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December 07, 2005
One of the many things low on my to-do list (right down there with blogging more often) is to do more to promote the gospel and reasoning of Nick "IT Doesn’t Matter” Carr (he uses the less definitive "Does IT Matter?” when trying to sell books to swing audiences). His argument is that since technology is now widely available to any company, there is no sense using it for competitive advantage. This reasoning drives technology people crazy and often results in incoherent sputtering in response.
My view is the democratization of technology is something to praise, not bemoan. I’m not sure anything provides sustainable competitive advantage over the long term and there isn’t a lot of history to suggest technology ever did. Technology, like anything else, is a "what have you done for me lately” input. But I’ll leave it to others to have that argument. I’m more interested in how this reasoning might be applied in other areas. I’ve been toying with doing a couple articles for the Harvard Business Review in this vein.
- One is "Brains Don’t Matter”. After all, everyone has a brain, so why bother to think? If you come up with a good idea, someone else will see it and copy it, so why waste the time and energy?
- Another is "Food Doesn’t Matter” for the restaurant business. Everyone has access to the same raw ingredients, so why bother trying to differentiate yourself on the quality of the food you prepare. Instead, focus on more sustainable advantages like parking, cushy chairs, napkin quality and maybe a nice view. You can outsource the food preparation to a local pizza place that has economies of scale. And in the long run, of course, visionaries tell us we’ll move to the Utility Food™ model where every restaurant has a pipe that just pumps in Soylent Green or whatever. You may laugh, but this Utility Food™ model is being tested today.
(That was a long way to go to get that last link in, but the alternative post of "My jokes are coming true” needed more context).
Wired: What's left for PCs?
Carr: They're turning into network terminals.
Wired: Just like Sun Microsystems' old mantra, "The network is the computer"?
Carr: It's no coincidence that Google CEO Eric Schmidt cut his teeth there. Google is fulfilling the destiny that Sun sketched out
Me thinks poor Nicholas Carr made a request for a wireless mouse 7 yrs ago and the mean ole IT department at his company turned him down on account of budget constraints...
Try working with legions of people who can't even remember their passwords, much less service their own issues.
Set aside the emotions engendered by Nicholas Carr's writings. The author of the infamous "Does IT Matter?" spoke at Search Engine Strategies in New York this week and raised a number of cogent issues that should be keeping IT managers and CIOs awake at night.
His provocative assertions had little to nothing to do with the topic of the conference, and much of his talk was a rehash, albeit a compelling one, of his latest book, "The Big Switch."
But give Carr his due. He did a solid job of laying out some economic and technology trends that could ripple through the IT industry. Here's a list of what I thought were his most thought-provoking points; I hope you'll weigh in with feedback if you agree or disagree.
- 70% of IT labor is currently dedicated to upkeep, while 30% is focused on business issues. If true, it's a bit frightening, but experience suggests the real number could be that high -- if not higher. What's the IT time breakdown look like in your company?
- About 45% of corporate capital investment goes to computing infrastructure. For the record, he went on to say this isn't inherently bad, but he argued if the IT investment can be brought down (in part by the cloud computing model he argues is all but inevitable), it would free capital for investment in goods that directly impact the company's primary line of business. Is 45% of capital investment for IT/computing about right in your company? Should the figure be that high? Will cloud computing bring that figure down?
- Now that we're on the verge of being able to deploy computing in a utility-like fashion, the network really has become the computer, as Eric Schmidt and Sun Microsystems (NSDQ: JAVA) presciently asserted way back in the early 1990s. Do you agree with Carr's assessment that computing is mature, accessible, and reliable enough to deploy broadly on a utility basis?
- The market penetration and reach of small, lightly staffed companies that successfully leverage the power of the Internet to maximize their impact (think Skype, YouTube, and others) raises the specter of what Carr calls the "worker-less" company. That is, the most successful and profitable operations could ultimately be one or two-person shops with no office space, virtually no infrastructure, just a person with an idea that spreads like crazy on the Internet. He acknowledged this is a scary prospect for our economy. "We could see a hollowing out of employment in many sectors of the economy," he says. What do you think this means for the future of technology expertise as embodied in IT workers?
- Consumer software's success or failure will be measured less by units sold than by usage, and the ability of the software's developer to monetize the attention of those using the software. He pointed to examples such as the financial tools site Mint of how the economics and dynamics of power are changing. If he's right on this, what do you think it means for vendors like Microsoft (NSDQ: MSFT) and Oracle (NSDQ: ORCL), who still make loads of money on licensed or packaged software?
