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Lack of Innovation in IT Holding Companies Back?
bednarz writes to mention that Google's Dave Girouard, manager of enterprise business, is blaming a "crisis" in IT and the "insane complexity" of technology, among other things, for the lack of innovation that could allow businesses to grow. "A lot of things that people think of as core IT functions need to disappear into the ether so that the IT organization can properly focus on the value-added [activities]," he said. "Information security, as critical as it is, needs to be taken care of by organizations who live and die by it, who invest the money, time, resources and staff. Why should every company in the world have to build up their own expertise and have to maintain servers and provide security?"
See any serious problems with this story? Sure! "Lack of content" springs to mind.
Google. What a mystique! They can 'innovate' new forms of -
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Cross-site scripting exploits:
http://blog.outer-court.com/archive/2007-01-01-n1
http://blogs.zdnet.com/Google/?p=338
Exposure of personal and sensitive data:
http://www.finjan.com/Pressrelease.aspx?id=1261&P
Data loss:
http://dream.sims.berkeley.edu/MT/vanhouse/archiv
http://googlewatch.eweek.com/content/google_featu
Site failure:
http://status.blogger.com/
Privacy violation:
http://www.google-watch.org/bigbro.html
http://www.google-watch.org/krane.html
"Flyin' in just a sweet place,
Never been known to fail..."
---"A lot of things that people think of as core IT functions need to disappear into the ether so that the IT organization can properly focus on the value-added [activities]," he said. "Information security, as critical as it is, needs to be taken care of by organizations who live and die by it, who invest the money, time, resources and staff. Why should every company in the world have to build up their own expertise and have to maintain servers and provide security?"
It comes down to ownership and renting..
Would you rather own your home, or rent it? Would you rather rent a car or own it?
Thats right, we can pay Google Apps to take care of our network architecture because we cant be bothered with it... Until they perceive a "non-payment".. What happens then when the lights go out? Do the DNS servers stop working, do the samba servers get rm'ed? Or does the master-password holders (READ google) just shut down every network appliance you all are using?
Not smart. Not smart at all...
A company buys enormous data centers, the kind one might use to farm out a business' IT infrastructure needs, and then that company promotes... farming out business' IT infrastructure needs! Whaaa?!
stuff |
Just look at J2EE, EJB in particular. For many clients, it'd be cheaper to just write your own custom remote objects system using RMI. Cheaper and a lot easier too. "Enterprise" anything is typically very complicated and poorly documented. It's sad to see how bureaucratic it's become, but a lot of these things are, I think, complicated just to make work for people like consultants. I look at half the stuff that I have to work with, and it's far more complicated to get these huge, unwieldy apps to work together than to write most of the code.
Try signing up for Google Checkout to sell things on Google Base... It's a disconnected nightmare process.
Google does search & email well. The rest... right up there with everyone else.
Conformity is the jailer of freedom and enemy of growth. -JFK
IT organization can properly focus on the value-added [activities]
Yeah, I could see your point - if you define the function of IT that way. Most people out there though, don't. They see IT as the tech problem-solvers in the business. Fix that computer, hook me to such-and-such across VPN, get rid of my spyware.
If you want to have a group of guys doing value added activities, hire some engineers or more IT staff and define their job responsibilities that way. And once you do, don't bug them with other stuff. If they're supposed to be idea guys, let them do that and that only. Don't interrupt them with your secretary's spyware problem.
Weaselmancer
rediculous.
The Federal Government, which pays for most of the innovation in the US (directly through r&d contracts, or indirectly through grants) has cut back on its tech spending to free up money for the war.
Best Slashdot Co
More like 'lack of budget.'
How can we address 'lack of expanding?' Whenever someone trots out a Vista post we're reminded there's still businesses out there running on a Win 2000 network because 'it just works' and isn't getting replaced.
