Mark Cuban on the future of computing - game consoles and thin clients

Mark Cuban wrote another opus on the Future of Personal Computing. It is a fascinating review of the impact of games consoles, Google, applications in the cloud, and broadband.

Game consoles are becoming the multi-media center of the home for games, video, music, and photos. I agree with Mark Cuban on this. All of these were traditionally on the PC. No more. The game console is connected to the much bigger TV screen with a better sound system. It is located in the living room where everyone can enjoy it. It makes sense that most of the multi-media stuff that was on the PC will move to the game console. Xbox is in a great position to handle all of these with more local storage.

New releases of hardware or operating systems don't get much attention anymore. Again, I agree with Mark, and I think the reason is because gaming has moved off the PC and onto game consoles. Games have always been the driving force for bigger disks, faster processors, and better operating systems. It was the gamers who stood in line at midnight for the new hardware and software releases. For the rest of us, a 2003 vintage PC has plenty of horsepower for most applications.

I disagree with Mark on the non-media trends. I don't see the game console becoming the center for non-media uses like email, web browsing, or Office like applications. It is more likely that mobile phones and PDAs will take a bigger share of market than the game console. The TV screen is not ideal for web browsing, email, or working with documents or spreadsheets. The problem is the screen...both the size and location. The living room is not a good place to get work done, and the TV screen doesn't have the resolution to support small text from 15 feet away.

The PC is still the best platform to get work done. Meaning, things like email, spreadsheets, word documents, presentations, web browsing, and of course all the enterprise business applications we use everyday at work. However, I agree that all this horsepower (CPU, Disk, Memory) is unnecessary for most of these applications. The location (desk or office versus sofa in the living room) makes it the best choice for doing real work. This will continue to be the case for a very long time.

The big question is will these applications be stored on the local hard disk or will they be hosted in the cloud? Both Google and Microsoft are racing to build huge data centers to host these applications online. Google is assembling their Gmail, Docs and Spreadsheets, etc. to be a player for the applications. Microsoft Live is doing the same thing.

Does this leave an opening for a thin client or a resurgence of Larry Ellison's "Network Computer" idea? Yes, I think it does for certain market segments and single application users. UPDATE: Greg Linden made an excellent point about the declining cost of PCs. The NC would have very little cost advantage, so I changed my mind...I don't see a place for it.

The move to applications hosted online has already started. Hosted email, calendars, and contacts happened 10 years ago. The difference today is that businesses can have their own domain name and host their email with Microsoft or Google. Applications like spreadsheets, word processors, and presentations are already moving online too. Salesforce.com and others are moving business applications online as well.

What do you think? Do we really need more powerful desktop PCs? Will all applications be hosted in the cloud? Will game consoles become the multi-media home entertainment center?

Join the conversation. Let me know what you think.

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Comments

[Greg Linden]

Interesting post, Don. Clearly, Microsoft thinks these trends are chipping away at the PC, hence their efforts with XBox, MSN/Live, and Windows Mobile.

I do wonder how much of this trend is counteracted by a trend toward owning more than one PC-like device. Is it true that people will replace a PC with an XBox? Or is it more likely that people might own one or more PCs, an XBox, and a mobile device?

It seems to me that the Xbox is and likely will remain a poor PC replacement, as are cell phones and handhelds. They simply are not designed and optimized for the same purposes.

Fortunately, PCs are much more affordable than they used to be (under $500 compared to over $2k a decade ago), so owning more than one of these PC-like devices may be within the reach of many households.

[Don Dodge]

Excellent point Greg. PCs are much lower in cost now than they were 10 years ago. Amazing!! This also argues against the Network Computer idea since the cost difference would be very minor.

I think there will be a computing continuum that Ray Ozzie calls the Client-Server-Services model. Your applications and data will be accessible, and synchronized, on the Client PC, on the Server, and as a web Service. All of this will be accessible from your laptop, on a browser, from your phone, or even from an Xbox. So, no, the PC is not dead, but it will not be the dominant center anymore either. Just one device in the computing continuum.

