All Posts in Technology

|In: Career Management|Last Updated:

Do trends matter?

You know the answer: It depends. It depends on the reason for the trend. It depends on the hat you’re wearing. And, it depends on what you’re trying to accomplish while wearing that hat.

This being Super Bowl weekend (as I type these words) and as I live a mile from the Super Bowl’s epicenter, a football metaphor is mandatory.

And so, imagine you’re the offensive coordinator for one of the two teams and you notice a trend: Your opponent’s defensive secondary is sluggish on the right side of the field. Should you adjust your offense accordingly?

Well, duh. And you should be alert for signs the trend is ending.

This illustrates the first it-depends: The reasons for the trend matter a lot. If the secondary is sluggish because several players are badly hung over you can ride the trend longer than if there’s no obvious reason for it.

Okay, that’s all the sports metaphor I can stand. Time for the second it-depends — the hat you happen to be wearing.

Imagine your hat says “Investor.” You spot a trend, to all appearances driven by the Greater Fool theory — tulip bulbs, Beanie Babies, Bitcoin if you found last week’s KJR convincing — something is increasing in value for no apparent reason. Being unsure as to whether a greater fool will turn up or not, as a prudent investor you give the trend the same wide berth you’d give a radioactive skunk.

Replace your investor headgear with a cap labeled “CIO” and go back in time a few years to when Bitcoin was newer. Whether or not you personally thought it was going to be around for the long haul, you might have reasonably decided it was important for your company’s financial systems to process it like any other currency.

You also might have decided Bitcoin itself was a losing proposition, but the blockchain technology it relies on might still have offered your business important advantages in securing customer transactions.

Some trends are ephemeral. Others have staying power. Some businesses trade in ephemera. Others don’t.

Which brings up it-depends #3 — what you’re trying to accomplish.

Imagine a CIO who thinks in terms of trends rather than goals.

Our CIO supports a retailer that sells expensive fashions. The entire business is built on spotting and responding to ephemeral trends — preferences for hemlines, necklines, fabrics, and so on that have no real internal logic driving them. Customers just want to look trendier than the people they hang out with. The only thing driving the trend is the trend.

For this sort of retailer, web traffic probably spikes and evaporates as fashion shows and various awards ceremonies come and go. Handling extreme variability in processing demands is something The Cloud is quite good at. The retailer’s CIO, being a trendy sort, long ago put the company’s website on The Cloud. Chalk up a win for trend-following.

Now imagine a CIO who supports a life insurance company. Life insurance companies sell risk products (if you die you win, if you live you lose), investment products (if you live you win, if you die you lose), and hybrid products (if you live or die you win less but something). Purchase transactions and product lifespans last for decades, and part of the appeal of their investment products is that there’s no reason to pay day-to-day attention to them.

The demand for processing power is steady — a situation where Cloud economics just aren’t as interesting.

For the most part, new information technologies are interesting to the extent they provide important business capabilities.

But sadly, most of the analyses aren’t about business capabilities. They’re about surveys of who’s planning to invest in them, and how much.

To illustrate the point, imagine the Froschboscher Group’s annual Shiny Ball Survey reports that 90% of your peers plan to spend heavily on IDA — Intuitive Data Analysis, a technology that mimics the human capability of “trusting my gut.” Does this mean you should too?

That depends on your business, and whether the ability to apply Artificial Stupidity to a problem might prove useful to it.

And it might. If your target market consists of people who trust their guts when making decisions, being able to duplicate their decision-making could prove very useful.

The moral of this week’s story: When planning your company’s technology strategy, trends are effects, not causes. Your job isn’t to follow the trend. It’s to figure out what’s causing it.

If you can identify a potentially valuable business capability, by all means investigate the trend more deeply.

If you can’t, the trend is probably about as important to you as a Beanie Baby.

Comments

|In: Architecture|Last Updated:

Bitcoin is the new Beanie Baby.

In case you’re too young to remember, in the early 1990s Beanie Babies were the new tulips. Which were, as documented in Charles MacKay’s Extraordinary Popular Delusions and the Madness of Crowds, (1972) an early example of something that only grows in value because people believe it will grow in value, and whose value vanishes as soon as skepticism sets in.

There are those who see no difference between Bitcoin as a currency and dollars as a currency in this respect. In both cases, the theory notion goes, the value of one currency unit is nothing more than a consensus among all who hold the currency as to its value when compared to other currencies.

Not that it has anything to do with keeping your joint running, and not that I’m a trained economist (perish the thought!); in this the Bitcoin enthusiasts are misguided. Because in the end, the value of a dollar is derived from the U.S. GDP, just as the value of a share of a company’s stock is, in the long run, tied to its profitability and balance sheet.

Put slightly differently dollars and other currencies have an entire national economy behind them. Bitcoin is backed by enthusiasts telling each other it has value. The name for this is the “Greater Fool Theory,” which states that Bitcoin, Beanie Babies, tulip bulbs, and the IPOs of companies that have utterly preposterous business models are all solid investments with excellent profit-making potential, so long as you can find a greater fool to take your investment off your hands before the bubble bursts.

In, just in case this isn’t obvious, my awesomely humble opinion.

Which has what to do with running IT?

In my awesomely humble opinion, it has a lot to do with enterprise technical architecture management, because every application, platform, and chunk of infrastructure you purchase or license is, in a very real sense, an investment in your company’s business. To the frequent regret of your technical experts, the best technology isn’t always the best investment.

The analogy is imperfect. In the case of Bitcoin the issue is that loss of belief will result in the collapse of Bitcoin’s exchange rate with other currencies. In the case of a technology you’ve invested in, you have no interest in reselling it. Your risk is loss of support.

This is especially true for new technologies developed by venture-funded startups. But it’s also true for established players, some of whom have been known to abandon customers when a product they thought was promising just didn’t quite pan out.

Here’s where Bitcoin and Beanie Babies come in. Belief … industry mindshare that translates to you and your peers being confident the provider will succeed … determines whether the product is an early-stage success, and is, as a result, supported.

And support isn’t merely the ability to call in technical expertise when needed to make the product do what you need it to do. Support also means distributing patches when someone finds a security hold; being able to install and run on updated operating systems; adding new features and functionality as the marketplace for the product and its competitors becomes increasingly sophisticated.

Even more important, support means you can hire top-notch talent to work with the technology.

Example: According to iDatalabs 167 businesses still rely on IMS, IBM’s ancient hierarchical DBMS. IMS still works. IBM still supports it enough that it will continue to work next year.

Try recruiting an IMS DBA and see what kind of talent shows up. And no, I’m not talking about the average applicant age. I’m talking about the average applicant’s level of sophistication and initiative. It’s doubtful someone who’s excited about working with IMS has even mastered relational data design. That puts them two conceptual generations behind what’s now possible, stuck in a hierarchical data design mindset in an era of post-relational NoSQL technologies.

So the Bitcoin analogy is imperfect: Those who develop and sell new IT products start out with Bitcoin value dynamics, where all that floats the product’s longevity is belief the product will have longevity.

But unlike Bitcoin and its advocates, IT startups have an intense focus on having the equivalent of an economy backing them, which in their case means either revenue and profits, or acquisition.

If I haven’t convinced you, a suggestion: Buy copies of The Moral Hazard of Lime Daiquiris (Bob Lewis and Dave Kaiser 2013).

The smart money predicts this will become a high-value collectible item. You’ll easily quintuple your investment.

Or at least get a few chuckles out of the deal.

Comments