The Economist just ran an article on less powerful computers becoming more attractive due to the recession and because more services are available online. This might hurt the computer industry. Well, not entirely true. While a “regular” consumer may indeed find a slower netbook laptop good enough, a corporation putting slower machines on its workers’ desks will have to invest in reliable networking and faster servers to carry the extra computational load. So, computing services will still have to be paid for either through direct hardware investments or by paying service providers such as salesforce.com and Amazon EC2. The right question is whether there is a net savings in IT expenses by investing in faster servers instead of desktops. And the impact on the industry should be viewed in the same way, since having the new arrangement of servers doing more and desktops doing less may give rise to new and unexpected opportunities.
ps: a personal example of where less is indeed more is this dishdrawer. My wife and I hardly used the full-size machine we had before, but we’re finding this tiny appliance fills up quickly enough that we actually use it.
Core Economics 
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