I don't think that most people will go for the high end PCs anymore. I think they will buy laptops instead of desktops, and will be satisfied with modest processors and disk. Maybe Intel and Seagate will feel the pinch here.

[Lloyd Budd]

"Game consoles are becoming the multi-media center of the home for games, video, music, and photos. I agree with Mark Cuban on this. All of these were traditionally on the PC."

I would argue that previously "games and photo" were not included when talking about a multi-media center in the home, and the center was the TV, *stereo* and video player. Who has had a computer connected to their TV? The game consoles with their multi-media software brought computers to the TV and stereo.

[Lloyd Budd]

The future of the home and office computer is more net and less personal computer, resulting in a more personal, always on experience.

[Abhay S]

Possibly there will be a cloud inside a home. Say a very powerful server which provides the storage and computing power for the gaming consoles and multiple thin clients. Popularity of home storage devices are an indicator.

[Steve Morsa]

Good points all the way around...

Relatedly; what does seem certain is that this continuing expansion of app access options will; given the concurrent and commensurate need for ever greater expertise to effectively utilize such options; virtually guarantee that there will always be a strong and vibrant market for advertising agencies and marketing specialists...contrary to the belief of many that the need for their services will decline in the years to come.

As stark evidence, we need look no further than the paid search industry; a relatively technical (when done right) field which didn't even exist until the birth of GoTo in the late 1990's...and yet which today employs some 100,000+ people world wide.

[gzino]

I like your distinction between the area used to get work done, and the area used for entertainment. And we can add media creation to the work area - some of which, e.g. video editing, can be resource intensive and is currently best done locally. Since the price delta between high-end and low-end machines will decrease (partially due to apps moving to the cloud and to the entertainment area), and most of us will have at least a few intensive read or write apps that we do in our work space, I think demand for high-end work space machines will still be there, even as more apps move to the cloud and the entertainment area.

[Ewan]

I think the console should be the multimedia center of the home, but until one of either Microsoft or Sony loosen the reins of control on their console, it just won't happen.

Right now the early adopters of the world have an XBox 360 or maybe a Playstation 3, and a seperate PC running Windows, OS X, or Linux, all under the TV because the XBox 360 has less multimedia features than the original XBox had after it had been hacked.

The 360 can't access windows file shares directly, can't directly play the vast majority of movies downloaded off the Internet (legally or illegally), can't let me plug in my external hard drive and let me copy movies between the internal and external, and has only a (currently not upgradable) 20GB local storage.

Each one of these tasks was readily available on a hacked original XBox, so there's no way that the 360 doesn't have the processing power available, it's just been a decision to enforce extreme restrictions on what it can and cant do, to encourage the sales of Windows Media Center.

It's absolutely not about limiting illegal downloads, since the Windows Media Center will happily transcode any illegally downloaded DIVX files to play on the 360 on the fly, so I don't understand this decision.

While in the short term it will work, I can't see the 360 being a media center as long as I need my PC on and working flat out transcoding HD video then sending it jerkily over my 54g wireless network, when the 360 could and should just load the file once over the network at the start, then play it in the original format.

[sports bettor]

Never say never? A gaming console will NEVER become the multi-media center of my home. Computers and TVs maybe, but not an Xbox.

[Abe Sultan]

Great post, I have to agree that the game consoles will become the center for the multimedia world (movies, videos, pictures, games); it can play some interesting role as far as casual e-mail and web browsing but I don't think it will substitute all web browsing and e-mail specially related to work or more personal matters.

I see a world where all the devices in the house are connected and you can do your grocery shopping directly from home automatically when certain essentials are running low or expiring soon.

I can see Microsoft playing a big role on this and a good start by introducing the home server.

I see a very bright future and I can't wait until this is a reality in most middle income homes.