I'm sure the poor compitent sysadmin of that 2K network has plenty of ideas how to innovate their network, but they can't requisition the funds for it. Then there's training, dealing with the migration... Sure, it can happen, but no one outside IT sees the advantage in it.
Another major problem in Not Invented Here (NIH). Why does every organization seem to feel the need to invent their own solutions to standard problems? Why does every small shop seem to write their own inventory or accounting program? The needs are not that different from the "standard" solutions. Some places have seen a good acceptance of standard products, such as work processors and spreadsheet - imagine telling your company CFO that you don't like how Excel/OO-Calc works and you want to create a custom spreadsheet just for you company. Sure, most businesses can make good use of a few custom macros, but a custom spreadsheet for the MBAs? All of the outsourcing brouhaha a few years ago was the first step in this process: 1) Create innovative custom software, 2) other companies make simular programs, 3) outsource net revisions - creating a specialized knowledge base about that type of program, and soon, 4) somebody creates a standard product, 5) profit!
Really, office desktops should be more like the N64 A ROM cartridge with all of your apps that only get the new generation every 5 years. And the server side is even less interesting.
A Google exec telling companies to outsource IT, is like a Microsoft exec telling companies to use Windows.
Given Google's recent missteps; In a few years, suggesting we outsource core IT functions to Google might be as laughable as suggesting we outsource core IT functions to Microsoft.
This is flamebait but the sentiments are common enough to be worth responding to.
Patents, trademarks, and copyrights are not evil. Are they perfect? Of course not. They can be abused like any other rules. But without them you have a situation like that in China where IP is barely respected. Without IP laws it is virtually impossible to do anything innovative because there is little economic incentive to do anything novel. Create something profitable and you'll have thousands of knockoffs quickly follow. There is no value in being first.
Proprietary software isn't necessarily bad if someone is willing to pay for it. It should be a choice as much as possible but if someone is adding value with a proprietary solution (and not overcharging) that's not a bad thing. The problem comes when a proprietary solution controls basic infrastructure and utilities. (ala Windows) Then you have a serious problem that really can hamper innovation.
Are there problems with the current patent/copyright regime? Sure. They've been discussed here to death. Patent terms are FAR too long given the pace of the industry. Defensive patent portfolios are a serious issue. "Business process" patents are an abomination. Patents are granted on things like software where copyright is more appropriate. Copyright terms are ridiculously long and too supportive of corporate interests. Lots of problems. But they also create a lot of incentive for very productive and innovative work that would otherwise not exist.
"But open source will fix this" goes the cry. No it won't. Open source doesn't do away with basic economic principles. All open source does is shift where is is possible to make a profit to arenas which (hopefully) are less damaging to society. It's a good thing but it not only doesn't eliminate the need for IP, open source (in the GPL definition at least) depends on copyright laws for its very existence.
The way I see it is that you have trade offs. You can make things "simple" like Microsoft does by having software that makes assumptions about what you want to do. If you have minimal and non-specific needs, then you won't have much of an issue. You'll also be able to get away with less skilled workers to accomplish your basic goals. But if you want to do something very specialized and the assumptions don't support it, then that approach will get in your way. And your less skilled workers will become a detriment if you need to move to something a bit more complex.
On the other side of the coin you have other OSes (*nix OpenVMS and others) that have a good deal more flexibility in terms of allowing you to do virtually anything. But this will require more skill in your workforce and natually more complexity. There is not currently a way to have less complexity and a high degree of flexibility and power. There just isn't. Even Microsoft is learning that lesson as they add PowerShell (previously Monad) to Exchange 2007. They've finally seen the light that what you really want is a set of powerful and small tools that do one job well (the CLI) and then you layer your "ease of use" on top of that. So I expect that future MS products will probably earn the gripe of being "complicated" by less skilled people who entered the IT industry in the 90s as paper MCSEs.
There's no way around it. Computers ARE complex machines and they become even more complex when you want to do something really unique and innovative. This is why there is no equivalent of Exchange on the Mac OS Server platform. Zimbra is about the closest thing and it's not exactly friendly. But if you're a real IT guy, that's not a problem.
