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Lack of Innovation in IT Holding Companies Back?
Posted by
ScuttleMonkey
on Wed Jan 24, 2007 01:02 PM
from the phb-minus-minus dept.
from the phb-minus-minus dept.
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?"
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Executive Summary (Score:5, Informative)
See any serious problems with this story? Sure! "Lack of content" springs to mind.
Re:Executive Summary (Score:5, Funny)
Google Executive says, "You should use our products."
Parent
Re: (Score:2)
Re:Executive Summary (Score:4, Insightful)
Let's see farm out the security and core operation of the company's IT infrastructure to another company. Will you give them key's to the building and the combination to your safes as well? Because they will have access to all your plans, documents, and other information that is secret to your company... These managers never pull their heads out of their ass far enough to see that until you spell it out for them. We had to do that at Comcast once. They wanted to have a 3rd party company take over some critical security, Executives were unwavering until they were told point blank, "do you trust this company with your private info and the contents of your laptop? Under Sarbanes oxley, if they screw up it's YOUR HEAD that rolls not theirs..."
IT is a cost of doing business, just like sales and marketing, why the suits want to farm out everything they do not understand themselves is never understood by those that actually do the work. They never farm out SALES or management to a 3rd party, IT is as critical to the business as sales and management.
Parent
Re:Executive Summary (Score:5, Insightful)
You already give your keys and access codes to your "physical" security company.
Parent
Re: (Score:2, Insightful)
Many companies farm out sales (Score:3, Interesting)
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 gu
Re:Why "the suits" like to farm out IT. (Score:4, Insightful)
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.
Parent
Re: (Score:3, Interesting)
Complex systems require a certain amount of vertical application expertise by definition, at least if an effective level of support is the desired end result.
Often this expertise takes several *years* to develop effectively.
In many industries, that expertise also tends to be company-specific in nature (and not just industry-specific) because the application software is very tightly coupled to
Re:A pretty dumb executive (Score:5, Interesting)
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/ [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.
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.
Parent
Watch 'em "improve" the situation! (Score:2, Interesting)
Cross-site scripting exploits:
http://blog.outer-court.com/archive/2007-01-01-n12
http://blogs.zdnet.com/Google/?p=338 [zdnet.com]
Exposure of personal and sensitive data:
http://www.finjan.com/Pressrelease.aspx?id=1261&Pr essLan=1230&lan=3 [finjan.com]
Data loss:
http://dream.sims.berkeley.edu/MT/vanhouse/archive s/000663.html [berkeley.edu]
http://googlewatch.eweek.com/content/google_featur es/google_email_troubles_continue.html [eweek.com]
Site failure:
http://status.blogger.com/ [blogger.com]
Privacy vio
Re:Watch 'em "improve" the situation! (Score:4, Insightful)
Note if your company looses all its email data it will not make the news unless you are hosting for people outside your company.
This stuff really happends far more frequently with self run IT shops. Google is a lot better then the average. They are not perfect but better then most.
Parent
maybe they haven't read Nicholas Carr (Score:2)
Astonishing imbalance (Score:2)
I work for a medical device manufacturer that brings incredible levels of scrutany to its suppliers. The parts we receive from them must strictly meet requirements and are carefully qualified. So how is it the same company tolerates the dreck software that comes out of Redmond, pays millions annually for it, and must employ an army of techicians to keep it running? It is an astonish
Re: (Score:2, Insightful)
My god... (Score:4, Insightful)
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...
Re: (Score:3, Interesting)
You get the drudge work standard maintenance & operations done by a trusted qualified vendor.
Medical Device firms have been specializing for the last 15-20 years and their is now an ISO standard for Strategic Partner relationships.
One company does manufacturing only for a range of "Medical Device Companies" but Strategic Partners often do all the manufacturing.
Only the trade secret, bleeding edge, developmental and core competancy items are retained in house.
Re: (Score:2, Offtopic)
And while the stock market appreciates on average 10%/year, the real estate market is only 6%/year. Equity in real estate is wasted money.
Rent.
Re: (Score:2)
No thanks, I prefer to have a bit more control over my destiny. When I last rented, the landlord raised the rent 4% per year (the maximum allowed in rent-controlled San Francisco) every other year. My house payment (which is tax-deductible, btw) will be the same in five years as it is right now.
