BankerVision

Everything for nothing part 2

I seemed to have caused some heat a few days ago when I suggested the future of corporate IT was “everything for nothing”. My point was that commoditisation of technology inputs would reduce their price to a point where they would, effectively, be “too cheap to meter”.

Since then, many people have written to me privately saying they “don’t get” the argument I’m making, though most have been polite enough to stop short of telling me I’m wrong.

So I thought I’d better explain myself a bit better, perhaps with the aid of some of the public comments on this blog.

Let me start with the basic refutation of free from Anon, who reduces the argument to economics:

…until food, clothing and shelter are free how people who make the free stuff for others to consume can make a living. Nothing is free to make for others to use. The Internet is not 100% free as someone needs to be paid to keep it up and running and they use this payment to buy food, clothing and shelter.

OK, so I admit at this point some dramatic licence when describing the price as “nothing”. Quite clearly, someone is going to pay for stuff, particularly the stuff that uses atoms. Perhaps I’d have been better off using the “too cheap to meter” phrase instead.

Now this is a world we’re already in. I buy an internet connection today, and pay about ten pounds a month. Every year or two, the width of my pipe has doubled without much in the way of a price increase. The trend is obvious, and is the same for the computers I’m using, and everything else in my life that depends on IT. My bandwidth, anyway, is too cheap to meter. So is all the rest of the technology around me.

I mean, there is a CPU in my light switch now. It knows how to do the dimming and switch-on things when I point a remote at it. Those are cycles that are too cheap to meter.

But Thomas Barker, regular commenter here says this:

Focusing on CPU cycles is a red herring. They aren't the bottle-neck in business systems. Most systems spend all their time on I/O, so if anything, you'd expect massive consolidation *within* datacentres to economise on disk activity and storage. Not processing being dynamically relocated across continents. The bandwidth to push the data around is more expensive. CPUs are cheap.

Now, this may be true today. But the inexorable price decline in bandwidth on public networks is irrefutable. Its easy to see when bandwidth will be cheaper than cycles.

Anyway, Thomas has missed the point, I think, when it comes to cycles. Its not the chips which are going to be expensive, its the power. There is going to be an energy shock sooner or later, just like the oil shock on 1973. That had the result of hugely inflating the price of crude, with the result that everyone suddenly had to be concerned about fuel efficiency.

It is not hard to imagine a carbon tax on datacentres in the next decade. What would that do to the price of your processing?

Most countries are inefficient producers of cycles. When you can’t get enough power into your datacentre no matter what you do, you’re going to be forced into running your workloads virtually elsewhere. I’ll not make any predictions about storage, except to say that if you have virtual workloads moving around, I’d expect the storage to move with it. Thomas correctly identifies that having the data with the workload is usually a good thing.

But on to the desktop. Internally, I got an email from someone that reminded me that “the cost of a desktop isn’t the hardware, its the support to make it all go”. I paraphrase, but the point, really, was that bodies have to sit around to fix things that stop working.

The fact of that matter, though, is that there is a growing population of people in enterprises who are able to fix things themselves, and who, actually, have better skills at doing so than the corporate helpdesk. When you let them get on with managing their own tools, they’ll be much more productive that that big lumbering corporate helpdesk would have let them be.

That’s not everyone, today. But it is a growing body of people, and sooner or later, its going to be a majority.

I want to close with another point from Thomas’s comment:

As for people hacking their own business programs, it can help, it is how most useful things start, but scaling, or integrating, stuff like that... eeek!

I know you all know my argument here is going to be obvious: Open Source does all of these things perfectly well. Software that evolves from the bottom up works, even in a business context. Having your end users do it rather than coders is a question of waiting for the right tools, not any lack of motivation or capability.

I cannot imagine that end-user computing tools a decade from now won’t routinely be capable of doing big systems.

I have one final point to make. Most of the communication I got on this post came from IT professionals, all of whom said that none of this could happen for various reasons. The discussion I got from non-IT colleagues, though, was along the lines of “but isn’t this obvious?”

What conclusions would you draw from that? Here are mine: big IT will be over in the next decade or so, and all those professionals who manage the commodity inputs had better get themselves up the foodchain quick smart. Those that fail to recognise that they’re not that special any more will be out.

And if you sell the commodity inputs, be prepared for your nice premiums to crash. Our needs aren’t so special that you can charge us over the odds. You too, will be out unless you can dream up something that makes you special again.

Personalisation dynamics

So yesterday, again, I got some more CVs stuffed into my inbox from a recruiting company that’s pushing its latest hot candidate.

