All Posts in Technology

|In: Cloud|Last Updated:

Nicholas Carr has a new theory — that internal IT is reaching the end of the line, because information technology will follow the same commoditization curve that electrical utilities followed a century ago.

Okay, it isn’t really a new theory, although from the attention Carr is getting for his new book, which should have been titled The Joys of Griddish but instead is called The Big Switch: Rewiring the World, from Edison to Google (W. W. Norton, 2008), you’d think he had come up with it all by himself.

Carr, you’ll recall, previously theorized that IT doesn’t matter (“We ain’t there quite yet,” Keep the Joint Running, 6/16/2003). His reasoning: Every business has access to the same information technology, so IT can’t provide a sustainable strategic advantage.

That his old theory was fatally flawed is easily demonstrated: Every business has access to the same everything as every other business — the same technology, ideas, people, processes, capital, real estate, and silly articles published in the Harvard Business Review because their authors were once on its editorial staff.

Were we to accept Carr’s past logic and apply it equally to all subjects, we would despairingly conclude that nothing matters. Now, not content with turning us all into depressed nihilists, Carr has discovered (and we should be pleased for him) the Internet and the possibility of outsourcing all of the computing cycles of every business to it.

What Carr has visionarily discovered, while tossing in terms like grid and utility computing to prove he is Fully Buzzword Compliant, is IT infrastructure outsourcing, a mere three decades after it began. Meanwhile, many very large corporations that outsourced their IT infrastructure have found that economies of scale reach a point of diminishing returns — enterprises reach a size where running their own data center costs less and provides more value than contracting with an outsourcer.

But never mind this little quibble. After all, many businesses aren’t that big and data center outsourcing does make sense for them. It’s nothing new and makes no difference. It’s business as usual right now, and companies still need an IT organization, because …

Applications and the information they process are where the IT rubber meets the business road. Computer programs are not indistinguishable from one another. The information in the data repositories they control is unique, valuable, and (assuming corporations are careful about information security) private.

Carr hasn’t entirely ignored this reality in “his” theory of utility computing. He merely waves it off as trivial — something easily solved through a combination of Software as a Service (SaaS, which if you’ve been asleep for awhile means hosted solutions) and … here’s an exact quote … “the ability to write your own code but use utility suppliers to run it and to store it. Companies will continue to have the ability to write proprietary code and to run it as a service to get the efficiencies and the flexibility it provides.”

With unparalleled perspicuity, Carr has figured out that companies can write their own code and then run it in an outsourced data center. Hokey smokes!

Carr’s New Insight is that responsibility for applications will move “into the business” which is why IT will eventually go away. He endorses the notion that businesses can easily integrate disparate SaaS-provided applications and databases across the Internet using a few easy-to-use interfaces.

What nonsense. Most internal IT organizations long ago changed their focus. They seldom develop. Mostly they configure and integrate purchased applications.

Nothing about this is easy. Integrating multiple applications and their databases takes complex engineering, not facile hand-waving. Moving responsibility “into the business” means nothing more than managing multiple, smaller, poorly cooperating IT departments instead of single, larger centralized ones. Ho hum.

Nor can integrating multiple SaaS systems work in a high-volume production environment. That’s because of a concept network engineers but not self-appointed “experts” understand: latency.

Imagine a financial services company. Customer management is SaaS in California. loan operations is SaaS in Massachusetts. You have to update 10 million customer accounts every day with interest computations. The minimum latency imposed by the laws of physics on an ordinary two-table join adds more than 45 hours to this little batch run.

Well-integrated computing environments come from serious engineering. Phrases like utility computing and grid might obscure this fact behind a fog of vagueness. They don’t eliminate it.

I have my own vision for the future of IT. In it, only people who have written code, designed databases, administered servers or engineered networks at some time in their careers will get to write about IT’s past, present and future.

The rest can include themselves out.

Comments

|In: Industry Commentary|Last Updated:

Apple creates brilliant user interfaces.

