The innovation of intangible things dependent upon tangible things has been the model for computing as a whole, practically since the Univac 1 hit the scene. Software - from word processing, to spreadsheets, to printer drivers, to web browsers, to java apps, and virtual machines - all intangible intellectual property innovation that was dependent on tangible things to be created, operate, and add value too. Key boards, green screens, motherboards, video cards, speakers, you get the idea.
On thing that I have been spending a great deal of time thinking about is which side of the equation - the intangible or tangible - will be cannibalized first?
We have seen the convergence most noticably in electronics. remember when you had to have a turntable, casette (reel to reel or 8-track), amplifier, and radio tuner to have a 'stereo' system? Then it was CD's and now the CD to mp3 (or other digital format) to just 'music' is happening. The battleground there is on the format which is a pissing contest that no one wins in my opinion. Why? Because there is someone who can think more creatively than the developer whose creativity was used up to create the format to make an interpreter/conversion intangible to make it all work.
The intangible side of the equation has seen it share of cannibalization (aka M&A) where entire companies who created a software program or operating system are now simply features in a larger 'suite'. Think widgets, apps, and all of the other components that get stitched together to make a new intangible thing in the 'cloud' as an example.
So if I think about all of the noise, innovation, branding, positioning, and other terms used to descibe the marketplace, two groups of tangibles are the veneer of all the intangibles - the source point and the end point.
In essence I am starting to believe that the endpoint (mobile device, tv, tablet, other) and the sourcepoint (data center) will be the only things that matter in the market. The UI will be embedded in the endpoint, the sourcepoint is all zeroes and ones to get from the sourcepoint to endpoint. People (consumers/viwers) could care less about the OS, the application used under the covers, or anything else intangible. I think Apple gets this (I am NOT an Apple fan at all BTW) better than most, however the sands are shifting and Apple is losing market share to Google daily. While Apple and Google have both built endpoints and massive scale data centers, Apple continues to offer a Blackbox of an OS, and other apps, and alienate Adobe and other platforms. Microsoft has tried this for years - and they don't own the endpoint and have some data centers for their Live apps but nothing as established as what Apple and Google have. And Microsoft loses market share every day as well - even on the desktop.
So as the next step in the evolutionary process I can't help but think that things will converge - and in the process the perception of what is vital will change right along with it and distill down to data centers (sourcepoints) and devices (endpoints).
Content will be the fuel for the convergence - and the innovations in the presentation of content will drive evolution at the endpoint. Because of this, the sourcepoints will be more reliant upon network density for cost effective distribution, with latency being the key variable. We are already seeing this with Facebook and Apple leasing and building sourcepoints, and with recent announcements by Dell to build 10 new sourcepoints, I will say that businesses who can own both the sourcepoint and the endpoit are making investments in owning both ends of the content consumption chain.