{"id":1381,"date":"2008-08-19T16:43:21","date_gmt":"2008-08-19T23:43:21","guid":{"rendered":"http:\/\/gillin.com\/blog\/?p=1381"},"modified":"2009-10-25T13:51:11","modified_gmt":"2009-10-25T20:51:11","slug":"a-distant-mirror-of-technology-change","status":"publish","type":"post","link":"https:\/\/gillin.com\/blog\/2008\/08\/a-distant-mirror-of-technology-change\/","title":{"rendered":"A Distant Mirror of Technology Change"},"content":{"rendered":"

Reading a recent CIO Insight interview with Timothy Chou<\/a> brought to mind an analogy to, of all things the early days of railroading.<\/p>\n

Chou is the kind of futurist who makes the guardians of the conventional wisdom cringe: an industry veteran who understands the way things have always been done and who now tours the country arguing for radical change.<\/p>\n

After spending 25 years selling IT products to CIOs, Chou joined Oracle in 1999 to launch the company\u2019s fledgling software as a service (SaaS) business. The experience was transformative. In 2004, he penned a provocative book called The End of Software<\/a><\/em> in which he argued that the compelling benefits of SaaS would sweep over the enterprise software industry. He\u2019s now self-published a second book, Seven<\/a><\/em>, that challenges CIOs and software vendors to understand how important IT infrastructure is to their businesses and to make some tough decisions about where to invest. The title refers to seven software business models ranging from traditional licensing at one extreme to Internet-only software businesses like Amazon and Google at the other.<\/p>\n

In an interview with Paula Klein, Chou is careful not to lecture CIOs about the choices they should make, but it\u2019s pretty clear where he stands: most of them should be aggressively moving to hand over much of their software and infrastructure to someone else. While CIOs are ideally positioned to understand the business tradeoffs (\u201cAsk any CIO who has completed an ERP implementation, and he or she will tell you more about how the business really runs than anyone on the executive staff,\u201d he says), the decision\u2013 is a political minefield where many CIOs still fear to tread.<\/p>\n

Losing Control<\/strong><\/p>\n

One of the most often-cited reservations CIOs have about SaaS is that they lose control of their IT environment. Chou argues that this is a red herring. Most IT organizations aren\u2019t particularly good at backup and recovery, for example, so the belief that they can do a better job than a commercial vendor is misplaced. \u201c<\/em>Many people think you have to pay more for reliability, but the opposite is true,\u201d he says.\u201d If you want to buy the most reliable car, don\u2019t pick the $1 million handcrafted sports car; find a <\/em>Toyota<\/em> that\u2019s been produced a million times.\u201d<\/em><\/p>\n

<\/em><\/p>\n

Addressing another common concern \u2013 that SaaS deprives IT organizations of the ability to customize their software environments \u2013 Chou argues that the tradeoff is usually worth it. Businesses, he says, \u201cmay have to forgo much of the customization that they\u2019re used to in order to get simpler, cheaper, more reliable applications.\u201d<\/p>\n

His remarks reminded me of an insight I gained while on a recent visit to the Railroad Museum of Pennsylvania<\/a>. There I learned that in the days before the railroads were built, it took Pennsylvania citizens two full weeks to travel from Philadelphia to Pittsburgh.\u00a0 This forced communities to become self-sufficient because it was so difficult to obtain goods from the outside world.<\/p>\n

The Triumph of Choice<\/strong><\/p>\n

Railroads ushered in the fruits of the Industrial Revolution, making it possible for mass produced goods to reach a wide audience. I\u2019m sure that many people at the time mourned the loss of the local blacksmith, who crafted each horseshoe individually. Some probably chafed at the idea of molding their lives to the demands of a railroad timetable.<\/p>\n

In the end, however, most people accepted the fact that low cost and wide selection was a reasonable alternative to expensive, customized goods.\u00a0 And as much as we gripe about the tyranny of the airlines today, we appreciate the fact that they can get us from New York to San Francisco for less than $300.<\/p>\n

The alternative to complete control is choice, and the power shift from seller to buyer has brought dramatic benefits, Chou argues. In the past, \u201cEnterprise<\/em> software vendors sold only $1 million products, and the only channel to buyers was a human,\u201d he tells CIO Insight<\/em>. \u201cToday, the Internet provides a low-cost, diverse channel for information that can be used to educate anyone. Reference calls have been replaced with hundreds of online forums that let you understand a diverse set of experiences with a product.<\/em>\u201d<\/em><\/p>\n

<\/em><\/p>\n

In other words, competition and the rules of the market create a healthy atmosphere for diversity, which increases choice. Buyers may not be able to get exactly what they need, but they can come pretty close. For most of them, that\u2019s a pretty good trade-off.<\/p>\n

From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.
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Reading a recent CIO Insight interview with Timothy Chou brought to mind an analogy to, of all things the early days of railroading. Chou is the kind of futurist who makes the guardians of the conventional wisdom cringe: an industry … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":""},"categories":[143],"tags":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pTy95-mh","_links":{"self":[{"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/posts\/1381"}],"collection":[{"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/comments?post=1381"}],"version-history":[{"count":4,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/posts\/1381\/revisions"}],"predecessor-version":[{"id":1722,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/posts\/1381\/revisions\/1722"}],"wp:attachment":[{"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/media?parent=1381"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/categories?post=1381"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/tags?post=1381"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}