Recent growth and earnings for tech hardware companies have put them in the drivers seat for the coming years. The cyclical nature of tech hardware companies, particularly those that are run by visionary leaders, prove many have forgotten how important the software-hardware equilibrium can be. From Dell to AMD to Vertiv to Broadcom. Companies and organizations are riding the AI buzz and global demand. These companies have been on a stock valuation rocket ship!
It’s a good time be alive!
TJ
Republished from Sept 9th….
Hardware will lead the way into the next decade. The code can write itself, but the hardware cannot build itself(yet!). Devices, sensors, PCs, drones, drives, memory, chips are the place to be. If I were starting a business today, I would be all in on the hardware which has been out of the mainstream limelight. The whole chips “race” just regained centerstage after decades of broken policies. Hardware businesses which incorporate software and services as solutions will be the winners in the coming years. This will allow people who have multiple domain backgrounds to excel. Gone are the days of software only knowledge. The marriage of hardware and software is upon us. It’s a great time to be alive!
All eyes have been fixated on the coding and fancy algorithms which hypnotize the mind. Many are unfamiliar with what it takes to power the cloud…. which, communicates commerce…. powers the digital money flows….and runs people’s lives. As a result, tech hardware became boring to many over the last 15 years, taking a backseat to the software, applications and tools which we all use today. It became easier to raise venture money, inflate valuations and run your world from the living room. You could argue that hardware actually drove the global economy with the cloud platforms, satellites, and cables all built on high compute iron, silicon and “rare” metals. This on demand power allowed billions to communicate, start businesses, and hide behind avatars.
Have conversations today with younger generations and they do not know or understand the impact that hardware played on opening up the world to cloud computing, communication, and present way of life. Just like past generations did not fully comprehend technological impacts of telephones, railroads and ships. Some of the most valuable companies in the world are hardware-based companies which play critical roles in the way we live, work and play. When building homes, you have to create strong foundations. The groundwork laid by these hardware companies continue to produce benefits and will also catapult us into the next generation of society advancements.
Every house needs a good foundation……build….build…build!!
The Tech Cycles — A History
Hardware
Mainframes (1970s): The 1970s saw the domination of mainframe computers. Companies like IBM led the charge in developing large, expensive computing systems that were the backbone of major corporations and institutions.
Personal Computers (1980s): The 1980s saw the advent of personal computers with companies like Apple, Dell, and other IBM PC clones democratizing computing for the individual user.
Client-Server Computing (1990s): Hardware shifted towards distributed systems, where tasks were divided between servers and client machines.
Mobile Devices (2000s): With the introduction of smartphones, computing went mobile. Companies like Apple and Samsung revolutionized the way we interact with technology.
Cloud Computing (2010s): Hardware became virtualized, and cloud-based services from providers like AWS, Google Cloud, and Azure became the new norm.
Edge Computing and IoT (2020s): Increasingly, computing is moving towards the "edge," closer to where data is generated. This era also saw the rise of the Internet of Things (IoT) where billions of devices are connected.
Software
Monolithic Systems (1970s): Software was often custom-built for specific mainframes and was expensive and hard to maintain.
Desktop Applications (1980s): With the rise of personal computers, software transitioned into standalone applications for tasks like word processing, spreadsheet calculations, and more.
Web-based Applications (1990s): The Internet boom led to a shift from desktop to web-based applications.
SaaS and Cloud Computing (2000s): Software as a Service (SaaS) became popular, allowing users to access software over the internet.
Mobile Apps (2010s): Mobile devices required new kinds of software, leading to the proliferation of mobile apps.
AI and Machine Learning (2020s): Software increasingly incorporates AI and machine learning algorithms for tasks like data analysis, automation, and more.
While hardware cycles often lay the foundation for computational capabilities, software cycles are more agile, adapting quickly to new paradigms and user needs. Both are deeply interrelated, driving the technology landscape forward. But….
Software Fatigue — We feel the pain!
For all of us selling, consuming, operating and creating……software fatigue is real. Passwords, 2FA, APIs, optimization, workflows, decision trees, response rates, opens, clicks, ratings, recommendations, buy this…buy that, pilots, cancel at any time. Don’t get me wrong, there are enormous benefits and efficiencies with software addressing practical solutions which give time back. However, it can also make you numb with information that makes you less intelligent, agile and practical!
………you could even say……we humans became a device in the internet of things….
The main causes of software fatigue……
Too Many Platforms (Ping me!)
People are often required to use numerous platforms for work, socialization, and personal tasks. This can include multiple communication platforms (e.g., Slack, Teams, Email), project management tools (e.g., Jira, Asana), and more, each with its own set of features, notifications, and user experiences.
Way Too Many Features (Developers will build anything!!)
Many software applications offer a plethora of features, some of which may be seldom or never used. This creates a situation where the user experience is cluttered and overwhelming, leading to inefficiency and stress.
Constant Updates (Just Stop!)
Software applications frequently roll out updates that may alter the user interface, add new features, or remove old ones. This means that users must continually adapt, contributing to a feeling of fatigue.
Integration Challenges (Nothing is private!)
