I’m promoting a new business model: Whole Business Outsourcing (WBO). It’s the next logical step after Full Functional Outsourcing (FFO) and its successor, business process outsourcing (BPO). Here’s our value proposition:
A popular means to personal wealth is to start a company, create the illusion of success, then get rid of it for a large chunk of change, leaving the hard work of running it at a profit to someone else.
If you accept the popular-but-unsupported-by-a-shred-of-evidence proposition that businesses should “keep the core and outsource the rest,” it follows that for companies like this, everything except shareholder relations, the IPO process, venture funding, and selling the company outright (pick no more than two) must be non-core.
Which makes companies like this logical candidates for WBO.
Give me a call.
Some history: While the dot-com bubble (which by today’s standards constituted solid economic growth) didn’t invent the share-of-stock-as-the-company’s-real-product business model — WBO’s target market — it perfected it, and the model lives on in the dreams of modern entrepreneurs everywhere.
A decade before that, and the dawning awareness of the Internet that spawned it, we saw the invention of the personal computer. If it weren’t for this one device, the United States’ economy would be far smaller and we’d all be a lot poorer.
This history isn’t merely academic. It has a lot to say to proponents of Cloud Computing, its skeptics, and you.
First of all: With the PC came a burst of innovation whose best historical parallel might have been the first commercial availability of electrical power. Our modern software industry had its roots there: Even Oracle, the epitome of anti-personal-computing software architecture proponents, would at best be a marginal player had we continued on the old path of IBM defining the architecture and providing everything in it.
Also of interest: In the 1980s, when all this was taking place, technology entrepreneurs saw their road to affluence (while most dreamed of actual wealth, few expected it) to be running companies that sold and supported products.
What charming naiveté they had.
Here’s what the history of the PC has to say about The Cloud: If it succeeds, its success won’t come from companies migrating their computing infrastructures to it, for two reasons.
The first: It’s unlikely. The second: It’s undesirable.
It’s unlikely because migrating your company’s computing to The Cloud would be hugely expensive with little obvious payoff. Really, what would be the point?
Here’s why it’s undesirable: When looking at innovation for the PC platform, what stands out was that it was empowering, subversive, and actually innovative.
It was empowering: It created new capabilities that helped individual employees be more effective, and helped those who wanted to run their own lemonade stands compete with corporate giants on an equal footing.
It was subversive: By placing unregulated computing capabilities in the hands of ordinary end-users it let individuals and departments figure out their own solutions without having to ask centralized IT … or, for that matter, centralized layout and design, financial analysis, or anything else … for support.
It was innovative: Much of what the new software companies sold had never existed before: Electronic spreadsheets, personal databases and personal information management, presentation support … these were new ideas, not just old ideas ported to a new platform.
What the PC wasn’t, back then, was powerful enough to include in mainstream enterprise applications.
Compare this burst of creativity and simultaneous lack of enterprise readiness to The Cloud. It also isn’t ready for the enterprise. As for creativity, it isn’t there. Just the same old stuff, only hosted on the Internet. The same old stuff means The Cloud isn’t creating any new wealth, only redistributing it.
It’s time to stop promoting the idea that The Cloud will be disruptive by doing the same old stuff, only over the Internet on someone else’s hardware, platforms, and software.
The Cloud won’t be important until something in it surprises us.
Thus far, the recent Internet surprises haven’t been there. They’ve been YouTube, Facebook and Twitter, which aren’t even partly Cloudy.
And if you’re really looking for something nobody has ever thought about doing before with software … well, there’s an app for that.
What makes Steve Jobs interesting isn’t that he designs cool gadgets with awesome user interfaces. It’s that alone among the original PC pioneers, he remembers what allowed the PC revolution to create so much wealth. It was how it encouraged empowerment, subversion, and innovation.
You should too, because when you come right down to it, these are the core American virtues.
I’m promoting a new business model: Whole Business Outsourcing (WBO). It’s the next logical step after Full Functional Outsourcing (FFO) and its successor, business process outsourcing (BPO). Here’s our value proposition:
A popular means to personal wealth is to start a company, create the illusion of success, then get rid of it for a large chunk of change, leaving the hard work of running it at a profit to someone else.
If you accept the popular-but-unsupported-by-a-shred-of-evidence proposition that businesses should “keep the core and outsource the rest,” it follows that for companies like this, everything except shareholder relations, the IPO process, venture funding, and selling the company outright (pick no more than two) must be non-core.
Which makes companies like this logical candidates for WBO.
Give me a call.
Some history: While the dot-com bubble (which by today’s standards constituted solid economic growth) didn’t invent the share-of-stock-as-the-company’s-real-product business model — WBO’s target market — it perfected it, and the model lives on in the dreams of modern entrepreneurs everywhere.
A decade before that, and the dawning awareness of the Internet that spawned it, we saw the invention of the personal computer. If it weren’t for this one device, the United States’ economy would be far smaller and we’d all be a lot poorer.
This history isn’t merely academic. It has a lot to say to proponents of Cloud Computing, its skeptics, and you.
First of all: With the PC came a burst of innovation whose best historical parallel might have been the first commercial availability of electrical power. Our modern software industry had its roots there: Even Oracle, the epitome of anti-personal-computing software architecture proponents, would at best be a marginal player had we continued on the old path of IBM defining the architecture and providing everything in it.
