Jan 2, 2019 · 32m · a16z
a16z Podcast | The $200 PC in the Enterprise
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of the a16z podcast, Benedict Evans and Steven Sinofsky analyze the structural shift in enterprise computing from traditional PC hardware to lightweight web terminals, mobile endpoints, and cloud infrastructure. Drawing on labor statistics and historical parallels with IBM mainframes, they examine how decreasing hardware demands and rising IT management costs are reshaping the future of enterprise software.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 6.2 Guest teaching 4.3 Guest disagreement 1.8 The host pushing back 2.7
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 25:40 Pushing back on Microsoft replaceability
Sinofsky explicitly rejects Evans' thesis that Microsoft is easily replaceable compared to IBM mainframes, defending the ongoing platform lock-in of Office and legacy enterprise code.
Hardest push from the host ▶ 12:10 Dismissing the power user objectionEvans reframes the objection that workers need full PCs by relegating heavy Excel and IDE users to a tiny 5 to 10 percent legacy tail.
Biggest teaching moment ▶ 15:03 Gartner TCO and IT cost shiftingSinofsky educates on how Gartner's Total Cost of Ownership metric exposed the hidden $40,000 annual IT overhead behind cheap $1,500 PCs.
The host holds their own ▶ 18:06 Highlighting Chromebook's architectural paradoxEvans demonstrates sharp platform analysis by pointing out that adding local Android apps to Chromebooks destroys their core value proposition of stateless simplicity.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| The Flattening PC S-Curve and Web Transition | 7 | 2 | 1 | 1 | Evans demonstrates strong subject expertise by drawing historic parallels to piston aircraft, citing Marc Andreessen quotes on Netscape, and detailing the timeline of Ajax and web apps. Sinofsky agrees and builds on the historical context of web standards, creating a collaborative discussion. | |
| Enterprise Software Portfolios and Thin Client Workloads | 6 | 4 | 1 | 3 | Evans interjects to reframe what typical enterprise employees actually do on PCs, arguing that most workers do light data entry rather than heavy modeling. Sinofsky shares deep insight into CIO portfolio management across thousands of fragmented apps and healthcare IT systems. | |
| Labor Statistics and the $200 Enterprise Terminal | 6 | 5 | 2 | 3 | Evans actively matches Sinofsky's Bureau of Labor Statistics analysis with his own research on historical job categories, while pushing back against the idea that full PCs are necessary for most desk workers. The dynamic remains friendly with light banter over 1990s tech missteps like Larry Ellison's NetPC. | |
| IT Ownership Costs and Chromebook Architecture Trade-offs | 6 | 5 | 1 | 3 | Evans presents sharp structural analysis regarding the paradox of Google putting local Android apps onto Chromebooks, which ruins their stateless advantage. Sinofsky provides extensive background on Gartner total cost of ownership models and spreadsheet unbundling. | |
| Mobile Consumerization and Platform Leapfrogging | 5 | 4 | 1 | 1 | Evans sets up hypothetical enterprise workstation scenarios and brainstorms HDMI stick form factors for Google Chrome. Sinofsky outlines how consumerization of IT and mobile workflows create tension between web and native mobile development. | |
| Legacy Ecosystems, Microsoft's Position, and Future Predictions | 7 | 6 | 5 | 5 | Evans challenges Microsoft's enterprise moat, asserting that web-only clients make Microsoft entirely replaceable unlike IBM's legacy mainframes. Sinofsky directly pushes back, pointing to massive legacy COBOL systems and the deeply entrenched Office/Win32 ecosystem. |
Statements from this episode (16)
Sinofsky: IBM beat S&P 500 by 7x post-mainframe peak
“And if you just use the stock price measure, which obviously has all the other variables associated with it, but it actually, IBM beat the S&P 500 by seven X over that 20 year timeframe on the back of a dead mainframe.”
Evans: UK VAT tax system still runs on legacy DEC VAX hardware
“Yeah, I mean, the best example I've heard of this is that the UK VAT system, the UK value-added tech system runs on VAX, created by DEC, which I think discontinued it before many of the people listening to this podcast were born, and yet that system is still s…”
Sinofsky: PCs could enter their most profitable 20 years post-peak
“Yeah, and so, so we're in this space now where it could very well be that the PC sees its most profitable 20 years, but yet the least number of people thinking about it, or worried about it, or investing in it, and the least amount of change.”
Sinofsky: Intel has shifted focus away from core PC chips
“Intel has very, you know, has announced, like, they're not even focused on PC chips. Like that it's about the data center, and it's about IoT and VR and a bunch of stuff, but not, not like core i-seven, the next generation.”
Evans: Enterprise Web Application Transition Took Two Decades
“It took 20 years for it to really become a thing for all of those enterprise apps to move.”
Sinofsky: Most enterprises have moved nearly all applications to browsers
“And so now what's happened is we've reached a point where most enterprises have moved all of their applications, except for very, very few, to the browser.”
Sinofsky: 85% of major hospitals use Epic or Cerner EMRs
“You look at, you go to a big metropolitan hospital, and there's an 85% chance they're using one of the two EMR systems from either Epic or Cerner.”
Sinofsky: There are roughly 600 million business computers globally
“There's about six hundred million business computers in the whole world, and so if you look at the U.S., there's probably about a hundred million,”
Evans: Chromebooks realize Larry Ellison's 1990s Network Computer vision
“To me, a Chromebook is exactly what Larry Elson was trying to do 20 years ago. I mean, technically the architecture might be different. It's exactly the same thing. It's a web browser that runs client, that runs applications over the network.”
Sinofsky: Operating an on-prem data center costs 10x more than AWS
“People complain about AWS pricing, but the flip side of it is like running a data center yourself is 10 times as expensive.”
Evans: Adding Android apps to Chromebooks undermines Chrome OS advantages
“Putting Android apps onto Chromebook is kind of paradoxical because you turn it back and suddenly you don't have the advantage that Chrome has over Android anymore.”
Evans: Google should make Chrome HDMI sticks for enterprise computing
“That's what I think Google should be doing with Chrome. They should be making HDMI sticks.”
Sinofsky: Enterprises will focus mobile development on a single platform
“I actually think people are underestimating the desire for mobile. And because mobile is two big platforms, you're going to start to see companies invest much more in one of the two. Because that'll be the only way to really deliver on this.”
Sinofsky: One US government branch relies on 7M lines of COBOL
“We met with a government agency this week, and they have one application for one branch for one scenario with seven million lines of COBOL code.”
Evans: 90% of enterprise PC users do not need desktop PCs
“There's a sort of a core part of the PC market that actually needs to be on a PC, because you're running Excel, or you're running Photoshop, or AutoCAD. And the other 90% of it actually doesn't need to be on a PC. It can be on a Chromebook, or it can be on som…”
Sinofsky: Power desktop app user counts will plateau as cloud surges
“The number of people that are going to build Excel models isn't going to increase or run Photoshop or AutoCAD. But the number of people communicating with them and coordinating and vendors and things like that, that are going to be cloud-based is going to go u…”