-"...bad old ideas look confusingly fresh when they are packaged as technology" - Jaron Lanier (Digital Maoism on Edge.o
But c'mon, I mean I can see what you're saying about getting a Linux tech but the rest of the argument doesn't really hold that much water. Most sane companies shouldn't all be using different types of PCs, in which you buy a random new one and aren't sure it will work. It can also depend on what you're using the computer's for. If it is some sort of obscure hardware interfacing that maybe windows only has a driver for then sure. However, office work and the like should really feel transparent. Throw some desktop icons on there of your office suite of choice and all the basic necessary tools (they exist) and you are good. Now if you're a MS Office poweruser that may be another problem since OpenOffice really isn't ready to replace MS Word in that respect and anyone who says otherwise hasn't really used Office beyond the basics.
Turn based strategy game that runs over XMPP. Phalanx
He's right about the problems.
It's not clear Google is the answer.
He doesn't explain how THEY deal with complexity except by throwing money and servers and data centers at it - which is pretty much how everyone else deals with it (and which is self-defeating eventually).
Self-defeating - almost a definition of the human condition.
Take IT in small business - or don't. Don't even get me started. I'm constantly getting clients who complain to me how long it takes for me to solve their problems. While I don't say it directly, the real issue is that EVERY small business using computers has done it wrong from day one. If they hadn't screwed up from the beginning, they wouldn't need to call me to straighten out their mess.
I doubt there is ONE small or medium business that hasn't screwed up. They bought the wrong machines, they bought the wrong OS, they bought the wrong application software, they bought the wrong networking hardware, they set up everything wrong, they didn't plan anything, they didn't ask anyone how to do it, they don't train, they don't back up, they don't maintain anything, etc., etc., ad nauseum.
Then they wonder why it takes a tech two days to do something as apparently simple as rebuild a PC.
It's because they are SO fucked up NOBODY could have done it faster.
NO human can take responsibility for their actions.
Richard Steven Hack - This sig is TOO GODDAMN SHORT TO DO ANYTHING USEFUL WITH! MORONS!
- Servers, e-mail, security, and whatever else "Google Apps" offers now or in the forseeable future is a small portion of any company that has any kind of serious IT going on. Most companies have a lot of custom apps, or at least highly-customized "off-the-shelf" solutions. I don't see Google offering a solution to reduce costs in that area.
- Any cost savings from outsourcing will not translate into increased corporate R&D. The PHBs and bean-counters will just give themselves raises.
- The PHB raises are not just because of greed, but because "forward-looking" on today's Wall Street means the next quarter -- thus no R&D.
- The biggest barrier to innovation is corporate culture. The Google exec even touts that as a benefit within Google, but fails to mention it as a barrier in companies other than Google. I still remember the first time many years ago that I made what I thought was an innovative suggestion within a Fortune 500 company, and then hearing the response, "that's nice to have," and feeling flattered. Only a few minutes later I came to realize that in corporate-speak "nice to have" really means "not nice to have" because "nice to have" is meant to mean "it's nice to have but not needed to have, so we won't be doing that".
- Sarbanes Oxley. Nothing much else happens in the IT departments of publicly traded companies these days except for SOX compliance.
- Innovation is easier when everything's in house. Having servers, e-mail, security, etc. outsourced creates barriers to deep integration and high degrees of customization.
Despite the wrongness of the Google exec's assertion, it will be well received by PHBs because they'll get to cut costs while simultaneously pretending to be in favor of innovation.Why should every company have an HR department? Why should every company have a payroll department? Why should every company have to maintain an accounting department? Why should every company have to maintain upper management? Why should every company need people to work in them, or janitorial staff, or mail rooms, or anything?
