Normal blogging service is now resumed!
Windows 7 has just hit the market and the consensus seems to be that “it’s better than Vista”; hardly a glowing endorsement. Most speculation centres around it’s likely success and the speed of it’s mainstream adoption. However few pundits distinguish between the consumer market and the radically different corporate one.
While consumers accept service pack releases they rarely change the operating systems that’s preloaded on their PC’s. Most aren’t going to migrate to Windows 7 until they buy a new PC. Given the lack of compelling new functionality and the economic downturn, migration is likely to be slow rather than speedy.
Corporate buyers are going to be even more cautious. The lack of new functionality is a major disincentive to move and Microsoft has failed to provide a clean migration path from Windows XP. Moreover developments in cloud computing and browser technology are turning the desktop OS into a commodity. The will be no great rush to adoption.
Offshoring has become a standard tool for most corporate I.T.departments and many ERP vendors over the last ten years. Suppliers of offshoring services often present themselves in grandiloquent terms as “long term partners” etc. This is, of course, just marketing fluff. Buyers of these services have no such illusions and realize that it’s quite simply labour cost arbitrage.
This has sparked a huge boom among suppliers, often on the Indian sub-continent, offering offshore facilities. The boom is about to end.
In many I.T. departments there is a massive and on-going decline in bespoke application development. This has already led to a decline in the demand for developers and far fewer will be needed in the future. In addition, Web technology will make call centre style support increasingly redundant. Hardware virtualisation is already reducing the number of corporate data centres and staff needed to operate them.
In summary, I.T. is becoming significantly less labour intensive. Labour costs are a rapidly shrinking percentage of the total budget. The incentive to reduce them is declining and with it the need to consider offshoring solutions. Offshoring is looking like a better solution to yesterday’s problems but increasingly irrelevant in a less labour intensive environment.
No doubt all of this will prompt yet another one of corporate I.T.’s periodic existential crises.
Forum software and wikis are ideal collaborative tools for managing projects that span countries and time zones. They facilitate a follow the sun model. To date they have found most use in open source software development. However their applicability goes way beyond this and they’re potentially very useful for any multinational organization.
Wikis provide structured and easily searchable information about a project. They can be extended and maintained by any team member. Forum software enables team wide discussion about issues and objectives. It provides a context for decisions and a historical record.
Although proprietary solutions are available there are plenty of highly effective open source alternatives.
However using these products creates organizational and cultural problems. They require a degree of project transparency that not all team members will be comfortable with. More dangerously they tend to undermine traditional organizational hierarchy.
Nevertheless the benefits are immense and intelligent anticipation can normally resolve the organizational issues.
Nick Carr has some gentle fun at the expense of Tim O’Reilly who responds in a good humoured way.
Carr’s views are generally worth listening to and I agree with him that Twitter is a profoundly superficial medium. It’s currently most fashionable as a marketing tool for media celebrities. I’m surprised, however, that corporate types haven’t yet realised it’s potential for staff monitoring and control.
On this occasion however Carr’s implicit criticism of O’Reilly is inappropriate. Surely a superficial medium demands a superficial guidebook or as O’Reilly puts it “you pick the hat to fit the head”
The consulting company McKinsey has produced a report (Now hidden behind a financial firewall) on the status of cloud computing that’s well worth reading. It provides a much needed discussion on the nature of “cloud computing” and proposes a sensible definition, including a useful distinction between cloud computing and cloud services.
The report concludes that while cloud computing makes sense for small and medium sized businesses, substantial hurdles need to be overcome before it can be used by large enterprises. In particular it’s claimed that most large enterprises still enjoy lower TCO’s running private data centres. Additionally the report suggests that the cost of private data centres could be even further reduced if CIO’s were to pursue a policy of aggressive virtualization. The impact of such a policy on the sales revenue of sever vendors is not discussed.
Throughout their analysis McKinsey treat cloud computing as essentially an optional deployment strategy. At the moment they are right. However it’s only a matter of time before services are available in a cloud environment that cannot be duplicated in private data centres. Businesses that see these services as providing competitive differentiation will place substantial pressure on CIO’s to migrate to a cloud environment.