Comment Google recently shocked the IT world by reminding everyone that it actually builds its own servers, a strategy delivering economic advantage over its competitors, and leaving corporate IT departments in the dust. The technology press was full of the industry's reaction, chiding Google and reminding us that conventional wisdom is that traditional server companies like Dell, have the unbeatable advantages of economies of scale and manufacturing know-how. Turns out that thinking is plain wrong.
The capital cost of a server when spread over its lifetime is small compared to the cost of power consumption, and associated cooling. Google, which makes more money than God it seems, does so by being smart enough to notice things like that. It turns out that in building their own servers, they actually pay a premium for power units, that run cheap and cool. Google have been banking that advantage from the beginning, when money was tight and their business was building.
Unlike most IT shops, Google sees servers merely as just one commodity component in its technology-driven value chain. Servers are the means, not the end, and after all, nearly 100 per cent of server components and sub-assemblies are themselves, snap together commodity parts whose price drop continually. Google goes further by building server failure tolerance into its software, so when one server dies, another takes on the workload. Hmm, this sounds like "high availability" computing - something that drives big server premium pricing in big "always-on" corporate IT shops. Premiums that Google also avoids.
Corporate IT can learn from Google's different thinking. Remember IT's halcyon days, when pioneering business computer applications challenged conventional wisdom? Implemented, they improved just about every facet of business operation. If IT is to make a real contribution to business results, now might be a good time to think about changing every facet of IT operations. As businesses cope with globalization, tougher competition, faster product cycles and the endless investor demand for better results, why should IT be isolated in business-as-usually land?
God (and Google) knows, the time is right on so many IT fronts, with servers being just the thin edge of the wedge. Some questions come to mind:
Do corporations really need to spend money and productivity on introducing another Battlestar Galactica operating system (Vista) from the Microsoft franchise - one so complicated that it can't quite seem to get out of the shop?
Will PC users be measurably better off after the expense and disruption of introducing the next MS Office release?
Should businesses now pay Microsoft for virus protection services, effectively rewarding them for delivering products without immune systems?
Must IT promote yet another frenzied re-implementation of business process calcifying SAP?
Do corporate IT departments really need all those outrageously expensive EMC disk arrays, when disk storage is now so cheap that everything computer readable can be triple mirrored on commodity drives for very short money?
Why not buy standard networking equipment from reputable commodity providers like Netgear, instead of Cisco - as much as 80 per cent saving is likely to be the only noticeable difference to the business. And at the same time, why not move network traffic from dedicated network links, to a VPN?
And how about scrapping all those expensive BMC and other IT tools where the staff that use them have long since been laid off? Buy bigger machines and redundancy - its a whole lot cheaper!
Google's thinking may represent the new punk era of IT; the conventional guys being Crosby, Stills and Nash incumbents. Suddenly, Sid Vicious sounds good! ®
Cormac O'Reilly now acts as a senior advisor for Gustin Partners, a Boston based boutique management development firm, while not spending his ill gotten gains living in Texas and the UK.