-PC
era is not to say the PC will become obsolete anytime soon. Indeed,
the PC industry has benefited from the rise of the Internet so far
because the PC today is the principal access device to the Net.
Desktop alternatives to the PC like the "network computer," or NC,
running only a Web browser for tapping into the Internet -- first
proposed in 1996 by Lawrence Ellison, chairman of Oracle Corp. --
have not yet slowed PC sales.
But the evolution toward the Internet model, most analysts agree,
represents the most significant change in the industry since the PC
replaced the mainframe as the center of gravity in computing two
decades ago. The shift represents a daunting challenge to the big
winners of the PC industry, Microsoft Corp. and Intel Corp., whose
software and microchips are the essential technology in most PCs.
Their high profit margins are expected to erode as consumers
increasingly use simpler, lower-cost devices to tap into the
Internet.
Both companies recognize the challenge and are responding. As one
step, Intel announced in April that it was planning a big move into
Internet services by building and running server farms. The move
seems a big departure for Intel, whose microprocessors serve as the
electronic brains of most PCs. But Intel sees the server farms as
part of its future of moving beyond the personal computer to become
a "building-block supplier" to the Internet economy.
"The PC industry is changing drastically," said Andrew Grove, the
chairman of Intel, "and when it's over it probably won't even be
called the PC industry. It will become the Web infrastructure
industry."
Microsoft is preparing for the day when people may keep much of
their personal and professional information on large servers with
an initiative called Megaserver. The concept is that a person will
be able tap into a large central database via the Web to get
e-mail, personal schedules, news, weather updates and other
information anywhere, anytime.
Even Microsoft concedes the access device will not always be a PC.
"While the PC will stay central, we realize there is demand for
computing on non-PC devices," said Steven Ballmer, the Microsoft
president.
An early test bed for the Megaserver concept is Hotmail, a
Web-based e-mail system, which Microsoft bought for an estimated
$300 million in January 1998. Since then, the number of users of
the free e-mail service has jumped from less than 10 million to 40
million. With Hotmail, a person can retrieve e-mail from anywhere
with any PC or other device equipped with a Web browser instead of
being required to use a particular machine loaded with one's own
e-mail software.
"Hotmail has served as a big wake-up call for us, and we're
delighted that we bought it," John Ludwig, a vice president of
Microsoft, said.
Hotmail is supported by four large datacenters, and Microsoft is
using them as incubators for developing the heavy-duty software
needed to run server farms, thus improving the capabilities of
Windows NT, the company's most powerful operating system. But
Microsoft, Ludwig notes, is also working to improve the software
the user sees, making it easier to use.
"There's more software to write than ever before -- that's the good
news for us," he observed.
Microsoft added another centralized information service in April
when it acquired Jump Networks Inc., a Web-based calendar and
datebook system.
Microsoft's move came a few weeks after America Online purchased an
Internet calendar service, When Inc., for an estimated $150
million. The start-up, which stores personal scheduling information
on a Web site, started its fast-growing service just four months
earlier.
Both companies are headed in the same direction, though from
different starting points, one a software giant, the other an
online service. Clearly, the line between software and services
will increasingly blur as the shift to Internet-based computing
proceeds.
In an internal memo last fall titled "The Era Ahead," Bill Gates,
the Microsoft chairman, pointed to the opportunity as software
becomes more a services business. "We get a closer relationship
with customers and a predictable revenue model because they pay us
a regular fee for the service," he wrote.
But Gates also warned of the rising threat to some Microsoft
products likely to come from online services. "A company such as
America Online is in competition for all our information-management
software, because they can do it through their servers," he
observed.
In Silicon Valley, dozens of start-ups have been created as
Internet services to centrally handle personal information. The new
companies mostly focus on e-mail, calendars and back-up file
storage to insure information is not lost when an individual's PC
crashes.
"Many of these applications should be moved onto the Internet
because it is more reliable, available everywhere and cheaper,"
said Eric Brewer, a University of California at Berkeley computer
scientist who is a co-founder of Inktomi Corp., a Web software
company.