The candidate was a “high level sourcing strategist” with years of experience in banking and financial services. Apparently, this candidate was especially good with cards, and had led massive cards transformation programmes.

The thing is, I don’t do cards anymore.

Interestingly, this email arrived to by government inbox, and correctly identified me as the CTO at DWP, so they must have at least a little bit of a clue.

That is just so annoying to me.

Firstly, I just hate unsolicited CVs, which are worse than ordinary spam mail because they release piles of personal information into the wild.

But even worse than that, I hate it when recruiters don’t bother to check their details before they contact me. I didn’t give them permission to come into my mailbox, so they have to earn the right before they can expect anything decent to happen.

So anyway, I called this recruiter and told her not email me ever again. And this was the exchange:

“Oh, sorry, we do it as a service. We think it is helpful for you to know the great candidates out there”

“His experience isn’t relevant”

“He’s still a great candidate”

“He doesn’t know anything but cards, which we don’t do”

“Well I have this other candidate….”

After a few more minutes of argument, I got them to remove me from their mailing list.

I suppose the recruiter was just doing their job, however badly.

But isn’t it interesting how some firms, who supposedly are all about personal service (when we hire a recruiter, they aren’t just shoving a CV in my face, they’re supposed to be about search), fail to understand the dynamics of the personal.

Here are the dynamics of the personal:

1. If you get any detail at all wrong about me, you’re deleted.

2. If you guess wrongly about what I want, you’re deleted.

3. If you dare to follow up after guessing wrongly and being deleted, you’ll get deleted again and then you’ll get blacklisted

4. If you get blacklisted and you still refuse to stay deleted, I will be on a personal mission to make sure you’re blacklisted everywhere.

This is not just me, by the way. I see it from everyone who gets touched by poorly done personalisation.

Considering the number of things that have to go right for such an outreach to work, I am surprised why companies ever spam anyone with poorly constructed personalisation. Certainly, it seems impossible that an organisation I’ve never dealt with before can ever know enough about me to get all this right. Even with the amount of stuff you can find out online.

Now, as to this recruiting firm, and this candidate, this value destroying exercise has eliminated much chance of you dealing with me again. But by all means spam my inbox and that of my colleagues as well. I can assure you the response will be predictable, and pretty much the same as on this occasion.

Everything for nothing

I was once in Egypt, and got harangued by all these street vendors selling stuff. “Everything for nothing!” one cried, in an attempt to get me to approach his stall. Highly humorous, and I laughed with the vendor and bought something I-don’t-even-know-what-it-is just because I liked his approach

“Everything for nothing” is clearly a joke in the real world of atoms, but it isn’t in the IT world of bits.  Sooner or later, all the commodity technology stuff we use is going to be free, or so nearly so it won’t matter.

The question going through my brain now, though, is whether the enterprise IT folk really believe it.

Most people I know believe their organisations are so special, so unique, that they can’t rely on free stuff. No, they have to have proprietary systems, dedicated networks, and piles and piles of hardware devoted to their super-special workloads.

But in the next decade or so, I can’t see why you would build a private corporate network at all. The internet will be way cheaper and more reliable as well as ubiquitous. Why not just use that instead? Oh, I know all the network specialists will be going on right now about latency blah blah, reliability more blah, and oh yes, security big blah blah blah.

These are all problems which future technology generations will resolve. Its impossible to imagine, for example, that applications won’t protect their own data and users robustly rather than relying on the network to do it for them. They’ll need to do so, because they won’t be able to predict what network they’ll be running on.

Why do I think that? Because they’ll be running in virtualised systems, on hardware that won’t belong to anyone that’s vetted them in advance. I’m seeing that as pretty much inevitable, really. The thing is, datacentres are such hungry beasts, gobbling up all that power and wasting most of it to do cooling. I think it will take one small island nation to drown - which could happen in the next decade, I believe - before real economic measures will be taken to expose the costs of all these cycles in countries not well suited to producing cycles.

That’s every country, by the way, that doesn’t have renewable energy supplying most of its needs and lacking environments where nature can cool the servers rather than aircon.

Countries well suited to cycle production will export them, the price will fluctuate with supply and demand, and large organisations will secure compute capacity on a futures exchange to guarantee their future costs.  As more countries become net exporters of cycles, and they get better at producing those cycles for less money, the cost of compute for corporations will tend towards nothing.

So organisations will be out of the network business, and they’ll be out of the datacentre business, and this will happen whether their IT folk like it or not. Its hard to justify any other  position when the competition is free and the CIO is expected to produce year on year cost reductions.

