% fortune -ae paul murphy

In the information age, IT innovation means everything

Here's a bit from Sun president Jonathan Schwartz's blog:

I remember a dinner I had a while back with the CEO of a global financial services firm. As one of his first acts as CEO, he'd canceled an enormous outsourcing contract, and I'd asked him why - his response has stuck with me. "Banking is a technology business. Pure and simple. I can't win if I don't have my own team."

Independent of his views on outsourcing, I've heard the same point made by many (but not all) financial services executives - banking (like big swaths of telecommunications, media and retailing) has become a technology business, where every ounce of performance and differentiation matters. Even, and especially, in the midst of market turmoil.

I think this is true - but I don't think it's limited to the financial industries. Everywhere you look the opportunities are in things that get away from the bland one size fits all strategy of using the same software, on the same hardware, and with the same interchangeable people, as everyone else.

In the crying until you laugh category, for example, it turned out recently that both sides and the Judges involved in a recent U.S. Supreme Court judgment missed the applicability of an explicitly on-topic Act of Congress: the military justice provisions in the the National Defense Authorization Act (2006) - apparently because the legal research tool used by all three groups turns a blind eye to military and related law.

Less spectacularly, but more generally, the overall Canadian and American economic advantage in manufacturing stems almost entirely from the combination of advanced engineering with a committed, knowledgeable, labor force - both of which can be imagined as peaks on pyramids whose lower layers are based on information and information exchange.

At the political level this is what the English Firsters are about, but at the IT level this is about the impact of computing, the value of the internet as a competitive tool, and the role innovative IT has played, and continues to play, in turning high cost, and high quality, resources into competitive advantages in world markets dominated by subsidized, lower cost, lower quality, producers.

In some sports, like skiing, swimming, and running, the outcomes of enormous efforts in training and preparation depend on edges whose effects are measured in fractional seconds - and in today's hyper competitive volume manufacturing businesses the compromises made when you apply general tools to specific problems guarantee failure precisely because each generalization adds the equivalent of fractional seconds to each step in the process.

You can see this writ large, for example, in the way Boeing's fortunes in the global market for commercial aircraft since about 1980 have consistently moved in a lagged lockstep with its IT strategies: pulling strongly ahead of the competition during its 7x7 development era adoption of the Vax with Unix and NCD displays, falling dramatically backwards during the jihadist Windows period - and, more recently, showing an emerging resurgence with improving computational diversity, an end to some crippling out-sourcing contracts, and the wider adoption of key applications and ideas developed at Lockheed and other defense contractors.

You can't really do a survey of reality in a blog, but look around you: everywhere you see a significant economic (or business) success these days you see innovative IT - and none of that comes from adopting the other guy's ideas, the other guy's software, or the other guy's IT people.

Wintel's market dominance has, I think, had the effect of raising barriers to innovation in "mainstream" computing - with the effect that almost all business application and telecommunication innovation going on now takes place in the L'Unix universe: Solaris, MacOS X/BSD, and Lintel, simply because that's where the barriers are lowest.

All of which leads to a pair of simple, bottom line, prescriptions for larger businesses caught in competitive environments: kill the out-sourcers, and start a Unix skunkworks - because using the same people, the same ideas, the same software, and the same hardware as the other guy is a recipe for stagnation; not innovation, and not success.

Paul Murphy wrote and published The Unix Guide to Defenestration. Murphy is a 25-year veteran of the I.T. consulting industry, specializing in Unix and Unix-related management issues.