Walkman or Betamax?

Sony Corp. last month uttered the magic word “network” to transform itself from a yesterday company into a tomorrow one.

Sony decided it has to recreate itself to be ready for what it calls “the network-centric society of the 21st century.” It remains to be seen if this new Sony will follow the path of innovation that led to the Walkman or the path of obstinateness that produced the Betamax.

Sony has reorganized its electronics divisions into four new business units: Home Network Company; Personal IT Network Company; Core Technology and Network Company; and Sony Computer Entertainment. Seems the company likes this network thing, considering only the computer games group does not have the word network in its name.

Each of the business units will be largely autonomous, with local authority and separate research and development labs.

A major electronics company jumping on the digital network bandwagon is not all that special during these days of near-religious fervour over the idea of the convergence of voice, video and data via the Internet.

But Sony seems to be marching to a different drummer — one that may well be playing the original Internet tune.

As an article in the March 7 New York Times noted, Sony’s biggest competition on its new path is Microsoft, which has defined local networking in corporate America.

In the past few years, many people have called Microsoft the “new IBM.” One part of IBM’s old view of the world was there would be only one computer of any importance in an organization — the IBM mainframe. In IBM’s model, all other computers — if there were any — would be subservient to the mainframe.

Today’s PCs are as powerful in most dimensions as the IBM mainframes of a few years ago, and Microsoft seems to have the same model in mind that IBM did. A computer running a Microsoft operating system, Windows or Windows CE, will be a mini-mainframe acting as the broker of services in the home.

This type of intermediary breaks the Internet model’s most basic feature — applications reside in the edges. Simply running them enables new applications. In the IBM/Microsoft model, the controlling computer brings applications to you.

Sony is following the Internet path. The company describes a continuation of the Internet peer-to-peer model with dozens of network-based appliances communicating without help from a PC.

My heart rides with the big guy here – Sony’s revenue is 3.5 times that of Microsoft — and with the Internet model that lets me plan my own future.