Advanced Computing, Part 2: Markets and Cash


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published May 23, 2002

If there is anything this economic downturn has taught me, it is the importance of cash. Businesses rush to cash opportunities and employees seek the highest bidder within acceptable constraints. While I am impressed with the new technologies that are finally coming to market, we have to ask if they will bring the same economic boom as we saw in the 95 to 99 period. In examining the basis of the current evolutionary phase, I conclude not, but that isn’t to state that there isn’t money to be made.

In the last tech boom, we participated in the mapping of business functions of people and hard assets into databases and web sites. This produced a massive business process re-engineering phase, disintermediation, and cladogenesis. To perform this Herculean task, businesses purchased databases, desk tops, web servers, consulting services for projects, and a number of new products and tools to manage documents, accounting, customers, and suppliers. It was a massive investment phase in creating more efficient and productive businesses. Why should a human write numbers and purchase orders all day if computers can do the work for them?

The current computing advances, agent based systems, optimal control, and covariant analysis, are in many ways are dependent upon the prior investments in computing. They rely upon access to embedded hardware systems, corporate databases, and prior statistical studies in order to perform their work of determining new ways to handle business processes and increase productivity. As to the hardware industry, covariant analysis can be conducted on a simple laptop that has access to the database. Time is a relatively low importance issue since the initial analysis to generate the variables can be done overnight once. Subsequent computer simulations will only take a nanosecond with a 1.1 Ghz micro processor. Similarly, agent based models can calculate projections over a lunch hour on a common laptop.

But if money isn’t going to flow to database teams and hardware providers, who will it go to? It will go to the teams that are either able to generate the base product of advanced computing or able to understand both the underlying principals of advanced computing and the business problems to be solved. While the overall financial picture isn’t likely to produce another Microsoft and Intel, it is likely to produce a next generation Siebel or Diamond Technology. Would I bet on it? Yes.

The May Report, TECH BUSINESS BRIEFS, May 23, 2002

About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.