Building and running the computing engine rooms behind these
Internet services promises to be a good business for years to come.
Yet this behind-the-scenes technology business -- like the market
for Internet appliances -- will most likely be more diverse and
competitive than the bygone mainframe era, whose dominant supplier
was IBM, or the current PC era, ruled by Microsoft and Intel.
The start of the trend back to central computing has already been
rewarding for the established producers of "big iron" machines like
Sun Microsystems Inc., a leader in computers running the powerful
Unix operating system, and IBM, whose mainframes have been retooled
as Internet servers. The big Unix and mainframe server computers
range in price from $100,000 to millions of dollars.
"The big growth for us has been in everything-dot-com -- the
revolution in Internet commerce in all its forms," said Edward
Zander, the president of Sun.
Indeed, as more and more companies begin to view the Internet not
as an experiment but as a technology on which they run their
businesses, they need Web sites, e-mail networks and Internet
order-processing systems to be up and running around the clock,
seven days a week. That kind of reliable, industrial-strength
computing is the traditional bailiwick of mainframes and Unix
systems.
Still, PC technology is improving steadily and PC servers --
typically using Intel microprocessors and Microsoft's Windows NT
software -- are increasingly tackling heavy-duty computing chores.
Some heavily trafficked Web sites, handling huge amounts of
business, are backed up by server farms using mostly PC technology.
Dell Computer Corp., a direct marketer of PCs, says that sales from
its Web site are now running at a pace of $5 billion a year. "Look
at our Web site," Michael Dell, the company chairman, said. "It's
Dell servers running Windows NT. Yes, we have a way to go at the
high end of computing, but don't bet against the PC industry."
Photo credit:
Todd Buchanan for The New York Times
Photo caption:
Walter J. Grom, right, is a director at IBM and works with Wiliam
Barnett to manage day to day operations of IBM's huge electronic
commerce network.
_________________________________________________________________
Gary Hargreaves does not much care about who supplies the
technology. He just wants it to work.
Hargreaves manages an electronic commerce project at Goodyear Tire
and Rubber Co. -- a company Web site set up to more efficiently
distribute and share information with its tire dealers.
The current system, which is gradually being phased out, is costly
by any measure -- time, paper or aggravation. Three thick packets
of documents are mailed out each week to Goodyear's 2,400 dealers
in the United States and Canada. The company's call center in
Akron, Ohio, receives 2,500 inquiries a day from the dealers, many
of which are merely to obtain routine information on prices and the
availability of tires.
All of that kind of information -- along with sales reporting -- is
being transferred to the Web site. A third of Goodyear's North
American dealers are online and using the Web site, though the rest
are joining soon, and Hargreaves is already impressed by the
results. The call center is reporting fewer routine calls, he says,
and dealers say they are getting more timely information, which
helps them sell more tires and improve customer service. The weekly
mailings will be stopped at the start of next year.
For all the attention understandably focused on the meteoric rise
of online retailers and auctioneers, like Amazon and Ebay, the
biggest economic impact of the Internet in the next few years is
expected to be inside old-line companies like Goodyear -- boosting
productivity by electronically automating back-office transactions.
Though Goodyear has an in-house datacenter, it chose to let outside
experts provide the computing power for its Web site -- a role
known as hosting -- and run its electronic commerce network. Many
companies are making the same choice. That is why the Web hosting
business of both established companies like IBM and AT&T, and
newcomers like Exodus Communications Inc. and Verio Inc., is
projected to grow from $696 million last year to $10.7 billion in
2002, according to International Data Corp., a research firm.
Internet companies like America Online, to be sure, will have their
own server farms. But others increasingly view computing as a
utility, a service to be purchased like electricity. Indeed,
technology historians note that when factories began using
electricity in the late 19th century, each had its own power plant.
Later, regional utilities were created and sold electric service to
the factories.
At Goodyear, Hargreaves seemed to apply the same logic to his
company's decision to have its Web site for dealers managed by IBM
at its server farm in Schaumburg. "We're in the tire business," he
explained. "Why run the digital power plant ourselves?"
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