Worker-less company. Yeah, I'd like to see that. Such a model may work for free entertainment sites like youtube and what not, but general business who are taking money from customers require people to do work. A company needs people to create products, perform marketing, R&D, handle compliance (IT and NON IT), create financial reports and measures, collect or issue payments, perform QA on the product, perform customer support, shipping, HR, and so on. Sure, you could outsource some or all of this but then, how effective will your compay be?
I'll tell you how effective. Go and try calling your customer support for your cable, or phone, or whatever. Now, take that horrible experience and apply it to every single department. What if your vendors had to call your outsourced AP people to get payment an the outsourced AP people were as dismal as current customer services people are in a foreign country? My last place had their AP offshore....... and vendors eventually refused to send us raw materials because the bill's were not being paid. Yeah, great model, lets do more of that. Hard to make a product without raw material.
I heard all about this virtual corporation back when I received my first masters degree in 1994. Maybe it fits a few niche areas but generally, it does not fly. Maybe this numbskull blowhard Carr should stick with something he knows because he obviously has never worked in an IT position at a company.
In fact, I think he planned his entire career around putting forth and publishing absurd and retarted ideas, once after another. Stop buying his works of fiction and ignore him and force him to get a real job. Then, after he has walked a mile in our shoes, lets see him spew forth his pack of lies, half truths, and other hair brained ideas.
"This is like advising the Indians in the 1800s that you don't have to invest in rifles. Just wait 10 years and those rifles will be a lot cheaper."
if you treat IT as a commodity, then you will use it as a commodity to little advantage.
JOHN M WILLIS BLOG
The biggest threat to the Internet as we know it may be developing out of the very reason why the Internet has been so successful. The focus of Net neutrality has been primarily on keeping the access network providers from getting too much control, but we may be risking the creation of a more fearsome monster in the cloud computing market.
If we imagine a true computing cloud, a virtual data center with a million or more host systems linked in some way, with literally trillions of bytes of online storage, where is the information we're looking for? Today, that place is usually a data center somewhere, a fixed location with a fixed address, but would it have to be? It doesn't matter as long as the "cloud" can somehow find it, somehow get some processing and information storage linked to our information needs.
From the perspective of the user, cloud computing could be applied seamlessly to pretty much any Internet experience -- without changing anything about how the browser interacted with the cloud/Internet. But inside the "cloud" the protocols and processes could look totally different. We have to distribute work, link processes to data, and link both data and processes to the users who have made the requests for service in the first place.
Sure, we could use TCP/IP and other Internet protocols, but IBM Corp. (NYSE: IBM) could also build clouds out of things like mainframe channel extension over fiber, and Microsoft Corp. (Nasdaq: MSFT), Google (Nasdaq: GOOG), and Amazon.com Inc. may have their own visions. Might the "Internet of the future" be something that looks like the Internet of today only in the way users get access to it?
We should care a lot about this, because the "giant cloud" vision of the Internet is probably not an alternate Internet architecture for all to play in, but rather an alternate Internet business model that favors only the giant players. It doesn't take a computer scientist and a VC to create a Website, but it darn sure takes a bunch of both to create a computing cloud. You could host your site and applications in somebody’s cloud, but how they work and what it costs you are now under their control. The notion of a cloud-computing-based Internet is the notion of an Internet that's tilting toward the very large players.
Gee, isn't that what's also happening in broadband access and mobile Internet? The capital cost of laying fiber to deliver wireline broadband or buying spectrum and deploying cell towers for wireless broadband keeps even some giants like Google out of the access market. Suppose the cloud guys and the access guys get together? Could we end up with an "open Internet" consisting of a dozen major providers, and if so, how "open" would it be? Some of these questions have now been raised in the Net neutrality debates, so the problem is real.
Bits are getting cheaper every year and there is no shortage of equipment vendors or new technologies to keep that trend moving forward. Content is another matter; that’s where the real money is. Wrap content deals in cloud technology, create some access partnerships, and you could create an "experience industry" that has more power than the current Hollywood studios or TV networks or search engines because it could be the sum of them all.
Standards won’t help protect the openness of this new “cloud space.” There’s an Open Grid Forum, but it doesn’t really guarantee that the cloud, or grid, will be as “open” as the Internet. Somebody needs to do that before we make a truly transforming change in how the Internet works.
— Tom Nolle, software engineer and founder of CIMI Corp.
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