By Owen Ferguson

The terrain of computing as we know it is changing rapidly. Computing power and Internet access — traditionally the realm of desktop computing — are moving to portable and handheld devices. At the same time, applications are leaving the desktop, migrating out onto the network in the form of ASPs. Could we be approaching the end of the PC era?

One indication of the PC's approaching demise is our move towards consumer information appliances. Consider John Patrick's keynote speech at Cascon 1999, an annual Toronto-based event for technology researchers in both the private and public sectors. IBM's vice-president of Internet technology announced: "Right now, 97 per cent of Web access is done via personal computers with Web browsers. In a few years, I bet it will be less than 50 per cent."

Patrick tells of a day in the not-too-distant future where connectivity will be direct and immediate. "We are going to see the emergence of devices we've never even thought of. Boom-box browsers. Walkman browsers. Kids are going to wear them around their necks and in their backpacks," he says. "People ask me which companies are going to be producing this next round of computing devices, and I say Sony and Phillips — consumer electronics companies. What operating system will they use? Who knows? Who cares? Do you know what operating system your phone uses?"

Jill House, a research analyst with Framingham, Mass.-based International Data Corp., also sees an increase in the use of computer-alternatives in the coming days, although she's not quite so enthusiastic as Patrick. "Worldwide, we're forecasting that handheld companions will grow 35 per cent from 1999 to 2003 (at a) compound annual growth rate, and we expect them to grow at a pretty healthy clip going forward."

But House doesn't see these devices as a challenge to the PC, at least, not yet. "Right now, consumers are still looking at the very base functionality levels. They're looking at a calendar, an organizer, an electronic replacement of a rolodex," she says. "Some people are looking for enhanced e-mail capabilities — basically just a general personal information management and organizer functionality."

House predicts that as handheld devices become more prevalent, and as users get comfortable with the idea of using them, more and more people are going to want additional functions traditionally available on the PC to be available on the handhelds. This includes multimedia applications like picture viewing and MP3 playback, and Internet functions like Web browsing and streaming audio and video.

"I think Internet connectivity is a big issue," House says. "Going forward, I think the trick is to recognize that it won't be Internet content as (we're) used to it on the desktop. It will be very specific, very personal Internet content: things like travel schedules, or unique e-mail notifications and alerts from a Web service."

Of course, the amount of functionality that portable PC alternatives can offer is somewhat limited by current technology. Every function requires its compliment of hardware and software, and there's only so much space to cram it all into. "It's that usual mixture of price and form factor where people aren't going to wear a watch if it's ugly and hard to read and too expensive," says House. Her vision, like Patrick's, is of information devices that operate as simply as consumer electronics. "If you've got something like a (Handspring) Springboard type device, where when you plug in a new piece of hardware it adds new data and when you pull it out, it's gone, (the device) has got to integrate seamlessly with the operating system to provide a holistic, appliance-like experience, where it just does what you want it to do."

But it will take more than a bunch of handheld organizers to unseat PCs from their current throne in the technology industry. After all, users are still going to need a place to run word processing applications. It's also likely that users won't actually be running their word processors locally — a server in some data centre will, and they will simply be running a tiny piece of client software that lets them access it.

Traver Gruen-Kennedy is the chairman of the Application Service Provider (ASP) Industry Consortium. As far as he's concerned, we're well on our way towards an entirely new model of software distribution, one in which applications running on service providers' systems are accessed by consumers as needed and paid for by subscription.

Although there aren't many consumer ASPs available yet, they're starting to appear. For instance, Microsoft will soon be offering its Office Online service, which allows users to access an online version of Office 2000 from Windows 95/98 and, more notably, Windows CE-based devices. And unlike the hundreds of Megabytes of disk space that the traditional Office 2000 requires, the online version weighs in at only 600K.

"Once the consumer services are available, that's going to drive a new model that I would call multi-user family computing. Today, you generally have a PC in the home, but with ASP services, you'll have individual household members using televisions, telephones, computers and new types of Internet appliances as a way to get to Internet applications," says Gruen-Kennedy.

Of course, the ASP market is still in its infancy, especially from a user perspective — most of the applications currently being rented out are large-scale enterprise software. But Gruen-Kennedy predicts that soon all major software will be distributed using an ASP model. "By next year, we can expect to see a significant number of users coming online, and by 2001 it will be quite mainstream," he says. "I think it would be better for companies to get in early rather than late, because as everyone shifts to this model, those companies that start early will already be realizing income from ASP sales as their packaged software sales start to fall off. Those that wait will notice their package sales drop off and (they) won't yet be generating significant ASP revenue."

So as more and more data and applications make their way onto the Internet, and PC computing power becomes less and less relevant, what will happen to hardware manufacturers? According to Gruen-Kennedy, they'll have to shift their focus away from the PC if they want to stay competitive. "The hardware folks simply move Moore's law from the desktop onto the network. The faster chips won't go into PCs anymore — in fact, you won't even need to have a PC. Moore's law is really going to be driven by the servers," he says. "We're moving from the desktop era into the 'Net-top' era, one in which the hardware manufacturers will enjoy tremendous opportunity. (But) their customers won't be users or the enterprise, (they will be) a new breed of service provider called the ASP."

Another technology that may spell decreased use of the PC is Voice-over-IP (VoIP), which allows voice-based communications to be conducted over IP-based networks like the Internet and also means that phones themselves may soon be getting smarter and more powerful. IP-based phones, like those produced by Cisco Systems Inc., connect directly into IP networks. This means that they have access not only to other VoIP phones, but to anything else with an IP address. A VoIP phone could easily contain a Web browser, an e-mail program or client software for a major ASP.

"The VoIP market is headed everywhere. In the last couple of years we've seen VoIP capabilities move into just about every type of device that exists in the telephone business," says Hugh Goldstein, director of sales and marketing for Surf&Call Center, VocalTec Communications Ltd. of Herzilya, Israel. "Switches have it, routers are getting it, PDAs (personal digital assistants) may have it in the near future. VoIP is being adopted in a very broad fashion.

Another interesting application of is in call centres, where VoIP can be used to connect Web-based and phone-based technical support. Goldstein's product, Surf&Call Center, helps to facilitate this. "So if you were at my Web site, you could browse around and at a particular point, there would be a button. If you clicked on that button, my phone would ring," he explains, "and after the phone rings, as soon as I pick it up, our browsers will be synched up, and I'll see whatever you're seeing."

So with phones and other devices getting smarter, increasingly wired and more independent, and applications migrating up onto the Internet, will there be a reason to own a PC, say five or 10 years down the road?