Archive for the ‘Miscellany’ category

The Recession, The Tech Downturn, et. al.

January 23, 2008

For the sake of candor and clarity, let me be explicit: we are in an economic recession.

Let me also be explicit about the impact of the recession on the IT industry:  we are already in the midst of a significant downturn in IT spending – not only for small and mid-size businesses but for “the enterprise.”  This downturn is reflected in traditional symptoms, and predictable consequences: 

  1. Yahoo announces layoffs.  For every company that publishes a layoff strategy, there are dozens of others now doing so without fanfare.  In this business, they are called RIFs (Reductions In Force) and are executed in a stealth fashion but with the same objective: temporarily improve operating margins.  The fact that layoffs have long-term negative consequences never prevents executives from pulling this trigger.
  2. Apple warns The Street about the next quarter.   For every bellweather company (i.e., stocks that are worth holding for the long-term) that has the courage to forecast their concerns, there are dozens scrambling to tightly manage expenses (postpone implementations, terminate consulting contracts, institute hiring freezes).
  3. Consumer Confidence wanes.  As I have stated to analysts for five years, there is no difference between enterprise IT spending and consumer confidence statistics.  Companies are simply aggregated consumers.  Consumers worry about their jobs and mortgages; companies worry about stock prices and nervous customers. 

I said this yesterday in a phone call with a New York analyst with whom I’ve worked for many years.  She asked the question that haunts everyone who invests (either their time or their money) in tech stocks:  Is there anything on the tech horizon that can be viewed in a positive light?

I’ve been considering the question all night and morning, but before I offer my tentative and humble response, two important disclaimers:

  • I do not own any tech stocks, nor am I affiliated with any institutions that benefit from them.
  • I might be wrong.  But I don’t think so.

The current recession/downturn is not new.  The 80’s and 90’s have clear examples of similar events, and the process for unraveling the complex issues leading to a rebound always take longer than most economists care to admit.   The current mortgage crisis is different than the “bubble burst” of 2001-2002 (the natural ebb and flow of exuberance followed by caution and/or panic) because of our national debt.  It was only eight years ago that we benefited from a balanced budget.  I hesitate to introduce politics into this discussion, except to point out that when we (as individuals or as a nation) are in massive debt, our capacity to rebound is severely limited.

The Fed reduction(s) in interest rates are important, and certainly helped to avoid a disaster yesterday on The Street, but we can’t perform such tricks every day.  We simply don’t have enough silver bullets.  And Congress?  The overall economy will be worse by the time legislation passes, and frankly, if I am one of the lucky ones to get a rebate check, I’m not going to suddenly feel better and start buying new gadgets with my $800.  I’ll pay my rent or my Blue Shield bill.

What could the Congress do (not in any current plans that I have heard/read)?

The best business incentive imaginable would be to substantially reward companies that retain as many employees (or, even better, have more employees) at the end of 2008 than they have today.  In other words, motivate employers to keep their employees on the job.  Jobs = Confidence = Spending.   Seems sensible, so why haven’t we ever implemented such a strategy?  Because reducing costs (layoffs) has a short-term boost on operating margins, and investors remain overly focused on next quarter’s results.  Our focus on next quarter is a disease for which there is no cure.

For the discerning reader, I haven’t forgotten my colleague’s question: Is there anything on the tech horizon that can be viewed in a positive light?

Positive trends for 2008 will not be evident in the next six months.  Consider this the winter of our discontent.  But the first signs of recovery (by the end of this fiscal year) will likely be seen here:

  • Mobile Devices and the content transported to them – because they are ubiquitous, and they are the platform for the younger generation of consumers who will graduate into the workforce and replace (because of lower entry-level salaries) those of us with grey hair who may or may not have our current job by the end of this year. 
  • Advertising – because it is the pathway to new customers when your company has lost revenue.  Increased IT budgets will be one of the last signs of recovery; advertising budgets will be the early indicator.
  • Innovation within IT organizations – because of necessity (innovation’s mother), we will be driven to build solutions that cost $40,000 instead of buying one for $400,000.  When IT begins to create solutions that can be re-packaged and sold, we become a revenue-generating team rather than a cost center; slowly but surely, we’ll be allowed to spend some of that innovation-driven revenue with our vendors/partners who, by that time, will be heavily discounting products.