Lets start with payroll. You can, and probably should hire someone else to do that. A company like PayChex wiill figure all that out. All you need is a bookkeeper to compile everyones time sheets and record time off. Payroll companies figure out the tax withholdings. As far as all the other administrative functions of HR like benifits, seek out a company like http://www.alcottgroup.com/. My last job used them and as a result were able to offer multiple health care plans, multiple credit union memberships, and the oddball benifits of cruise discounts and cheap gym memberships that one expects from a large company. Yet they had only 100 employees.
Now lets look at janitorial staff. The only job I ever had without an outside cleaning staff was in a factory with a large supply of low paid unskilled employees. Generally a part time handyman on payroll will handle the odd jobs and a cleaning company empties the trash cans and vacuums each night.
As far as accounting, in a large company you need a CFO and the full hierachry of accounting people. In a smaller company you need a book keeper or two, and the owner can be the comptroller. Hire an outside accounting firm to act as your CFO.
The point of your company is to do something that other people need or want. You then get them to gtive you money in exchange for fufilling these wants and needs. Accountants and janitors are means to an end unless you're a CPA or a cleaninhg service.
All that being said, it might be advantageous to insource some things. For example if your dealing with complex cash flows and large amounts of money, you probably need an accounting department. If you have alot of office and plant space, you might benifit from internal facilities people. If your a very web centric business you might want inhouse IT, development or both. Quite frankly, that is becoming less and less of an issue.
so executives no longer have to be tied to the office: they can just make three decisions per day, then head off to play golf.If there in sales I sure hope their playing golf with clients. If you can get your business down to three decisions a day, that great. Start another business, create more jobs.
--- Justin Dearing http://www.justaprogrammer.net/ We're just programmers.
Ahem: Privacy.
The problem with using Google tools is that the data that goes into them is no longer "yours" in that it resides soley on your servers, your systems, etc. Google may claim to use this only for special needs, etc but the bottom line is that businesses live and die by their internal info and a combination of good sense and securities laws forces most of them to keep internal documents internally. As such using external storage of docs or google storage is limited by the extent to which they can trade that data away without losing their jobs.
Try telling your boss in a publicly traded (or worse yet private) company that what you should do is put your corporate secrets into someone else's hands, and that someone else specializes in mining and sharing information.
How is a company supposed to innovate if they outsource their staff? Solutions that are honed to very specific company needs can only realistically be achieved by staff that is there who has the business's interest in mind. Outsourcing is a step backward for innovation, not a step forward. Taking security as an example, since it's in the headline of the article....my team has saved the company quite a bit of money, time, and effort ... and is able to put management tasks down to less-skilled operations staff rather than have us involved by coming up with a custom firewall/vpn solution built around iptables and openswan. It works flawlessly at numerous branch office sites, and we even use it internally to segregate networks. Any outsourcer would not only provide less effective service in general, but would have used expensive to license and support hardware and software that likely is a real pain to manage.
Having worked in several IT shops it's very clear that, for many businesses, the day-to-day maintenance is dragging down the ability to innovate.
;)
The answer is not outsourcing, it's differentiation and adoption of IT functions in other business areas. Delegate account administration to HR, since they're in charge of adds/moves/changes for staff anyway. Complex security? Script it or document it, and have your sysadmin deal with the exceptions only. HR begins to discover the employees who can't ever remember their passwords, and somehow those people disappear.
PC Issues? Blue Cross had a great solution to cover the 80% of the non-power-users: Re-image your PCs during an acknowledged downtime at least once a month. (I think BCBS was doing it every Sunday night) Push back down all the apps (based on their group membership) that they use to do their jobs, along with the profile/settings transfer wizards if you want to be nice. Keep their files and settings in their home directory, where they need to be for backups anyway. Most Windows stability/speed issues disappear.
User training issues? One person per department or team group is designated as the app admin for that group's apps, and is paid extra for that function. Got an Excel/Access/great plains question, go see the guru in Finance. Got a PowerPoint question, see the Sales guru. Or make a training department who's goal is too serve as power users for each app that's under the corporate umbrella, and attach that department to HR or an Administrative function.
