Opinion As the "C" word creeps into everyday IT conversation, the confused get scared, and the squeamish, squirm. Of course we are talking commoditization, which not only heralds the end of big margins for the IT establishment, but ultimately the demise of the in-business IT community.
Let's look at the IT establishment, and the rush to get into EMC's big margin knickers. How exactly do you make big money on disk storage when it costs less than $1 a gigabyte? Good question, especially if your business model was developed in the halcyon days when a terabyte fetched $1m.
Hyping up clever software and mission critical hardware as a value proposition? I don't think so. No matter how hard you multiply small numbers, they still give small results.
Today's news is just duplicate and triplicate everything, as it now costs virtually nothing. Spoil your databases with as many storage mirrors as you want, for that matter, and forget the bread around the sandwich filling. Why even bother backing up to tape?
The economies and logic don't work anymore - now wasn't Legato such a great acquisition! Well, the best you can do, as in its acquirer (EMC's) case, is remind the business community that actually their information is not a commodity. If bullshit sold by the pound I'd buy EMC stock.
And what about those desk top costs -- two years ago, running at over $2,000 per user. With 20 years of PC literacy, increasingly stable cheap PCs, and everybody and their uncle running home computer set-ups with more muscle that at the office without any IT support, how is it all justified?
Well it’s not, and the money saved will be welcome by business managers who are stretching to add every penny to the bottom line. In fact I still can't understand why businesses don't insist that employees use their own PCs, rather than provide them. I don't think there's a college in the USA which does not insist that students provide and support their own, and they seem to manage fine. Add a computer allowance into the salary, for crying out loud! Save capital and apply the tools of the trade rule.
And what about those in-business networks. What is all this crap about private networks being more secure - have folks been asleep and not noticed standard integrated encryption (especially PPTP) and the collapse in Internet access prices? Or the fact that 30 million homes in the USA run network connections this year that are eight times the speed/capacity of the average company site, and cost one tenth the price. Is it a redundancy or management tools issue? Get real, just buy a second (or even third) access link and have a $600 semantic router handle everything including automatic load balancing. Oh, secure means the networking wonks; now I understand.
Finally, baseline services. Am I the only one who has noticed that all the "file and print" services are now bundled into the PC? What are all those costly-to- support servers doing? Wide area print sharing? Nah, that's the job of now-established IP printing. Or unattended, remotely managed shared office disk storage? Hey, even Linksys is bringing one of these devices out. And what about eMail, iMessaging and VOIP? Well, duh, these are now commodity services.
You get messaging for nothing, but you can spend as much as $100 a year should you need to. Company directory? Give HR an LDAP service and let them get on with their jobs. VOIP is today's business bargain; have employees buy a Vonage service and tote around the small network device between home and office, and on the road - their phone and calls will go with them, and their voice mail is integrated in their eMail. Oh, in the USA that's another $25 per month bundled with virtually free nation-wide, and rock-bottom international calls. Just add that lot to the salary reimbursement scheme and think of all those servers, telephone switches, administration and hassle saved.
Done the math? For historic $2,000, read a lot under $500. And that comes with some kick-ass performance and reliability improvements. You would have to be another type of "c" word not to see it. ®
About Cormac O'Reilly: Late sixties IT industry entrant with early developer gigs in London at Abbey National, Unilever & BOC. Senior IT oil field trash in the eighties and nineties; Schlumberger (Houston TX) and Shell (The Hague). Board IT big-wig at Costain (London) before CIO/CTO at Digital and Wang Global/ Getronics (Boston). Non-exec director at two flame-out dot.coms; now spending ill gotten gains and being provocative in Newburyport, MA