This isn’t a pretty picture, folks.  2008 (the entire year) will be characterized by cost-cutting, not spending.  As for the national debt, it will be another 6-8 years before we can repair that damage.

The recession is here.  Don’t debate it.  Deal with it.

Even Vint Cerf is talking about the Mirror…

February 22, 2007

Confirmation of these central principles comes from many places, and the opportunity to discuss my book with such intelligent readers and industry analysts continues to be a stunning and unexpected reward for the time spent writing this book.

 The latest confirmation, of course, can be found on, where Vint Cerf offers his comments on the nature of the Internet, and how it reflects our society. (  His examples, of criminal behavior and intent, are certainly part of the overall framework, however, it is much more than a reflection of our worst characteristics.  Like a mirror, our systems reflect the good and the bad, the infirm and the rigid, the dynamic and the static.  Like that mirror, we tend to blame the systems rather than doing the harder work of what Steve Yatko at Credit Suisse has called “re-architecting ourselves.”

In the past few months, admittedly ignoring my responsibilities for this column in response to personal challenges, I’ve had the chance to discuss The System is a Mirror with Paul Kwiat, at the University of Illinois (Quantum Computing) who, with his exceptional graduate team, is studying this at the level of photons (when they are “split, they are called “daughters”).  They are examining the behavior of incredibly small particles, challenging the linear nature of time, and their work raises new and (in my opinion) fascinating issues about our entangled relationships, with each other, with our systems, with our data, and deeper, to the very core elements of which the universe is composed.

In IT, the “stack” will go away.  I discussed this yesterday with the President of EMC Software, though he admits that our current legacy systems remain an important requisite of our attentions.  We are moving, as an industry and as a society, to “the presentation layer” where our community and our technology converge.

This is the very heart of what we should be discussing, as professionals, and as citizens.  To remain focused only upon the machinery is both short-sighted and a kind of denial.  There are many more layers/levels of interaction at work, mirrored in the systems that we build, and it is time for a broader discussion of what our reflections tell us about where we are going, and what we should be doing, along the way.

The Second Life (of IT Management)

October 24, 2006

Today’s lunchtime conversation with the CFO of Navis ( highlighted one of the many confusions that plague our profession: if we are plumbers, they want us to be architects; if we are architects, they want us to be visionaries; if we are visionaries, they want us to be plumbers.

It is the nature of an industry in its adolescence, wherein the needs are many and the resources are few, an industry best known for problems – inadequate backups, poorly blocked spam, legacy system burdens, staff burnout…The primary assumption: if there are no deficiencies in your information systems, you are probably spending too much money on them.

Alan at Navis is among the few Chief Financial Officers who appreciate IT, and the dedication of an over-worked staff.  Others, in my career, Mark from Documentum, Dave from Synopsys – they recognize the value of a solid infrastructure and layer of applications in the success of a modern business.   The most interesting aspect of today’s conversation was the realization that Organizational Architecture (the capacity to adapt to new projects/initiatives with an adaptable organization rather than a rigid hierarchy) presents a challenge to executives seeking competent IT managers: should they sacrifice technical skill for people skills, or will that simply create an aloof management team that is no longer capable of laying network wire or rebooting a router?

My response: with the exception of recent graduates who do not yet have any customer/business background, it is easier to take the escalator downward from solid IT theory to the application of theory in practice, more difficult to ride an escalator upward from practician to businessperson.

The inclination, among many in the profession, is to point a finger at the educational institutions that emphasize systems, or to point a finger at executives who simply do not comprehend “how their own automobile functions” yet criticize mechanics.  However, it seems to me (yet another mirror analogy) that we, in IT, need to look at our own reflections and shrug the chip of our collective shoulders.  Just because we’re under-appreciated, underpaid and overworked does not mean that we are not ultimately responsible for our own well-rounded skill set.  We cannot wait for the servers to go down or telecom systems to become unaffordable before we leap into action.  We should be speaking to our colleagues, reading about new technologies and concepts, sending our teams to training.  We don’t want our doctors to be relying upon 5 year-old information, and we shouldn’t want our IT staff to be similarly bereft of knowledge.

