In our ongoing series on technology that has gone the way of the dinosaur, this week Polaroid announced the demise of the instant camera with the closure of the manufacturing:

Yesterday, the company behind the iconic instant camera announced it was to stop making the film used by Polaroid enthusiasts, because there is no longer a market for it.

Three factories will close in Massachusetts, Mexico and the Netherlands, resulting in 450 job losses. The company stopped making the cameras for commercial use in 2006 and halted production of the consumer models last year.

If you don’t remember the Polariod One Step Camera you can see it here:

[youtube url=http://www.youtube.com/watch?v=XMvPUx0B_V0]

Although they did not know it at the time, the release of the digital camera resulted in the the demise of consumer film camera and the instant camera in particular. The first digital camera was created in 1975 but it wasn’t until 1990 that consumers saw the first consumer digital camera, the Dycam Model 1 (which was also marketed as the Logitec Fotoman). By then the fate of the instant camera was sealed.

[Photo Courtesy of Digibarn under creative commons]

Each time the manufacturers of these products failed to see the shift in technology resulted in consumer tastes changing. The digital camera fulfilled the needs of the consumer even though quality from digital cameras was less than nitrate film. The gratification and ease of use was more important. The same too with the transition from vinyl to compact disc and from cable based diggers to hydraulic based diggers (See Christensen).

Gartner released it’s report “Key Predictions for IT Organizations and Users in 2008 and Beyond” this week. Aside from the greening of the enterprise, one particular prediction stood out:

By 2011, Apple will double its U.S. and Western Europe unit market share in Computers. Apple’s gains in computer market share reflect as much on the failures of the rest of the industry as on Apple’s success. Apple is challenging its competitors with software integration that provides ease of use and flexibility; continuous and more frequent innovation in hardware and software; and an ecosystem that focuses on interoperability across multiple devices (such as iPod and iMac cross-selling).

This prediction is less about Apple and more about Microsoft. Basically innovation in and on the Windows platform has stalled and it took Apple to show just how bereft of real progress is on the Windows platform. Vista’s luke warm reception can be directly traced not only to the lack of genuine lack of innovation but the complex pricing model with 5 basic variants of essentially the same piece of software. This is classic monopoly behavior where anemic organic growth in revenue must be goosed with un-consumer friendly pricing models.

Secondly Microsoft are worried that if Apple reaches the psychological 20% market share barrier, it will result in a defection of a large group of developers towards an alternative platform. The developer community is a key barrier to entry in this particular monopoly. Just like presidential candidates momentum is very important part of the game.

Which leads us to the reason for the Yahoo bid this week from Microsoft. Microsoft (Balmer et al) after 10 years have recognized that their web based initiatives (read MSN) have failed and there is no realistic future for MSN in it’s current state. Indeed the new initiatives under the headline “Windows Live” has resulted in lost search share. Microsoft feels that it has indeed lost the search (read embedded advertising game) but has a chance with Yahoo to make a difference.

However the Yahoo bid is more about the limited options that Microsoft actually has to grow it’s business. The share market has been unresponsive to Microsoft largely because it has been unable to move beyond the Windows franchise and it’s enormous war chest has been unable to position itself into the future. The merger of Yahoo will be in attempt to radically change a business that basically has not changed in 25 years.

My prediction that if the merger is approved then the Yahoo business will stay quasi independent and the MSN group will be fed to the crocodiles. This way they can claim success in the web business without overtly showing the world they wanted to get rid of it. If this is correct then the entertainment business led by the Xbox group and include the mediocre will be “spun out” into an independent group followed by business solutions. The trick is to split the company up without looking like it is splitting the company up and turn the company into a conglomerate with independent operating entities.

Which leads to another prediction from Gartner:

By 2012, 80 per cent of all commercial software will include elements of open-source technology. Many open-source technologies are mature, stable and well supported. They provide significant opportunities for vendors and users to lower their total cost of ownership and increase returns on investment. Ignoring this will put companies at a serious competitive disadvantage. Embedded open source strategies will become the minimal level of investment that most large software vendors will find necessary to maintain competitive advantages during the next five years.

The realities of 2008 are not the realities of 2000. 2008 is characterized by the fact that open source is not going away and will form a significant part of the IT business going forward. What this means is that the environment that the business solutions group faces is not a homogenous Windows future but a hetreogenous future of Linux, Unix, Oracle, DB2 among others.

I would argue that the view from Year 2000 was predicated on Microsoft SQL Server being the defacto standard for business solutions, which has not come to fruition. The limited success of the business solutions group must frustrate Balmer et al no end and that it needs some room to succeed.

Microsoft is at a cross roads. Gates is leaving full time employ, and Balmer is tasked with preparing the future, a future where Windows is no longer the linchpin in the IT industry, but one of a number of solutions in the market place. The 2000 vision of a homogenous desktop and server market is dead and the ability of Microsoft to wield it’s Windows hammer has long gone.

These are most interesting of times……