By the way, if that continues - the cost reductions I mean - the CIO will be needing to get to a price of nothing way sooner than a decade.

But I digress, because there are other parts of the IT estate that are certainly not free right now. What about all those end user devices that employees have to have, for example?

Well, consumerisation is well and truly king these days, and those employees will be bringing their own devices and using them. Walk around your staff and count how many people have their own laptops at work besides the one the IT folk have issued. You’ll be surprised at the percentage.What most people have at home is better than what they have at work.

If there is a way to use their at home-better stuff at work, employees will find it. Whether or not it is sanctioned.

Organisations are going to get this soon, and make it easier for this to happen. Then we’ll be seeing allowances being paid to employees to help them get the technology they want, and finally, employees will just be expected to show up with their own stuff if they want to work at all.

Tradesmen and women have been in this world for some time. They bring their own tools. Knowledge workers are about to be doing the same.

Anyway, this consumerisation is already happening in some organisations. And for those where it isn’t, it is happening underground, From a corporate perspective then, the desktop estate is going to be practically free.

What’s left?

Oh yes development. The biggest cost of any IT project. The people stuff, the code writing and so forth. Well, clearly the costs of that are in decline as well, driven mainly by the ease one can now contract labour offshore. That’s not free though.

Free development comes from your employees at the edge of organisations, however. Just as they’ll bring their own tools to work to get the job done, they’ll make new tools to help themselves get more productive. They’ll share their tools, and sooner or later you have pretty big systems that do real work.

Now, these systems may evolved without a substantive design, but if they do the job, does it really matter? I can assure you it won’t matter to the people that are doing the real work, only to the IT people whose jobs evolving systems displaces.

What’s left? Oh. Nothing.

Which brings me back to my initial question. If all this comes to pass - and it seems to me there’s every economic indication that it will - the vision needs to be sketched out now.

Planning to do more of the same for the next decade isn’t going to cut it, because that stuff is going to be over. Technological objections won’t fly, because, considering the historical pace of improvement, can anyone really think progress is going to stop in the next 10 years?

The problem here is not one of technology. It is of planners that won’t plan for anything they can’t see and touch right now. My argument is that what we need is a bit of faith in IT. Faith which is completely justified, given the track record, by the way.

We also need some acceptance of the fact that if your solution costs more than nothing, your customers will find a solution that does cost nothing. The next decade will truly bring “everything for nothing”, but not unless we get cracking now.

Or, more particularly, not unless the IT folk get cracking now. If they fail to do so, the only thing that will be free is the headcount they used to occupy before free displaced them.

Are you a young genius?

If you are, I have five open intern roles. We’re wanting 3 to help in the innovation team, and two that are interested in IT strategy.

They’ll be based in the North of England, and the people who sign up will be with us till March next year. It’s a great opportunity for experience, and of course, there’s a modest salary involved as well.

I can promise you an amazing journey. Our plans are very, very big.

Use the following links for more information and to apply:

Intern Innovators

Intern IT Strategists

Please pass this on to anyone you think could be appropriate… you need to have the right to live and work in the UK.

5 influential people

Last night, I’m on this train home from the office in London. Whilst squashed into my seat in typical commuter fashion, I started to reflect on some inspirational people I’ve met over my career, and the lessons I’ve learned from them. That’s an interesting idea for a post, I thought, so I’ve created a list of the top 5 who are most influencing my work at the moment. 

It is firstly impossible to go past Janet Parker, founder of a startup I worked in as CTO  some years ago. The most inspirational person I’ve ever seen in front of an audience, then or since. She could get up in front of a crowd and make you believe things. I recall being in a room and hearing her speak about a potential opportunity in the cards (as in credit cards) business, and having a tear in my eye, she was so good. Janet taught me something I’ve never forgotten: the ability to motivate and inspire is the key skill you must have when you lead. I’ve struggled ever since to be even half as good at it as she was.

Next up, my first career coach, who is the ex-MD of P&O in Australia. He told me that if you want to get anywhere, you first need to be part of the money. In other words, connect to the business you’re in, then make a difference. This will automatically get you moved up. Hovering around the edges in support functions doesn’t do that. Its why most CEOs are from sales or marketing.

