Cloud vs. Tablet: Expect Constant Change

NEW YORK (TheStreet) -- Since I was at New York's Massapequa High School 40 years ago (Go Chiefs), computing has been defined by a struggle between the center and the edge.

Mainframes were the original center. Minicomputers plugged in a wall and could be deployed at the edge, at a business location. Terminals quickly defined a new edge, then PCs became a center. In the late 1970s, my neighbor bought a CP/M PC for her home, with four terminals sent to employees for transcribing court records.

So it has gone, faster and faster. PCs became clients to larger servers in closets. Some PCs became thin clients, but others became thick Windows boxes. Then the Internet made every PC an edge machine. By 1998, I was the system administration for my kids' network.

The rise of devices, of tablets and phones, has marked another fundamental change in our time. Apple (AAPL) devices are defined by the lack of a keyboard, a mouse and any moving parts like hard disks, even DVD drives. The edge may be powerful, but it's still an edge.

And the cloud is a new center. Clouds compress the cost of a data center; meaning, you can build bigger ones, and more of them. What Google (GOOG) and Amazon (AMZN) are building are not individual clouds, but networks of clouds. Most of what they do replicated in many places, allowing them to deal with ever-more sophisticated edge devices.

All this brings the key question of computing evolution back to device makers, who naturally are divided on the issue:

• Apple sees the device as being like a PC. It should command high margins with software, content and other ecosystem component profits secondary.
• Amazon sees the device as a terminal. The money should flow from commerce controlled from the center. We'll practically give away razors in order to sell blades.

Google's low-priced Android strategy seems most like that of Amazon, while Microsoft's (MSFT) Windows 8 strategy seems more like that of Apple. Both, of course, have their own tweaks, and both have effective clouds through which they hope to control what people buy, where they buy it, and at what price, from the growing center.

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