Robert Cringely writes:

It is an interesting idea, essentially giving away hardware in exchange for signing long-term service agreements, trading hardware margins for service margins. I hope it works, really, but I doubt that it will. And the reason it is likely to fail is Schwartz's glib lack of understanding of his own people, who will tend to resist this change even if it means the death of their company.
...
Applications can be moved to faster servers, to multiprocessor servers, and ultimately to clusters of servers working together. But unless your application was designed to be distributed, the return in added application power from each added processor decreases until at eight processors or so it often isn't worth adding any more machines to the grid. Google can do it, sure. Google can cooperatively run tens of thousands of servers, dividing among them a single task, but what makes Google different from you or me is that company's 1000+ computer scientists who built the massively distributed system and keep it running.

Where's Googlization for the rest of us? It's called Appistry.

Forbes writes:

The advantages of the Cheap Revolution are so compelling that nothing is likely to thwart this shift--and this time customers themselves are leading the pack. The history of high tech is marked by three big waves. First came mainframes, which ruled in the 1950s and 1960s. They began to give way in the 1970s to the second wave: less costly midrange minicomputers. By the late 1980s minicomputers were being pushed out by the third wave: networks of pcs and Unix-based servers. Each iteration wiped out past leaders and created new giants. Amdahl all but vanished when mainframes collapsed; midrange makers Digital Equipment Corp. and Data General rose to take its place. Then Digital and Data General were wiped out by the likes of Compaq, Dell and Microsoft in pcs and Sun Microsystems in Unix servers.

Now comes the fourth wave, as computing costs ratchet down yet again. Sun Micro and other purveyors of proprietary designs were immune to the threat for years because off-the-shelf chips from Intel and amd weren't yet strong enough to compete head-on. But today's PC microprocessors, lashed together by the dozens, cheaply outgun the specialized chip engines that powered Sun, SGI and others. Linux, the MySQL database and other low-cost open-source software, first created by amateurs, have evolved at Internet speed and are now polished enough to rival products from Microsoft and Oracle. Systems assembled with these elements cost 90% less than last-generation systems, yet can run faster and are more reliable.