Silicon Insider: Little Guys Can Win

The 1984 recession started the turn; the 1991 recession finished it. Companies pulled outlying divisions home. Great, dominating, standardizing firms like Microsoft, Intel and Nintendo arose, asserting predictability on the marketplace even as they crushed their tinier foes. We entered the era of the Big Players, the Tech Titans, where innovation was measured in product upgrades, not technological revolutions.

The Wheel Turns Again

The one countercycle of this era was the Internet, but that was only because the World Wide Web, itself a form of centralization, kicked off an unlikely entrepreneurial land rush. The dot.com boom itself, though disguised by the frenzy of activity and the thousands of new firms, was essentially a centralizing revolution. Why do you need hundreds of Safeways when you can have everything delivered from a single WebVan warehouse? Why go to a hundred garage sales, when you can visit a single eBay?

The defining product of this wave was the "Server", born at place like the newly recentralized HP as the client-server for corporate MIS, then evolving into the network router for the Internet. The server, ever more powerful, lined up in great phalanxes in vast server farms, was the cynosure of the era. The hardware and software companies at the center of this movement, the Ciscos, Oracles, Siebels, et al, became the most successful corporations on the planet.

They aren't so successful these days. Nobody seems to want to spend tens of millions of dollars anymore on big enterprise systems. Moreover, they no longer have to: the wheel has once again begun to turn.

Late last year, while working on a cover story for a magazine, I was given a tour of Google by its CEO, Dr. Eric Schmidt. I've known Schmidt a long time, since his big iron days at Sun. When it came to technology, Schmidt always went first class. So, when he took me into Google's server room, I was stunned to see how primitive the place looked.

By way of explanation, Schmidt pulled out a motherboard, one of thousands in racks around me. You see, he said, we build them ourselves. All off-the-shelf stuff. Nothing fancy. We even chose one of the cheapest disk drives because it turned out to be more reliable in the highly demanding operating environment we work in. We don't buy fancy servers anymore.

By coincidence, the next day I had lunch with Marc Andreesen, co-founder of Netscape. I told him about what I had glimpsed at Google. What you just saw, he told me, was the next revolution.

What Does This Decentralization Mean?

This new decentralization wave is picking up speed and power by the day. If you know where to look it's everywhere: the rise of Salesforce.com, the Apple iPod, home networks, multi-function PDAs and cell phones, the new super Gameboy, consumer broadband… It's one reason why Bill Gates went back into the lab two years ago — just watch what Microsoft is about to do with Tablet PCs and education. Most of all, you can see it in the rise of Linux, perhaps the most decentralized intellectual construction in human history.

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