[Mr. Smurfball]

I rue the day when my refrigerator, as part of Abe Sultan's vision of networked appliances in the average middle-class home, takes it upon itself to order more eggs and chorizo because it somehow knew I ran out after making a breakfast burrito this morning. I'm perfectly able to go down to the store and buy my own groceries, thank you. Nor would I want my monthly egg consumption hosted in some database somewhere. "Gee, Mr. Smurfball hasn't ordered pomegranites in six months. Time to shove pomegranite ads down his throat via his TV and DVR!" Nor would I want anything personal (such as personal writings, personal photos, my music, etc) stored in an offsite box that I do not control unless I consciously choose to reveal that data, for example, in an online financial transaction. I also rue the day when my computer or application has to rely on offsite storage and/or processing for something as mundane as my son's birthday pictures or letters to my wife.

Call me a curmudgeon, but I see the extension of applications and storage hosted online and distributed to users, rather than running those applications locally, to be a larger security nightmare than today's sorry security situation.

[kayvaan]

I think for many consumers and business apps will be hosted in the cloud. I do think that things like storage and networking will become utilities. I can see a time when a consumers buy apps like utilties and homes have built-in storage networks to optimize bandwidth utilization, provide backup, etc. So you could have data backup at home and send high-bandwidth data at off hours. Apps would be smart enough to tell where most current version is - at home or at the data center.

I can even see an ISP being a one-stop shop at least for basic stuff. Order internet service, get at thin-client and storage server as rental equiopment. The user doesn't even "see" the storage server on the network except if they explicitly want to keep data at home only. Otherwise it's just used for bandwidth optimization and backup.

I.e. homes and business may have some storage and basic infrastructure, but the app would live on the network.

[Jason Rubenstein]

Mark Cuban is not a technical genius or visionary. First and foremost he is lucky. The smartest thing he has ever done was hedge his Yahoo shares with derivatives. Broadcast.com was a joke and is not even in existence today.

Anyone with a billion dollars can be successful. He would fall on his face if he had to start a company with regular resources (i.e. a couple of million dollars) today.

[Don Dodge]

Jason, You obviously don't know Mark Cuban, and you haven't read his blog. He is definitely a visionary, and more than just lucky.

Mark is the kind of guy where you could take all his money away and he would be back to the top within a few years. Conversely, lucky people who win the lottery typically blow all the money and are back to scrapping for a living within 5 years.

Mark may not be a technical genius, but I think he knows more about technology than 95% of the population. He is definitely a visionary who knows how to employ technology.

Oh, and BTW, Broadcast.com is still in use at Yahoo.

[Mark Zanzig]

What most people (including Mark C.) do not realize is that this is NOT about technology. The average Joe on the street loves simplicity...

- the simplicity of turning on the TV and see moving images immediately
- the simplicity of not having to worry about what to watch (turn to the right station, and let the pictures flow)
- the simplicity of using a plain PC to get things done (e.g. writing a letter/email, playing a game, sorting photos)
- the simplicity of not having to worry how things actually work together (drivers, codecs, wireless, etc etc)

After presenting an experience from 1998 (where thin clients should be rolled out to a network of 1,000+ users, and the experiment failed) Mark told me that "it's not 1998 any more". And yes, he's right. It's now 9 years later.

But why is it then

- that I still see people printing (important) emails? Email should be reliable enough by now, but apparently it isn't.

- that I still can not feel really safe when bookmarking a site/page? Why do I still think that the bookmarked page/site might be gone? Just take Youtube for example. Bookmarked today, gone tomorrow.

- that people get upset about changes to user interfaces they have been using for some time (e.g. the recent name and layout change for a big business community in Europe)?

The average Joe does not like changes, and I guess that only the next generation (i.e. our kids) will start to adopt the new features. Others (older folks) who are not technology fans will be very slow to adopt such technologies.

