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Dollars & Sense:
Luddites, Beware!

  Column published in DM Review Magazine
February 2004 Issue
  By Susan Osterfelt

Here comes "computing as a utility" -- what IBM calls "on-demand computing" and HP called the "adaptive enterprise." Whatever you call it, its focus is on automated management of various components of the information technology (IT) infrastructure, and "it" is definitely on the way. It involves dynamic resource management, reallocating and repurposing resources where they are needed most to meet changing business requirements. Computing as a utility will forever change the way IT is viewed. Perhaps this different view of IT started with author Nicholas G. Carr and his controversial article entitled "IT Doesn't Matter" that was published in the May 2003 issue of Harvard Business Review. Or maybe it started with one of the technology research analyst firms' vision into the future of computing. Whatever started it, it is here to stay.

What is driving this move toward computing as a utility? Three things are driving this move. First, the cost of computing today is too high. The costs of separate, non-standard and non- interoperable components are fundamentally higher than costs of components that can be shared. Also, think about the ability to share peaks and valleys in capacity utilization, and its potential to drive costs down. Second, there is an increasing need for business flexibility -- the ability to quickly respond to market changes. The complexity of the IT infrastructure today prohibits the quick and easy implementation of a change in business priorities, and business is now simply demanding a change. Third, there is a need for improved, consistent service levels. Service levels need to be higher, predictable and stable. Again, the complexity and fragility of today's IT infrastructure makes guaranteeing improved service levels risky business indeed. Things obviously need to change.

What does computing as a utility mean for the data center? Problem diagnosis will be automated, using root cause analysis to help measure and manage service levels. It will even mean the ability to predict when degraded components will affect users. Self-healing hardware and software will emerge and become the norm. Perhaps the most dramatic effect will be from resource sharing/optimization, where workloads can share computing resources, obviating the need for separate resources (server, operating system, storage, database, etc.) for every application.

What does computing as a utility mean for IT personnel? Remember that the first factor driving the move toward computing as a utility is the need to drive costs down. Labor is the highest portion of IT costs. This means that the major impact will be the loss of basic jobs. One of the ways to drive the overall cost of computing down is to reduce labor costs by reducing the number of people it takes to support and maintain systems and infrastructure. Automating tasks and making IT more like a utility can cut labor costs dramatically.

This is where the Luddites come in. Luddites originally flourished in Britain from 1811 to 1816. They were organized bands of men whose object was to destroy machinery used mostly in the textile industry -- weaving machines and the like. There was a general resentment of machinery, which was seen as threatening and unfair. The use of the word "Luddite" implies an irrational fear and hatred of technology, especially where it puts people out of work. There are Luddites today that fear the onslaught of on-demand computing because it threatens to put them out of work.

However, machines have been putting people out of work for several centuries; the industrial revolution provides many examples of this fact. Therefore, it should come as no surprise that on-demand computing, or computing as a utility, is arriving or that it will have this kind of effect. Job displacement has been and will continue to be an inevitable result of the remarkable inventions and achievements of the last 50 years. In every previous case (and this case of computing as a utility is no exception), people have lost jobs and have had to upgrade their skill sets in order to continue to obtain gainful employment.

If you are threatened by the future of on- demand computing, you are not alone, but you need to get over it. You may need to upgrade your skills to add value to IT in the future. However, this is a natural evolution and one that provides overall improvements in the way business utilizes technology. Instead of smashing the weaving machines (as it were), perhaps it would be better to reassess and improve your abilities to contribute to what promises to be an exciting future for IT.


For more information on related topics visit the following related portals...
Strategic Intelligence.

Susan Osterfelt is senior vice president at Bank of America, in Charlotte, North Carolina. She can be reached at susan.osterfelt@bankofamerica.com.

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