Re: (Score:3, Insightful)
Real estate, on the other hand, provides you with a place to build a home. or a business. Or.... and this will be shocking, I know, some apartments with which you can then allow people to rent from you. At which point you'd get to earn not only the 6% real estate but whatever interest your netprofits on the rent earn you.
Re: (Score:2)
Re: (Score:2)
Keep the Data yourself in an open format
Pay for service in advance just like you would if you bought the materials/talent necessary to do it yourself.
You don't "buy" software anymore anyway (Score:2)
Re:My god... (Score:4, Interesting)
Those are bad analogies because that is apples and oranges comparisons.
By default if given the choice you should own a home (even though the bank still owns it for the next 30 years) because house prices increase whereas you car price decreases.
This is what makes leasing attractive to some, but that is almost the same as owning.
By what you really mean would be would you rather take public transportation to work or own your own car to work.
The traveling to work is not the end result of your actually work and not even an actual process of it other than getting your feet to it. Given the choice of maintainece you most likely can't fix your own car anyways so if it breaks you have to hand it off to a 3rd party.
If public transportation breaks, you'll see a delay but you won't actually have to pay for it directly and chances are they will route a new bus to your pickup.
But you can't add your own custom products to the public system and you can't make it go to exact places at any given time like your normal car. So both have their benefits and detractors.
Parent
Shocking! (Score:5, Insightful)
Complex? Oh yeah (Score:3, Interesting)
Re: (Score:3, Insightful)
Nowadays, Thou Shalt use Web Services. This means layers of super complex descriptors, marshaling code, etc. It seems as though one is always fighting
Google doesn't have the answer. (Score:4, Insightful)
Google does search & email well. The rest... right up there with everyone else.
The problem is in your definition of IT (Score:5, Insightful)
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.
Another side effect of the Iraq war (Score:5, Insightful)
Re: (Score:3, Interesting)
Re: (Score:3, Informative)
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.
Defense money, now as in the 1950s, does in substantial fashion go to tech innovation. You might have heard of a few of the (D)ARPA projects; in fact, you're using one now.
Lack of innovation? (Score:4, Insightful)
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.
I can see it now (Score:2)
Smart companies read this report and outsource customer data security infrastructure, which after all is just a cost center, but maintain the same old IT staff to protect their own earth shattering competitive corporate secrets.
Control, Flexability, and Lack of Dependencies (Score:4, Insightful)
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.
Re: (Score:3, Insightful)
No, it's like Microsoft telling companies to use commodity software, rather than writing their own. Which makes a whole lot of sense. Just like in the Google case, you lose flexibility. Also like the Google case, it's Good Enough for many situations. Again like the Google case, we should hope not everyone outsources to the same company.
"Lack of Innovation" examples? (Score:2)
It's a simple equation (Score:2)
Of course. The people at the top don't understand technology. The people at the bottom that do, don't sell it to the top. The people at the top don't ask for input from the lower ranks to guide change. So there will never be a coherent vision of technology. The largest companies (the non-tech ones) will always be 20 years behind on technology. The peo
Re: (Score:2)
It's not for lack of trying, believe me... :-(
I Agree (Score:2)
If even 50% of the effort spent on duplicating old things was spent implementing new things, a lot of progress could be made. It's not really
Insane Complexity? (Score:5, Interesting)
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.
Here it comes (Score:2)
New Executive Summary (Score:4, Interesting)
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.
Outsourcing does not lead to innovation (Score:5, Interesting)
- 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.I blame Software Patents (Score:2)
IMO, SW patents are propably the only type of patent that has such a low value (as in $) that nobody would refer to it to improve or add value to an existing project, expired patent or not!
This is another inevitable trend (Score:2)
1: Get out there and compete with Google. Build your own data centres and application services.
2: Find a niche they aren't filling.
3: Build/write a Google killer.
4: Do something else entirely.
Why most businesses can't use Google tools. (Score:3, Insightful)
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.
and outsourcing is the solution? (Score:3, Interesting)
Re:The simple shocking ugly truth (Score:4, Insightful)
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.
Parent
IP isn't evil. Flawed but not evil. (Score:3)
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