I recently joined Linden’s Second Life community, and the virtual world is compelling.  There is an allure to the avatars, the interactions, the new economies that exist solely on the net.  I can imagine that most of us would much rather spend time exploring this new world than taking refresher courses on email archive-and-recovery strategies.  Such apparently contradictory uses of our time need not be an Either/Or. 

Create an avatar that looks and talks howsoever you want, and have the avatar become your research assistant – the Second Life world can be a diversion but it could be much more: a training tool, a team-building environment, a place to test your hypotheses with others who may have much more experience than you do about the very problems you are trying to solve at work.  That world can be as collaborative as any real-time data center, in fact, at its core, it is a real-time data center with a sophisticated user interface.

It need not be a game, this thing we do.

Hello to those that know me and those that do not…

August 13, 2006

Since I was 12 years old and first realized a writer’s words (books, poems, essays) can actually be extended independently to a broader audience, I have remained fascinated with the possibility of the Idea being received before rather than after Proximity.

Therefore, many of you (visitors to the site who have never met me) will be inclined to respond to the latest postings, or to offer your own ideas – please do so, for if this were not dialogue, I could simply write a white paper and publish it on my website.  Agree where you can, disagree where you must, you are invited to engage in any manner suited to the topic(s) at hand.

For those of you who do know me, either from another universe and time zone or from previous events and conversations, I hope that you can read the book and extend it in these postings:  perhaps you will question a paradox based upon what you know beyond the covers of the book, perhaps you would prefer to speak with one of the characters directly, or just remind me that I’m being a bit redundant in these entries…

Every reader’s perspective creates a new entity.  Like the photon experiments or Schroedinger’s Cat or the wave/particle definition, these stories now exist in your minds, in your universes, and with every new reading, the Idea expands, takes a different shape, a different meaning.

My preference, at this stage (having written these stories over the past two years) is an investigation of Time (non-linear, subjective, and the possibility that interacting with point C (in this blog, for example) before you have traversed points A and B creates a different framework, a different architecture.  (The classic conundrum of time travel – if you traveled back to your grandfather’s youth and killed him, would you cease to exist, and if you ceased to exist, will he live on?…)

In my opinion, it is not a matter of physical travel, but of synchronous thought.  It is not a matter of proximity in space, but rather, proximity in time, and the possibility that one may move along one’s path in ZigZag form (with apologies to Ted N. for the use of his term in a different context) or in years that are cubes positioned side-by-side.

Imagine our chronology of thought as a Grid, infinitely matrixed, multi-directional, affording many more plotlines (Q Narratives) than merely A->B->C. 

Consider the consequence of computing services (University of Illinois) that can answer questions before they are asked.

Consider reading the last chapter first or these blog entries in reverse order, or not at all.  Then, and by all means, respond… 

The First Day

June 13, 2006

For someone so familar with a daily writing routine, and so embedded in network phenomena, I am somewhat chagrined that it is only now that I am beginning the blog.

I am launching this site to begin a conversation.  While it begins and ends with principles proposed in my book, The System is a Mirror (in bookstores on August 7), I'm certain that many subjects related to humans and computers, over the course of time, will announce themselves.

This morning, I presented my Prime Theorem at the Ventana Research Analysts Conference in San Francisco.  That theorem:  we mirror ourselves in the systems that we build, and therefore, to transform our systems, we must first transform our organizations.  (See my consulting website for more information about the book):

Everyone "got it."  Some even suggested that it makes them think about IT in an entirely different manner.  One or two of the more lethargic attendees seemed to be asking, "OK, so far so good. Keep going.  What's next?"

Thanks to the team at Ventana for inviting me to speak about the book, and my notion that all IT projects (Grid, SOA, distributed, diffuse) must now involve this central theme.  The conference's overall agenda focused upon Performance Management (what does Cognos and the SunTrust Racing Team have in common?) though, in the end, it seems to me that Performance Management is a new phrase describing last year's Operational Excellence, etc etc.

To me, the key issue remains: why do we, as IT executives and managers, wholeheartedly agree that the technology is the easy part, and that 95% of our real problems are on "the people side."  And yet, we continue to focus only on the technology.  In turn, our vendors only focus on technology.  In turn, the press and The Street focus on technology.

We are the platform.  We are the key components on the network.  And we still do not know how to manage ourselves.