While many tools offer integration capabilities, the sheer number of possible integrations can be exhausting to manage and troubleshoot, often requiring specialized expertise.
Decision Fatigue (Sales slow!!?)
The constant need to choose the "right" software tool among a sea of similar-sounding options can cause decision fatigue. Once a decision is made, the user may face a steep learning curve, adding to the overall fatigue.
Notification Overload (Everything is breaking news!!)
The rise of real-time notifications, both on desktop and mobile, creates a constant state of distraction and contributes to software fatigue, as users try to juggle multiple streams of information simultaneously.
Security Concerns (Access to everything can’t be good)
Managing passwords, authentication, and other security measures across numerous platforms adds another layer of complexity and fatigue.
Economic Factors (Pay me 5 bucks now…. it’s cheaper!??)
Subscription-based models for software mean that individuals and organizations must continually assess the value they are getting from each tool, contributing to overall software fatigue.
All of these issues are impacting productivity, mental well-being, sales, security, and pose the question of the effective use of software technology resources. Couple this with generation technological knowledge gaps and global use differences, you could argue it decelerates human productivity. It’s time for a cleansing……a refresh of where venture capital is allocated, better return on investments and where we are looking for the next wave of innovation……
Why AI Needs Quantum Computing
The intersection of artificial intelligence (AI) and quantum computing is an emerging frontier that holds the promise of accelerated computations, enhanced optimization, and the ability to solve complex problems that are currently unattainable for classical computing systems. Here are key reasons why AI could significantly benefit from quantum computing:
Computational Speed (More power!)
Quantum computers, theoretically, can process multiple possibilities simultaneously, thanks to their fundamental building blocks known as qubits. This allows for exponentially faster calculations. Faster computation would enable AI algorithms to process complex tasks more efficiently and could lead to breakthroughs in machine learning models.
Solving Intractable Problems (Optimization!)
Certain computational problems, such as optimization and sampling problems, are computationally expensive or infeasible for classical computers but are more naturally suited for quantum computing. These types of problems often arise in machine learning, logistics, and data analysis.
Enhanced Machine Learning Algorithms (More gas!)
Quantum algorithms can be used to speed up linear algebra operations, which are fundamental to machine learning tasks. This could make training complex models more efficient, possibly leading to the discovery of new algorithms and architectures that are quantum-native.
Better Data Encryption and Security (Limits the eyeballs!)
Quantum computing promises superior cryptographic techniques, essential for secure data, which is crucial in AI applications where sensitive information is processed.
Energy Efficiency (Less digging!)
Quantum computations could be more energy-efficient for specific tasks, thereby reducing the carbon footprint associated with massive AI computations.
Uncertainty and Quantum Logic (No more wavering!)
Quantum computing naturally deals with probabilistic computation, a feature that is increasingly important in AI for handling uncertainty in decision-making processes.
Advanced Simulations (Know before you go!)
Quantum computers are inherently good at simulating quantum systems, which are complex and nearly impossible to simulate accurately on classical computers. AI algorithms that require such simulations for training or decision-making would benefit enormously.
The integration of quantum computing with AI holds the promise of solving complex computational problems more efficiently, enhancing machine learning algorithms, improving data security, and even addressing environmental concerns related to energy use. While we are still in the early stages of making this integration practical, the potential benefits could revolutionize the field of AI.
The Opportunity
Some organizations, venture funds, and companies are leading the way. Examples include organizations that fund dual-use technologies for government and commercial use. Many of these are “hardware” by nature, as they support defense organizations which put hardware technologies in the hands of warfighters and/or organizations supporting defense related activities. An example of this would be the Stony Lonesome Group who support Veteran owned and operated businesses selling technologies to the US government and commercial segments. Anything from drones to shoes to new medical kits. Another example includes hardware technologies like Sempre.ai who sells micro edge datacenter that are 5G EMP hardened. Very cool hardware technologies with practical use that address the needs of cities, states and nations. Additionally, Strangeworks is leading the effort in all thing’s quantum. They make it easier for people and organizations to access cutting edge quantum hardware.
Listed below are some broad areas which will explode in the coming years. Some are further along than others, but make no mistake, hardware will be king. Look at the latest earnings from chipmakers to old hat PC companies like Dell. The demand for hardware tech solutions which complement the prime use cases of software breakthroughs of the past decade create runways fit for the next decade.
The Tech Hardware Winners
Infrastructure: Significant investments are being made in data centers, cloud infrastructure, and telecommunications, particularly in 5G and beyond. Combine this with global government spending, you get a win for all.
Semiconductors: Due to the global chip shortage and the increasing demand for sophisticated processors, investment in semiconductor technology has surged. Supply chains are the largest headwind for this area. The length of time it takes to create efficient supply complicate the ability to access the power needed for the future. We are running out of compute power and we can’t build it fast enough.
IoT and Edge Computing: Devices that facilitate IoT and edge computing are drawing attention from investors. As the world and countries become more dependent on themselves, Edge and IoT hardware could be the benefactor. Bring everything closer to the people. Make it unique to that geography.
We are truly living in a unique time: the convergence of cutting-edge software and the breakthrough of new hardware to accelerate and balance the next decade.
I’m all in!
TJ