Also of interest: In the 1980s, when all this was taking place, technology entrepreneurs saw their road to affluence (while most dreamed of actual wealth, few expected it) to be running companies that sold and supported products.
What charming naiveté they had.
Here’s what the history of the PC has to say about The Cloud: If it succeeds, its success won’t come from companies migrating their computing infrastructures to it, for two reasons.
The first: It’s unlikely. The second: It’s undesirable.
It’s unlikely because migrating your company’s computing to The Cloud would be hugely expensive with little obvious payoff. Really, what would be the point?
Here’s why it’s undesirable: When looking at innovation for the PC platform, what stands out was that it was empowering, subversive, and actually innovative.
It was empowering: It created new capabilities that helped individual employees be more effective, and helped those who wanted to run their own lemonade stands compete with corporate giants on an equal footing.
It was subversive: By placing unregulated computing capabilities in the hands of ordinary end-users it let individuals and departments figure out their own solutions without having to ask centralized IT … or, for that matter, centralized layout and design, financial analysis, or anything else … for support.
It was innovative: Much of what the new software companies sold had never existed before: Electronic spreadsheets, personal databases and personal information management, presentation support … these were new ideas, not just old ideas ported to a new platform.
What the PC wasn’t, back then, was powerful enough to include in mainstream enterprise applications.
Compare this burst of creativity and simultaneous lack of enterprise readiness to The Cloud. It also isn’t ready for the enterprise. As for creativity, it isn’t there. Just the same old stuff, only hosted on the Internet. The same old stuff means The Cloud isn’t creating any new wealth, only redistributing it.
It’s time to stop promoting the idea that The Cloud will be disruptive by doing the same old stuff, only over the Internet on someone else’s hardware, platforms, and software.
The Cloud won’t be important until something in it surprises us.
Thus far, the recent Internet surprises haven’t been there. They’ve been YouTube, Facebook and Twitter, which aren’t even partly Cloudy.
And if you’re really looking for something nobody has ever thought about doing before with software … well, there’s an app for that.
What makes Steve Jobs interesting isn’t that he designs cool gadgets with awesome user interfaces. It’s that alone among the original PC pioneers, he remembers what allowed the PC revolution to create so much wealth. It was how it encouraged empowerment, subversion, and innovation.
You should too, because when you come right down to it, these are the core American virtues.
For Management speak consideration:
“Is this the hill you want to die on?”
Meaning: Reasonable arguments are meaningless as long as I have the power to get you fired.
(By the way, when this was said to me, my response was “I don’t know, is this the hill you want to kill me on?”
Kind of made the speaker look a little melodramatic…)
>>The Cloud isn’t creating any new wealth, only redistributing it …
These words, with or without the cloud, typify our present time: wealth isn’t being created, it’s merely being redistributed and generally being concentrated. Which is why “WBO” is the ‘in-thing,’ even if Bob just made it up yesterday.
Once again, you have nailed it. The “Beauty” of the “IBM Model” was that your knowledge and skills had near-infinite life. The “Beast” was that it was impossible to fix, improve, or change anything without an act of god. . . . I fondly remember when someone brought their Comodore 64 in from home, and wrote an app in a few days, that had been languishing in D.P (currently called I.P. or MIS). It saved thousands in overtime EVERY MONTH. “D.P.” has been trying to regain the monopoly ever since.
The cloud’s low entry cost makes it easier to commercialize innovative ideas. 30 years ago my B-school professor started a company. He sold consulting until he accumulated enough capital to rent and run a computer room, start filling it with hardware and pay staff to keep the boxes running. I was there for several years.
30 years later, he started another company. This time he needed enough capital to pay Amazon ECC hourly rates for a small server image. He rented a second, slightly more powerful server to run the beta. They upgraded that server for the public announcement. Hardware purchases were limited to laptops for developers until they bought a Mac Pro to run booth demos at a trade show – it was far less expensive than a temporary broadband connection. BTW, my son-in-law works for him now.
The cloud’s lower cost & finer granularity – you can’t rent ready-to-run physical servers by the hour – are allowing new kinds of wealth creation. You’ll also see destruction in cases where organizations still consider their massive data centers an effective barrier to competition.
Perhaps I’m mixing SAAS with the cloud, but I doubt I’m the only one. The real innovation in the cloud will come from small players that can now offer services competing with very expensive enterprise software packages…and they’ll be running in “the cloud”. Back in the 80s, if a few people wanted to subvert the ordained IT processes, they brought in a PC and put the software on it. This required a pretty good outlay of cash and it was hard to miss a PC when you walked past it on a desk. Now, if a department wants to do the same thing, they simply whip out the credit card and subscribe to whatever service they need. IT has already given them everything they need for this – a PC with a browser and access to the Internet. Access to this service is cheap and nearly invisible…about as subversive as you can get without being a criminal.
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Yes, I remember when PCs (Macs and IBMs) were open. And the minute that happened, the IT types instantly, once they realized that it meant that they might not be in CONTROL any more, started to find any and all possible ways to LOCK THEM DOWN! That war was pretty bloody and the central IT staff mostly came out on top. Nobody could install software anymore because it was too dangerous. Mostly, it was too dangerous to the IT staff’s job security.
Actually, I’ve been through this several times. The cycle just keeps repeating.