[PLUG] SuitWatch - September 30 (fwd)

Rich Shepard rshepard at appl-ecosys.com
Thu Sep 30 13:57:02 PDT 2004


---------- Forwarded message ----------
                             SuitWatch--September 30

   Views on Linux in Business

   --by Doc Searls, Senior Editor of Linux Journal
      _________________________________________________________________

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                            Shedding the Darkness

    Nicholas Carr cast a lot of darkness on the IT profession when his
    article, "IT Doesn't Matter", appeared in the May 2003 Harvard
    Business Review. Here's how he summarizes the piece:

      I examine the evolution of information technology in business and
      show that it follows a pattern strikingly similar to that of
      earlier technologies like railroads and electric power. For a brief
      period, as they are being built into the infrastructure of
      commerce, these "infrastructural technologies," as I call them,
      open opportunities for forward-looking companies to gain strong
      competitive advantages. But as their availability increases and
      their cost decreases--as they become ubiquitous--they become
      commodity inputs. From a strategic standpoint, they become
      invisible; they no longer matter.

    Later, he expanded his case in a whole book, Does IT Matter?
    Information Technology and the Corrosion of Competitive Advantage. In
    its preface he adds:

      IT's strategic importance is not growing, as many have claimed or
      assumed, but diminishing. As IT has become more powerful, more
      standardized, and more affordable, it has been transformed from a
      proprietary technology that companies can use to gain an edge over
      their rivals into an infrastructural technology that is shared by
      all competitors. Information technology has increasingly become, in
      other words, a simple factor of production--a commodity input that
      is necessary for competitiveness but insufficient for advantage.

      The emergence of a ubiquitous, shared IT infrastructure has, as I
      will show, many important practical implications, both for how
      companies manage and invest in technology itself and, more broadly,
      for how they think about creating and defending competitive
      advantage.

    Meanwhile, on IT's side, we have Paul Graham, author of Hackers &
    Painters. Graham is a hacker and painter whose fingerprints are on
    Lisp, Bayesian spam filtration and Web-based applications, among other
    things. He's also a helluva writer. This month he came out with a
    must-read essay titled "What the Bubble Got Right". Among its many
    quotable lines are these, which stand in stark contrast to Carr's
    whole case:

      Technology is a lever. It doesn't add; it multiplies. If the
      present range of productivity is 0 to 100, introducing a multiple
      of 10 increases the range from 0 to 1000.

      What would happen if you outsourced everything except product
      development? If you tried this experiment, I think you'd be
      surprised at how far you could get.

      ...in the coming century, good ideas will count for more. That
      26-year-olds with good ideas will increasingly have an edge over
      50-year-olds with powerful connections. That doing good work will
      matter more than dressing up--or advertising, which is the same
      thing for companies. That people will be rewarded a bit more in
      proportion to the value of what they create.

    There might seem to be no consistency between these two points of
    view, but there is. For that we turn to Phil Moore, Executive Director
    of the UNIX Engineering team at Morgan Stanley. At the O'Reilly Open
    Source Convention a couple months back, Phil came forward from the
    audience and said this:

      The trend I've seen in the last ten years...is the exponential
      growth in the variety and the depth and breadth of installation of
      open-source software in our infrastructure.... What I'm seeing is
      that in the infrastructure, the core infrastructure, open source is
      going to take over, leaps and bounds.

    The key word is infrastructure. It's infrastructure, built by IT, that
    gives Morgan Stanley enormous productivity leverage. Nicholas Carr is
    right to observe the commodity nature of ubiquitous IT building
    materials. What he misses, by maintaining a "strategic standpoint" at
    the top of the organizational pyramid, is the unique nature of those
    building materials. Unlike the mined and manufactured metals that make
    railroads and electrical grids, IT's goods are products of human
    creativity. Much of that creativity appears in products sold by
    vendors. But the infrastructural stuff--the material with the most
    leverage--is the product of creativity applied to practical rather
    than commercial needs.

    In open-source development, creativity is applied to many purposes,
    but none more than to the need for solid infrastructure. This is why
    the story of open source growth in the enterprise also is the story of
    IT infrastructure commoditization. It's also why the story of IT
    infrastructure commoditization is different from the story of any
    other commoditization in human history. Given the mental sources of IT
    infrastructural goods, all of it improves far more rapidly than
    anything else that has ever been given the "commodity" label.

    This means nothing could matter more than IT.

