Free the hardware?
Rick Nelson, Chief Editor -- Test & Measurement World, 7/1/2004
"Information wants to be free!" That was the battle cry of the dot-com boom. Despite the notable and legitimate efforts of the Linux community, Apache aficionados, Mozilla partisans, Open-Office proponents, and the Free Software Foundation, the cry has for the most part degenerated into the lame rationalizations of MP3 pirates.
Perhaps we've come full circle: Jonathan Schwartz, Sun Microsystems' president and COO, has said, "My belief is in five years, customers will no longer be paying for hardware—it will be free" (quoted in The Wall Street Journal, June 1, p. B4). This represents a marked change for Sun, which has traditionally exacted premium prices for hardware based on its Sparc processor technology. The company's new strategy is to drive down hardware costs to spur sales of its Unix-derived Solaris operating system.
Evidence of high software-to-hardware price ratios is easy to come by. You can buy desktop computer hardware for as little as $319. To add the capabilities most customers look for in a computer, you'd need to add an operating system and applications suite—for example, Windows XP at $199 plus Microsoft Office at $479. Consumers have expressed a clear preference to pay those prices rather than download and configure free Linux and OpenOffice code, for example.
If the desktop PC and workstation market continues along the path toward free hardware, will the test-and-measurement community follow? Well, consider that Anritsu's Signature 8-GHz signal analyzer supports tight integration with Matlab software to allow real-time viewing of Matlab-processed results. That's a powerful combination, but don't expect Anritsu and MathWorks to come up with a deal whereby Matlab profits (prices for version 7 start at $1900) subsidize Signature (priced from $49,500) giveaways.
Even lower-priced test-and-measurement hardware lacks the production quantities PC hardware, and it demands premium performance that will resist the hardware price erosion found in consumer markets. For instance, Exacq Technologies offers high-speed data-acquisition boards for both the consumer-centric PCI bus and the instrument-centric PXI bus, and sales and marketing director Tom Buckley notes that PXI versions command a couple-hundred-dollar price premium.
Software is undoubtedly an increasingly important component of test-and-measurement systems, but you can expect the hardware to hold its own.
I could be wrong. Perhaps in five years you'll find the Test & Measurement World Buyer's Guide listing only high-priced software products, with the hardware too cheap to waste ink or pixels on. Don't count on it, though.
Contact Rick Nelson at rnelson@tmworld.com.