This kind of day to day stuff shouldn't be a protected IT function. More often than not, if you farm it out, the business will get the answers to questions that are holding them back, and IT can focus on the good stuff.
jb
Nick,
You make a great point, but I think it's more systemic than that. It comes from this post-90's view that all a company needs to do to boost its stock price is to close a few locations and fire 15% of their employees. Call it "Profit by the Thousand Cuts".
So IT directors are just taking their cues from the CEOs (because many of them want desperately to become CEO) and measure their job by how far they can cut costs. Forget about how miserable your internal customers are. Just the fact that the people who work in your company are now considered "internal customers" show that they are considered fodder, not humans. When you decide that with enough properly written protocols you can hire total morons and still get the job done, it's only a matter of time. You are finished.
There was a fascinating story last night on The Marketplace on NPR. It was about the fact that the steady growth in productivity we've seen in this country since, well, since the beginning is finally beginning to slow down. It means that we may have reached the limit of what you can expect out of workers, regardless of the income-level. We've squeezed workers to the point that marriages are failing, children are ignored and people have to be miserable if they want to pay their bills. Workers are made "management" so they can't get paid for overtime. The wonderful 7am "working breakfast" meetings become common. A CEO's effectiveness is measured by how many people he can lay off.
I had an uncle, an Italian immigrant, who measured the success of his business by how many people he employed, not how few.
Expect to see a renewed interest in collective bargaining in the coming decade. People are tired of being used. Squeezed. Being asked to give more while getting less. If the US is going to keep from becoming a third world country, we better realize that our people are our most important resource. The people who work downstairs, not the CEOs in the suite pulling down 9-figure incomes, who get 7-figure bonuses for closing factories.
Seriously, I pray we start to turn this around before blood has to be spilled over the division between The Rich and The Rest.
You are welcome on my lawn.
Many companies farm out sales. I can think of a couple easy examples.
First is manufacturers. Many use indepenent sales reps (manufacturer's reps) rather than an in house sales staff. They also use distributors who handle product sales to retailers.
Next is travel related businesses. They use all sorts of commission based plans to farm out their sales.
There are generic sales firms that will sell *anything* for a commission. You give them the leads and they will hit the streets. I've dealt with those guys. They are mercenary.
I've worked in a few different capacities in IT, from a system admin at a small start up and now a developer role. It seems consistent to me that IT is always made out to be a villain by upper executives whilst their own misguided decisions can be entirely ignored. I had a friend tell me some of the nightmares in Australia's flight company (the one which sounds like Quantums) before they decided to outsource to Indian companies. The consistent theme was an embarrasing mix of stuff ups between middle managers and upper executives which are never analysed. The summary was that due to a failed outsourced IT project (called e-ticket or something like that) it left them with a shortfall of something like $20m AUD. Solution - outsource your remaining IT to make up for it. From the sounds of it, the higher level IT project manager of the failed project then went on to work for the company that they'd outsourced to - and was given a nice hand shake payout as well. It seems that there are decent IT workers and managers out there, but yeah, there's a lot of dummies who don't seek to automate their work. However, as bad as they are, having non-technical upper executives making whimsical decisions seems to be the biggest cost to companies. Every year, IT is getting easier to do more with less, and should reduce the cost - but to want to entirely outsource? Meh, some people never learn. Why can't people (well executives) take a step back, and realise that we're doing a pretty complicated job - but that it's a necessary job, just like their own one. It's funny, but in Australia they've so completely buggered the IT workforce by pushing down salaries, they've now found a skill shortage - and consequently pay very well for good help. Well boo hoo to employers - they pushed many smart people into different professions, and now they try and whinge about skill shortages. Until people start realising that fostering a good skill base is a good long term strategy on a micro and macro level, this cycle is just going to keep repeating...