Tag: technology

The Death of the IT Guy

The IT support sector is being disrupted as cloud computing service shake up what was a settled industry.

Until recently the cottage industry of computer repairers was thriving, having been born with the massive take up of computers by homes and businesses in the 1990s.

Over the years, things got better for the local IT guy as businesses and then homes became networked. Some of the smarter technicians started selling and supporting servers and things got better.

The arrival of the Internet, the approach of Y2K bug and, in Australia, the introduction of the GST made even more business for the local computer tech and the Windows virus epidemic of the early 2000s guaranteed plenty of work for anybody who knew how to wield a screw driver and a boot disk.

As the industry matured, maintaining office servers and looking after the regular glitches in desktop computers was a steady, reliable source of income for most support companies.

Every few years businesses or homes would upgrade their computers and that would trigger a cascade of costs as data was migrated and older peripherals like printers, serial mice and ADB accessories had to be replaced.

Then all came to a stop with the arrival of cloud computing services where many of older computers could access online applications just as well as newer computers.

For IT organisations with a business plan based up customers upgrading systems every three to five years this was a disaster.

These businesses were already feeling the pinch with the late arrival and market rejection of Microsoft Vista and now their customers could sit on older XP machines and happily use the latest online applications.

Sensible IT folk have understood the change and the good support companies now have an armoury of cloud based services for their customers. These businesses know the IT hardware and support spend of most businesses is shrinking and taking the market with it.

Unfortunately there are a few holdouts trying to keep the old business model alive who have a hundred reasons why cloud services are no good for their customers.

To be far to those fixed on the old IT model, this attitude is probably even more prevalent in corporate IT departments and among CIOs with cloud services seen – probably rightly – as a threat to their power and income.

One of the biggest risks to those support folk who aren’t at least evaluating cloud services for their clients is that shrinking IT spend and eventually there won’t be much money, or customers, left for the old model.

A similar thing is happening to bookkeepers and accountants as newer businesses and those with younger owners or managers are moving to cloud based software while the older ones are wedded to their legacy systems.

The older accountants who won’t move to the newer systems are finding their businesses growth stagnant while their younger colleagues are picking up the work from new businesses.

Computer support was always a business based upon the transition to a digital workplaces, similar to the men employed to walk in front of early motor cars with red flags.

Now workplace technology has matured, there’s less work for the IT guy. Hopefully most of them will make the change and not get run over like the guys clutching red flags.

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On being a Luddite

Being skeptical about technology isn’t the same as being a Luddite.

“I’m a Luddite”, magazine editor James Tuckerman proclaimed as Master of Ceremonies for Microsoft’s Asia Pacific Bizspark Summit this week.

James was referring to an article in Australian Anthill in the 1990s where he predicted businesses would never use the Internet for research.

Being a Luddite isn’t a bad thing, James contends. In his view being skeptical about technology enables business owners to better evaluate technology as Luddites “think like a layman, don’t know the limits and think commercially”.

None of this is true though – being a skeptic is not the same as being a Luddite.

The original Luddites in the English Midlands weren’t anti-technology, they were opposed to the technology that would put them out of work.

At the beginning of the 19th Century, mill workers were a highly skilled and extremely well paid trade but the new automated loom technology meant those skills were no longer needed.

To protect their livelihoods, the loom workers started smashing the new machines and burning down factories. Eventually they were viciously suppressed by the British government with some being executed while others were transported to Australia.

What drove the Luddites was the loss of their income and who is to say we would have behaved any differently if we were faced with being unemployed and destitute in the harsh conditions of 19th Century England.

However we shouldn’t equate being skeptical about technology with being protecting one’s turf.

Today’s Luddites are those businesses who don’t want to move with the times – those who have grown fat on easy credit or lazily clipping the tickets on state sanctioned monopolies.

Some of those Luddites are going broke as consumers stop buying electrical goods or cars, while others lobby their friends in government to protect their privileged and profitable positions.

In the early 1800s the Luddites eventually lost, we can only hope that when history repeats itself two hundred years later today’s Luddites haven’t damaged the economy too much.

