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October 14, 2009


Nick Mehta

Hi Chuck,

Great post and something I think about a lot. I believe and hope this is true - that technology commoditization actually yields increase in technology use and net increase in purchasing. However, two things concern me:

1. While price drops may increase overall unit sales and revenue, how does it affect margins? For example, a web-based version of Microsoft Office or Exchange on a per user per month basis may yield MORE Microsoft users and MORE revenue but LESS operating profit and cash flow for Microsoft.

2. There are a number of economists who theorize that technology and the Internet in particular will actually lead to a massive wave of deflation in the coming years (theory being technology increases market transparency, commoditizes products and services more quickly, etc.)

It's hard to say which way it will go, but as they say, it sure will be interesting to watch!



I have observed human nature for quite some time, although I didn’t formally study economics. Everybody gets accustomed to their current situation or lifestyle fairly quickly. I, for one, attest that my current lifestyle in the United States is rather different than my early life while I was growing up in another country. Regardless of a person’s economic condition, I believe very few feel completely satisfied with their own financial circumstances. This is normal condition of humanity because we are not accustomed to comparing our current stage with our prior lesser condition. You feel always inadequate because you compare yourself with something more than you have.

I don’t think the economists and pundits are necessarily declaring what will happen—they are just reading tea leaves, albeit with an experienced eye. What they really can’t predict are psyche of the massive population and specific future usage demands. I believe people will find a way to consume more IT recourses if it helps meet their desires and further their expectations--even if this will lead to much more automation and less human intervention. However, we can’t predict where this eventuality of this mass atomization will lead because of the falling resources being dedicated to IT expenditure.

All of things we are talking about now including virtualization, private computing, or whatever will eventually behind us and we will continuously pursue greater and greener pastures. It would very interesting if some scientist claims that they have discovered the “Paradox of Positive Elasticity” deep down of our chromosome someday. Well, the wisdom of the wise and the intelligence of the intelligent will be never sufficient for us all.

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Chuck Hollis

  • Chuck Hollis
    SVP, Oracle Converged Infrastructure Systems

    Chuck now works for Oracle, and is now deeply embroiled in IT infrastructure.

    Previously, he was with VMware for 2 years, and EMC for 18 years before that, most of them great.

    He enjoys speaking to customer and industry audiences about a variety of technology topics, and -- of course -- enjoys blogging.

    Chuck lives in Vero Beach, FL with his wife and four dogs when he's not traveling. In his spare time, Chuck is working on his second career as an aging rock musician.

    Warning: do not ever buy him a drink when there is a piano nearby.

    Note: these are my personal views, and aren't reviewed or approved by my employer.
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