Annalie Killian, who is Catalyst for Magic at AMP, and the producer of their bi-annual innovation conference AMPlify is on the list. Annalie showed me the powerful  effect you can have when you add design to things. Oh, I get the fact that the iPhone, for example, was interesting because it was beautiful. But I didn’t feel the power of design until Annalie showed me at her conference what you could do. She was using a butterfly logo, for example, and on the last day had chrysalises at entrance to her event, timed to hatch as people arrived. It was beautiful. And it was remarkable, enough so that you’d never forget it. Because of Annalie, I now insist that everything we do has that kind of design about it. You really can’t believe what a difference it makes. 

Miss Pamela Hinde, my 2nd grade teacher at Lane Cove Public, in Sydney Australia, and now retired. She taught me to read and write, after I’d repeated 2nd grade for not being able to do so. Obviously, the fact that I get to write blogs and books now, is all because of her. I can’t imagine how my life would be different now without her.

And finally, my fast entry graduates, now, and in all roles previously. They make you think differently about the way you’ve been brought up to do work. They also, if they’re any good at all, tell you you’re crap from time to time. I’ve had lots that have changed my thinking about things, and I rely on them not knowing what can’t be done to know which impossible things we should do next. They are also very useful for translating next generation thinking into stuff oldies can understand. I still can’t believe I’m now one of the oldies...

Who are your top 5? Shall we start a meme?

The two prices of everything

The last few days in the gym, I've been listening to Chris Anderson's Free on my iPhone. Most people will likely be familiar with the work of Chris, who also wrote The Long Tail. Free is available free for download from iTunes.

Anyway, so I've been listening to this book, and a key insight jumps out at me: there are only two prices worth considering for any product or service - something or nothing.

When you charge a price, even 1p, the behaviour of a consumer is different from what you get when the product is free. On the other hand, when you charge 5p, the behaviour isn't that different from 1p. The behaviour then tends towards classical equilibrium depending on price elasticity of the consumer as the price goes up.

Free, on the other hand, is a singularity. You get behaviours that you can't get in any other way, and it isn't always excess consumption.

The insight that there are only two prices - not an infinite range - is obvious in retrospect. I don't know why I didn't realise it for myself.

Corporate bloggers are boring (especially new ones)

Why are so many business and corporate blogs so boring?

I started to wonder this the other day when I was trying to clear out my reader. I looked at the list of feeds I get, and started to examine my reading behaviour. There are blogs I immediately select whenever there is a new post available. And there are ones where I let the posts build up, until, in the end, I feel duty bound to read and clear them.

It is the blogs in this latter category, I noticed, which are boring.

So when I started to look more closely at this, I noticed something. Almost all are business or corporate blogs, and almost all are relatively new writers. And, boringly, they’re all comprised of statements of facts easily deducible either from the writings of others, or the corporate line their organisations are taking.

The common characteristic of boring blogs is - for me - that they don’t give you any insight into the mind of the author. They’re always about the minds of others.

New bloggers, apparently, fail to get that the purpose of blogging is not to demonstrate what you know - since all knowledge is highly commoditised these days anyway - but to show others what you think.

What you think is unique, and valuable. What you know is not. There are, anyway, very few experts around who know things that noone else knows, and of course, the minute they share whatever-it-is, its commodity.

Real experts, in my view, have interesting blogs when they create new thoughts. The reason they are experts is they take existing knowledge and ratchet it up a notch.

But most people aren’t interesting experts, and therefore must rely on the quality of their thinking about things already known.

I was put in mind of this the other day when I heard a story (through backchannels) that some people in the architecture profession here in the Department were horrified that I was joining because of this piece I wrote a few months ago. You see, part of my directorate is an architecture team, and the question everyone was asking was “Does he get architecture? Look what he thinks of architects!”

Of course, many architects I know are very savvy people indeed, and that particular post was deliberately aimed at architects and their cronies in various banks around town. I was letting them know what my opinion was. A tongue in cheek approach, perhaps, but I think, interesting reading.

Now, when I read most new bloggers, you’d never get a post like this. They are still trapped in the idea that blogging is about what you know, not what you think. They make statements of fact you could just as easily have Googled to get. Or else they reinterpret authorised messages from their organisations, perhaps with a little personal spin.

Or, my favourite, they have been told by their comms peope they need to do more communication, so they issue wonderfully crafted pieces which have quite clearly been written by someone else.

As I said, boring.

So here’s my challenge to all new bloggers out there: give us your mind. Share your thought processes, and your unique perspective of things that are happening. Tell us the way you see things, not the way things are.

And don’t tell us things we already know or can find out for ourselves. You’ll be interesting if you stimulate and challenge. But not if you are a dusty encyclopedia about things we don’t really care about all that much.