James Tuckerman isn’t a Luddite and that’s why he’s part of the future. I just wish he wouldn’t call himself one.

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Hubris and risk

Technology brings benefits and risks, we need to understand both

Today is the centenary of the Titanic’s tragic sinking. In many ways, the RMS Titanic described the 20th Century conundrum; a blind faith in technology coupled with a struggle to deal with the consequences of those innovations.

It’s worthwhile reflecting on the hubris of those who believed their technology made a ship unsinkable, or those who believed their shipyards would never close and – probably most relevant today – those who believe the sun never sets on their empire.

Technology can liberate our lives which is shown by the fact the average American, European or Australian lives far longer and better than even kings did two centuries ago. But we should never assume these improvements don’t come at a real cost to ourselves, the environment or the ways of life we take for granted today.

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The death of sport

Sports groups have always felt threatened by new technology.

In the 1960s, sports administrators refused TV replays of games because it would affect their revenue.

Sports broadcasting rights were invented.

In the 1970s, sports administrators resisted live TV coverage of games because it would affect their revenue.

Sports broadcasting rights became lucrative.

In the 1980s, sports administrators claimed TV viewers using video recorders would affect their revenue.

Sports broadcasting rights became more lucrative.

In the 1990s, sports administrators worried cable and satellite TV would affect their revenue.

Sports broadcasting rights soared.

In the 2000s, sports administrators warned the Internet would affect their revenue.

Sports broadcasting rights soared further.

In 2012, sports administrators shout that cloud computing services will affect their revenue…….

Photo courtesy of mzacha on SXC.hu

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A blind faith in technology

Sometimes we still have to use our judgement

“How could this happen with all the technology these ships have?” is the first question many of us had when we saw pictures of the Costa Concordia lying on its side with a ripped hull.

In an era where we have Global Positioning Systems, sonar, radar and sophisticated mapping technology it seems almost impossible that a ship could find itself in such a terrible situation.

Every generation has its own blind faith in the technology of the day and almost a hundred years ago one of the greatest shipping disasters of all – the RMS Titanic – happened because of the same belief in that era’s technology.

While the Titanic’s builders claim they never said the ship was unsinkable, popular belief held the vessel was the safest of all ocean liners with sophisticated steam engines, modern safety designs and better communications tools like the radio and Morse Code.

Those technologies were part of the Titanic’s undoing; the improved performance of steam ships saw the shipping companies competing for the Blue Riband prize of the fastest crossing of the Atlantic, meaning captains took risks they wouldn’t have with less technically advanced vessels. This is why the Titanic found itself in an ice field.

Once the ship was struck another problem with our blind faith in technology arose – we never foresee all the consquences.

In the Titanic’s case there weren’t enough lifeboats – the safety rules of the day had fallen behind the capacity of the ships and, while the Titanic exceeded the minimum number required, there were barely enough lifeboats to take a third of the passengers.

The Titanic’s sinking has some similarities in that today cruise ship companies are in an ‘arms race’ to build bigger and more luxurious liners, marketing them as floating resorts raising concerns among maritime experts that the capacity of these ships is too great for them to be evacuated quickly.

Of course we have to be careful of drawing too many parallels between the Titanic and the Costa Concordia, the Titanic’s loss of life was several orders of magnitude greater than the Concordia’s and the Titanic happened towards the end of a period when technology looked like it would solve all the world’s problems.

The sinking of the Titanic was also the peak of the Edwardian standards of “women and children first” and “for King and country.” Only one in six of the third class male passengers and half of that in second class survived.

A few years later, the clash of Edwardian culture and modern technologies was starkly shown when millions died in the trenches of France, Belgium and Gallipoli as generals applied 18th Century cavalry tactics against 20th Century weapons. Another example of not understanding the effects of new technologies.

Whenever we adopt a new technology there’s a risk we’ll get it wrong and blind faith in tools we don’t understand can lead us to a disaster.

Even in a business we can’t just accept that because a computer says “yes”, the answer is yes. Sometimes we have to think.

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Business is fine

Everything is good in business, until one day it isn’t.