[Machefsky]

Game consoles have been predicted to become the "center of xxxx" (fill in the blank) almost since the beginning of game consoles. It hasn't happened, and it probably won't.

Who controls game consoles? Kids and teens.
Who controls the home TV - Mom and Dad.

It's not likely that Mom and Dad are going to go over to letting game consoles control their home entertainment experience.

What is likely to become the center of home entertainment? Some TiVo like device. It already does exactly what you want with regard to enhancing the home TV experience, has a huge amount of storage which is easily expandable, even by 3rd party hacks, and is now networkable with your home computer via WiFi, allowing you to access all of your multimedia content stored there. Game consoles don't even come close to the TiVo experience.

Now, cable companies have fought back against TiVo by offering their own inferior versions which are "free" but brain dead. So, the big problem with definitively bringing about the revolution in home entertainment is actually the closed system the cable companies foist onto the consumer by requiring them to own the cable company's brain dead box. It would be as if everytime you wanted to connect to the Internet you had to use the device sold only by your network provider to do so. (On a related note, this is why mobile Internet technology has been so slow to develop - more closed proprietary systems in which you must use only the devices approved by your mobile carrier and are limited to accessing only the services they provide.)

In any case, all of this just slows down the inevitable, it doesn't keep it from happening. For people who own TiVos, they already are the multimedia hub of their homes. Everyone else has bubkes.

/Ira

(P.S. I have no connection with TiVo, and do not own their stock.)

[Jason Rubenstein]

Don,

Mark Cuban is not a visionary. Steve Jobs is a visionary. Bill Gates is a visionary. Sergey and Larry are visionaries. Mark has done nothing since but assembled a better Mavs team and manage to do stupid stunts (like Dairy Queen), fight with Donald Trump, and call You Tube a failure.

OK - technically Broadcast.com staff might still be employed at Yahoo but the concept of Broadcast.com is history.

[Don Dodge]

Jason, Wrong again. Mark Cuban was a visionary BEFORE Brodcast.com, and AFTER as well. Sorry, but lots of money doesn't help in the visionary department...you either have it or you don't...and Mark Cuban has it.

Mark started many successful businesses before Broadcast.com. In 1990 he sold MicroSolutions to Compuserve for $6M.

Since Broadcast.com Mark founded HD Net, ths first all High Definition TV network. He also financed and helped start IceRocket - a blog search engine, and RedSwoosh - a P2P media distribution company.

You want more? He was an early backer of Weblogs.com which was recently sold to AOL. And, last year Mark got involved with Sharesleuth.com, a web site to uncover fraud and insider stock trading.

There is more but I don't want to bore you. Clearly your definition of visionary is different than mine.

[Jason Rubenstein]

Don,

I am not doubting that he is a serial entrepreneur, but I the "visionary" is extreme. I think you use the term loosely in classifying him. There are only a handful of visionaries in the technology space. Mark Cuban is not one of them. There is a long list of far more successful entrepreneurs, venture capitalists, and industry icons that have accomplished far more than Mark has AND have a track record to prove it and wealth does not make one a visionary.

If investing in startups makes one a visionary then Sequoia, Kleiner Perkins, Benchmark Capital are visionaries.

If creating innovative products makes one a visionary then Steve Jobs obviously takes the cake on that one.

If being successful in technology makes one a visionary, then Bill and Steve at MS can have that title.

If doing something totally disruptive makes you a visionary then NO one can argue with Sergey and Larry at Google.

You Tube and My Space are visionary because their hypergrowth disrupted entire businesses.

Mark Cuban is successful - yes. He is rich no doubt. But he is lucky he is rich. He was around at the right time and place and knew that short selling his position was the thing to do. That was smart. But he has never created or sold anything that would qualify him as a "visionary".

Lastly, his behavior is immature. The Dairy Queen stunt was insulting to the working class citizens. Money does not equal class and he is a perfect example of it.