    Yet, while open source has committed advocates among the vendors that
    supply IT, some of those advocates are busy casting dark as well. Sun
    COO Jonathan Schwartz, while flattering Linux and open source, paints
    a picture of tough times in Sun's corner of the industry:

      It's tough to compete against a social movement. Especially one in
      which you're a believer. That's what Sun's been facing for the past
      few years when it comes to Linux. Linux represents all the ideals
      we've espoused for decades: openness, freedom, innovation, even
      open source (remember, Sun was started with open source)...

      But the past three years have been tough at Sun - we've been on
      defense against competitors co-opting that social movement against
      us. The economic distress experienced by our core markets (telco
      and financial services) started the storm clouds. But that was
      coupled by our hesitation (more on that in a later blog) to support
      Solaris on Intel or AMD microprocessors--a hesitation that left
      customers wanting to deploy x86-based systems with only two
      choices: Microsoft's Windows, or 'linux.' Given the latter's
      (deserved) popularity, coupled with a precipitous drop in telco and
      financial services budgets, it was easy (especially for HP and IBM)
      to say "Linux is responsible for Sun's problems." We were on
      defense.

    Larry Ellison, Oracle's Samurai CEO, says his industry "is as large as
    it's going to be". Mylene Mangalindan sums up Larry's rap:

      Ellison, sounding like a modern-day Cassandra, paints a dark vision
      of the computer industry's future: increasingly standardized
      products with little distinguishing technology and thin profit
      margins. Sweeping consolidation, prompting the death of 1,000 tech
      companies. Fewer start-ups. And a handful of category-dominating
      winners, which will control innovation.

    Like Sun, Oracle considers itself a friend of open source. It also is
    an aggressive advocate of Linux, with a programming staff that
    contributes to Linux kernel development. And Oracle sales also serve
    as a lever for moving more Linux into enterprise infrastructural
    roles. But the value of infrastructure naturally is subordinated to
    the value the goods Oracle runs on it.

    The way to cast light on all this darkness is by recognizing that
    there are two different though overlapping Open Source communities.
    One makes the goods, and the other puts them to use. Call them
    developers and implementers.

    The distinction between the two is as sharp and as necessary as that
    between the sources of building materials and the builders who turn
    those materials into homes and high-rises. We need to make this
    distinction because, as open source succeeds in the marketplace, the
    second group grows much more rapidly than the first, even as it
    remains much less visible.

    Developers are more visible than implementers because developers are
    the ones who make the goods. As sources of goods, it's easy for
    vendors such as Microsoft and Sun to see open-source developers as
    competitors. What those vendors need to see, along with executives at
    the tops of customer org charts, is that the Open Source community
    that matters most is the one we hear from least. For every Phil Moore
    who speaks up, there are many thousands of other IT professionals who
    quietly build open-source-based IT infrastructure.

    Their practices, which they improve every day and share with their
    colleagues, are no less important yet far more strategic than the work
    being done by the open-source development community on which they
    depend. Both are part of the same lever. It's time we started paying
    attention to the practical end of the thing.

   Resources

    Nicholas G. Carr's Site:
    http://www.nicholasgcarr.com/

    Carr's "IT Doesn't Matter" Article Page:
    http://www.nicholasgcarr.com/articles/matter.html

    Carr's Does IT Matter? Book Page:
    http://www.nicholasgcarr.com/doesitmatter.html

    Paul Graham's Hackers & Painters:
    http://www.paulgraham.com/hackpaint.html

    Paul Graham's "What the Bubble Got Right":
    http://www.paulgraham.com/bubble.html

    IDC Forum: "Why IT Matters":
    http://www.infoworld.com/article/04/09/28/HNitmatters_1.html

    CEO Says Tech Future Grim:
    http://www.pushhamburger.com/teck.htm

    UNIX History:
    http://www.levenez.com/unix/

    "The New Silicon Valley: A Dog-Eat-Dog World":
    http://www.naplesnews.com/npdn/business/article/0,2071,NPDN_14901_3208
    760,00.html

    Neal Stephenson's In The Beginning Was the Command Line:
    http://www.spack.org/wiki/InTheBeginningWasTheCommandLine

    --
    Doc Searls:
    mailto:doc at ssc.com is Senior Editor of Linux Journal. He writes the
    Linux for Suits column for Linux Journal. He also presides over Doc
    Searls' IT Garage:
    http://garage.docsearls.com, which is published by SSC, the publisher
    of Linux Journal.
      _________________________________________________________________




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