Amazon launched its new Kindle Fire tablets---including one starting at $159, an 8.9-inch model checking in at $299, and a 4G LTE wireless model for $499 ---and while CEO Jeff Bezos talked up Wi-Fi antennas and other hardware specs, the overall theme is that the gadget is dead. Long live services.
If Bezos ambitions with the first Kindle Fire were obvious---it's just a vessel to deliver Amazon's video, music and shopping services---now it really bonks you over the head.
The model is simple: Price the tablets and e-readers aggressively and make dough on the back end ecosystem. It's not rocket science, but others can't match Amazon. Google certainly can't match the services. Apple has the ecosystem, but frankly is more about the hardware.
Amazon flips the model and it was almost comical how Bezos talked up specs on the Kindle Fire a bit, but then noted those details don't matter.
If you play this Bezos vision thing out a bit more it's probably just the beginning of the hardware irrelevancy movement. On the consumer side, it's obvious that smartphones and tablets are all starting to look alike. They're all sharp for the most part. All that matters, however, is the content and the apps with a dash of ease of use.
My hunch is that this services replacing hardware theme will play out higher up on the food chain too. Note how IBM's latest mainframe includes built-in analytics to monitor performance and spot issues. It's the first step to self-healing systems.
VMware talks about the software defined data center. Rest assured that HP, Dell and a host of others are going to meld hardware with cloud services.
And then there's the appliance game that Oracle is trying to play. Exadata boxes are just a vessel to collect software maintenance revenue. Exadata boxes are a wee bit more expensive than a Kindle Fire, but the model isn't all that different.
Hardware will come with services up and down the technology food chain. All Bezos is doing is speeding things up a bit and being a lot less subtle about the fact that services will always trump hardware going forward.