Who do you think will be the winners in the longer run –- the integrators or the best-of-breed folks?

IT budgets are under pressure and the ability of end users to integrate lots of technologies is a challenge. This is why server companies are going to customers with a single end-to-end stack of technologies that are tightly integrated and with a service offering.  In some cases that has an appeal, in some cases it doesn't. Companies that have tried to integrate at every level, or innovate at every level have not been successful.


Over a 6+ years period, the small companies [Digital, Data General, Prime, Computer Vision]did not create shareholder value, the shareholder value was created by the best-of-breed companies -- Intel, Microsoft, Oracle, Cisco , Dell. They created the differentiation and value. The challenge for HP and IBM, no matter how big they are, will always be to really innovate at every level of the stack; and I don't believe there's enough R&D to do that. And even if they consolidate the entire industry, it will be just a matter of time before a bunch of horizontal best-of-breed companies reemerge, and that's how the industry has been. If you go back to the 70s and 80s , there were all these mainframe companies that competed with IBM; they are all gone.  


What you have now is companies trying to recreate that model. History has not been kind to that model. So I'm not convinced. May be you can argue that IT is a much lower growth market than it was 20 years ago, maybe it's different this time, but all in all, I'm not convinced. The big super stack of technologies, I think it's unrealistic to think they can be best of breed.