The computer industry's growth has slowed and prices have fallen faster than anticipated. Computer manufacturers such as Compaq, Hewlett- Packard and IBM are all reporting falling sales resulting in either losses or sharp falls in profit. Immediate measures range from salary cuts to job losses. For chip manufacturers the situation is even more serious and the measures taken more drastic.
Chips or semiconductors were once regarded as a licence to print money. Normally setbacks are minor in an industry set on a stratospheric growth path. However, the Asian economic problems have hit some of the biggest users of chips such as Japan and Korea. This has forced a fall in price of the 16Mb memory chip from pounds 36 in 1995 to 93p or lower. The result of this is the wholesale closure of chip manufacturing plants throughout the world. In the UK, the newly built Hyundai plant in Fife may never open, Siemens on Tyneside and most recently Fujitsu near Durham are being closed.
For the construction industry as a business, a serious problem in a formerly fast growing, very profitable client industry is bad news. However as a growing user of semiconductor-based products, we stand to benefit from falling prices and the increasing pressure on chip manufacturers to develop better, faster microprocessors and chip-based products.
The average desktop PC has now more power than is needed for most of its current work. Firms buying new PCs for power hungry applications such as graphics now use the machines these replace as the start of a process of cascading less powerful and older machines down the hierarchy of tasks. The really old machines end up in the skip, though a significant second hand computer market has emerged, offering adequate computing power at a very low price.
For firms at the leading edge of the use of IT, the continuing increases in power and memory allow new attempts to extract greater business efficiency. Available computing power has until now limited programs and their usage to a task by task basis.
The early dreams of heuristic computing have still to materialise but we may be starting to move in that direction. Move the cursor close to a circle and the computer could realise that you may want to draw a tangent and offers this as an option. And word processing systems can be programmed to recognise frequently used words from the first few letters. This could be infuriating in some circumstances, but in situations such as contracts and reports where particular words or even phrases recur with monotonous regularity it could be a real time saver.
As most firms move from standard PCs to networked computing, the scope to introduce management systems of all types based on who did what and when grows. The current interest in document management systems is based in part on this.
In short, those wishing to get better productivity gain out of IT will set out to invest in and exploit the greater power, memory capacities and communication opportunities. Those wishing to follow on can tick over for a little while with their current investment.
Ian Hamilton is managing director of the Construction Industry Computing Association.