Macs are much cooler than Windows PCs. If OS/X is a Lexus, Windows is a Chevy Lumina. (Linux on the desktop, is, by extension, an AMC Pacer.)

The iPhone is so cool most people think it does something my Treo doesn’t, although they aren’t sure exactly what. So why can’t it cut and paste?

But this isn’t a column about user interfaces. I’m not really sure what it is about. Let’s keep going.

Maybe it’s about technology. We just mentioned the ultimate in cool. Now let’s look at something very hot: Software as a Service (SaaS).

SaaS is hot. I can’t get over the nagging feeling that it’s hot only because the IT trade press acts more like a bunch of cheerleaders who can’t dance very well than like journalistic enterprises.

Dale Vile of Freeform Dynamics, writing in The Register — one of the few exceptions to this complaint — points out how poorly SaaS has been accepted in real-world (as opposed to press-released) enterprises. Other than SalesForce.com, where is it? (See “Rewriting the SaaS laws,” for more).

eWeek is more optimistic (“10 Things You Should Know about SaaS,” no byline, Gartner, AMR Research and Forrester cited as sources). Interestingly, while it says only 20% of all SaaS implementations are CRM (read SalesForce.com), everything else in its report is about SalesForce.com. I wonder why.

No, actually I don’t.

As Vile points out, SaaS is an excellent choice for narrowly focused solutions that don’t require a high transaction volume, tailored configuration, or significant integration with other systems.

Situations, in other words, that are also solved easily with shrink-wrapped software.

Deep down I know SalesForce.com must provide something important to the enterprise that it couldn’t get with Act! or Goldmine. I just don’t know what, other than redirecting service desk calls from those annoyingly demanding salespeople to an outside vendor.

Huh. That can’t have been the topic either. I don’t have anything else to say about SaaS that I haven’t said before (“Trend, fad, or blah blah blah?” Keep the Joint Running, 2/13/2006). Let’s try a former hot trend: Internet telephone services.

A couple of years ago, before the patent infringement suits, Vonage and Skype were hot.

(Definitely not the point, but a thought I feel like sharing: I’m going to apply for a business methods patent. The business method is applying for patents on obvious and pre-existing ideas, then filing hundreds of nuisance suits to become rich for no apparent reason. With the patent I’ll sue anyone who files nuisance suits based on stupidly awarded patents.)

Where was I? Internet telephone services. Hot or not, they are interesting. Not for their technology, but for taking de-verticalization to the consumer sector.

Once upon a time, telecommunications was completely verticalized. AT&T wasn’t just a monopoly. It was a seven-layer monopoly. It owned the entire protocol stack, from the physical layer (the wires) all the way to the application layer (telephony).

Then came Carterphone and MCI. They didn’t just break the monopoly. They also de-verticalized telecom. MCI provided only the network layer. Carterphone provided only the application layer. (Some companies — aggregators (also called “aggravators”) — service only the invoicing layer.)

Internet telephone services do for consumers what PBX vendors did for the business marketplace years ago. They separate the network from the telephony applications.

In doing so they have achieved something else that’s even more notable: They make it possible to buy telephone service from a retailer.

Which brings us to the point of this column (hey, it has one after all!) — a prediction: Vonage and its competitors represent the end of the line for the cellular networks. It will take a decade or more, but it will happen, because cellular providers aren’t retailers. They’re telecommunications companies.

Choose any cellular provider. Go to its website. Try to figure out what you’ll have to spend. Look at your cellular bill. Try to figure out if it’s right.

Now go to any of the Internet telephone company websites and figure out what you’ll spend and what you’ll get for it. Something miraculous will happen — you’ll find you can. The Internet telephone companies think like retailers.

We’ll still have to wait a decade or more because we won’t have a ubiquitious WiFi mesh until then. The rule is old but it’s still valid: Innovation is fast, but infrastructure is slow.

Once we do have ubiquitous WiFi, we’ll be able to take our WiFi Internet telephones with us. Then we’ll use them instead of our cell phones to become distracted while driving so we can crash our AMC Pacers into a tree without noticing.

Much better.

Comments