“I don’t need high speed broadband,” snarls the businessman in a country town, “business is fine as it is.”

A hundred years ago this year the iconic Australian horse coach company Cobb & Co went into its first bankruptcy as it declined from being the dominant transport service of rural Australia.

Cobb & Co was founded in 1854 by four young Americans in the Victorian gold rush and grew around the expansion of Australia’s rural farming and mining industries. By 1900 the company had 9,000 horses travelling 31,000km (20,000 miles) every week.

By 1924 Cobb & Co was gone. Displaced by the motor car and restrictive state government rules designed to protect their railways.

Many businesses, including the management of Cobb & Co, thought the motor car was a fad. No doubt many at the time also thought electricity was dangerous and unnecessary.

Business worked fine as it was when stagecoaches carried the mail and bullock carts carted the crops, steam engines were fine to power the farms and businesses while the telegraph was just fine for those times when a three month letter to your customers or creditors in London or New York wasn’t quick enough.

All those businesses went broke. They didn’t go broke fast, it was a slow process until one day owners realised it was all over and then the end came surprisingly quickly.

That’s where many of us our today – cloud computing might be the latest buzzword, social media might be a distraction for coffee addled children of the TV generation and the global market might be just a way to dump cheap goods and services on gullible consumers – but markets and societies are changing, just as they did a hundred years ago.

Sure, your business doesn’t need fast Internet. Business is fine.

Stage coach image courtesy of Velda Christensen at http://www.novapages.com/

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Misunderstanding risk

Have we lost the capacity to judge physical and financial danger?

During the recent snowstorms that affected Europe and North America, the summer floods that struck Australia were almost unnoticed except for those living in the inundated areas.

The authorities wisely advised people, particularly tourists on their summer holidays, to avoid the affected areas.

A friend of mine decided to ignore those warnings and take his family on a drive through those backroads despite multiple flood warnings and evacuations. In disregarding the risks, he’s not alone in Western society.

Living the risk-free life

In the Western world we believe we’ve engineered risk out of our society, that we can make investments without risk, that we can build houses in fire, flood or earthquake prone areas without risk, that we plan a holiday without the risk of snowstorms, volcanoes or accidents disrupting our  trips.

As a society we believe the government will bail us because we’re good people and life, and fate, is always kind to good people.

When things do wrong, our mobile phones will work, our emergency services will come promptly and the government will quickly shelter and support us until the insurance company comes good on the damage.

Though it’s not just natural calamities where we believe this. It’s evident with people who quit their cubicles to find new enlightenment and riches as entrepreneurs.

Most of them misunderstand the risk-reward ratio that for every wildly successful new business founder, there are dozens who blow their money chasing the dream and hundreds of us that would have been better off working for a salary.

Finance markets and risk

The subprime crisis is another good example; millions were lulled into buying property on the promise that real estate values never fell and that their no cash down, defray your payments for years deal was bullet proof. These folk did not understand, or were equipped to understand, that real estate prices could fall.

During the subprime boom, the lenders thought they’d engineered out risk – Collateral Debt Obligations, default swaps and securitisation meant risk was a thing of the past – and they were proved wrong.

Indeed, the most frightening thing is our banks today believe they are still bullet proof and their profits and executive bonuses are risk free as governments will bail them out at the slightest hint of trouble. When the history of The Great Recession is written, and we are still in the early chapters, the guaranteeing of our “too big to fail” banks may prove to be the biggest mistake of our generation.

Because we believe there are no costs and little genuine threats to our lives, income or savings we don’t understand risks and therefore miscalculate them. If we think someone will be there to catch us, we’ll head up that flooded road, build that house in an earthquake zone or invest in that Ponzi scheme.

We have to understand there are risks and there are limits our governments and societies have in responding when things go wrong. If it’s clear we don’t understand those risks, then it’s probably best not to take them in the first place.

Endnote: My friend and his family made it back from the floods, although he ended up taking the family on four hour detour through some areas that sensible people would have avoided. Hopefully he’s learned a lesson about evaluating risks and won’t be taking his family into disaster areas again.

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