Let's talk about RFID. But first, let's imagine the internet as it might be. Suppose every ISP required its users to buy only its own brand of modem. And to use only its own proprietary web browser. And to connect only to websites certified by the ISP to work with that modem and browser.
OK, try to follow this: Microsoft has spent the past two years slamming its Open XML file format through the process that makes it an international standard. Along the way, there's been arm-twisting, committee-packing, bribery and other chicanery. But by mid-May, Microsoft was one step away from success.
How many heads will roll at EDS? That's the obvious question, now that Hewlett-Packard is buying the company. A back-of-the-envelope calculation says that at least half the employees of HP+EDS are in services, but they generate only one-third of the revenue. Conclusion: Up to 50% of them will get the chop.
It's the obvious question — but the wrong one for IT departments.
You can safely figure that HP CEO Mark Hurd will do his usual slashing at EDS. That'll be tough for the 20,000, 40,000 or 60,000 EDSers who lose their jobs.
But for corporate IT, unless you want to snap up some of that newly liberated EDS talent, that's irrelevant. The big question is how HP+EDS will make your job tougher.
Figuring that out isn't as much fun as bewailing the lost jobs or speculating about how long it will take Hurd to integrate the two companies (remember Compaq?). But whether you'll still be able to get the same products and services — and whether they'll cost you more — are the issues that matter.
Some of the dots are easy to connect. If you're a US-based corporate EDS customer, expect your IT services to be provided from the other side of the globe. EDS was already in the process of shifting as many as two-thirds of its jobs offshore. With the HP buyout, that's going to accelerate.
The one quarter of EDSers who currently work on US government accounts will stay in that country, along with a little project-management glue and salespeople. But that'll be it.
That won't be enough to reduce the headcount by tens of thousands, though. For that, HP+EDS will need to automate its datacentre management business — in a big way.
Datacentre automation can be a wonderful thing, especially if it's tuned to meet your business needs — getting rid of dreary, routine IT scut work and freeing up staffers to be more responsive to business users.
But when HP+EDS automates your datacentre, the priority will be to cut HP+EDS's costs, not improve your company's performance.
So if EDS runs your datacentre, and HP+EDS heavily automates it, will you still get the responsiveness you need? Maybe. It's certainly an issue worth revisiting at contract renewal time.
Will EDS suddenly become a sales arm of HP? Probably not. EDS works in big, multivendor datacentres where HP can't offer every product that's needed. Vendor-agnostic services will remain a virtue by necessity, even if that means EDS is moving hardware from HP's biggest competitor.
What about EDS's custom application development business? Consider this: It can't be heavily automated. It has a long history of failed projects. It's oriented to building huge, monolithic systems in an era when packaged applications and agile development are the way everything is going. That's not a business line you can count on HP to expand.
Here's one more thing for EDS customers to think about: EDS has spent recent years culling its "underperforming" customers — the less-profitable, more-demanding ones. That's a reasonable business practice. But with new pressure to cut costs and boost revenues, HP+EDS is pretty certain to raise the bar for what qualifies as a good customer.
So drive the hardest bargains you can. Make sure you get the service quality and responsiveness you need. But remember: In the midst of big layoffs, forced automation and increased offshoring, EDS employees aren't the only ones facing the chop.
The next one to get it could be you.
At Purdue University recently, the IT staff built a supercomputer. A world-class supercomputer. Out of PCs. Using just local IT talent. (OK, a team from Indiana University also helped). And it was done in less than a day.
What if you threw a technology party and nobody came? Wal-Mart is in that position with RFID. In 2003, the retail giant said it wanted its 100 largest suppliers to put an RFID tag on every pallet of merchandise delivered after January 2005 — and the rest of its suppliers to join the party soon after. But it hasn't worked out that way.
Five years in, Wal-Mart says many of its top suppliers are tagging their pallets. Some, like Procter & Gamble, met the 2005 deadline. But about 70 of the top 100 didn't. Today, some smaller suppliers are on board as well, including Daisy, a family-owned sour cream maker that started RFID tagging in 2006.
But most of Wal-Mart's 60,000 suppliers aren't using RFID. They complain about costs and technology immaturity and costs and lack of examples and — oh yeah — costs. But, bottom line, they're not doing it.
By any reasonable measure, that marks Wal-Mart's RFID mandate as a failure. After half a decade, the party seems to be over.
You're probably not Wal-Mart. But on a smaller scale, you have the same problem. You have to find ways to get suppliers on board when you're trying to implement a new technology that extends beyond your business.
Maybe it's RFID, or old-style EDI, or a supply chain system. Whatever it is, there's one thing you've got to remember: It's all about money.
It's not about technology. It's not about business processes. It's not about the size of the supplier or customer. It's not about coercion or cooperation.
In the end, it's about the cost of doing business. Cost is what your new system is intended to reduce for your company. And cost is what will make partners balk at signing on.
That's important to remember, because we in IT tend to see the world in terms of technology and process and scale and integration. To us, money isn't the hard part. But for suppliers being strong-armed into an IT project, money may be the biggest part of the deal.
And that can be an advantage.
Case in point: Wal-Mart's answer to suppliers that still haven't implemented RFID is a money solution. Wal-Mart subsidiary Sam's Club will soon start charging suppliers $2 or more for each pallet that doesn't have an RFID tag.
It's a clever solution: Wal-Mart isn't calling it a penalty, just a charge for putting the 10-cent RFID tag on the pallet. And that makes the supplier's business decision one about the cost of implementing RFID vs. the cost of not implementing it.
Even Wal-Mart can't force suppliers to join its RFID party. But the company can turn a decision about technology into one that's about dollars.
You can't force partners to buy into your technology plans, either. And your CEO won't dump a supplier just because it doesn't conform to IT's plans.
So assume that some suppliers won't buy in. Be sure you build a way around that problem into your technology plan. And make certain you include from the start what Wal-Mart only added years after its original RFID mandate: a clear dollar cost to suppliers that reject your new technology.
That way, you don't need to count on buy-in. And you won't have to eat the cost of that half-empty party yourself.
Sure, you'll still have to sell that idea to your CEO. But even the most tech-clueless CEO understands money. And that somebody has to pay for the party — one way or another.
Gartner says Windows is "collapsing". Well, sure. Strictly speaking, Windows itself isn't in a state of collapse — Windows XP is still useful to a huge population of customers. But for Vista and the Windows franchise as a whole, things do not look good.
How many people do you have working to protect your data, systems and networks? Go ahead, count them up. We'll wait. Finished? Here's the bad news: Unless you've just counted every person in your organisation — not your IT department, but your entire enterprise — it's not enough.
You need them all. Every secretary and salesman. Every receptionist and researcher. Every executive and engineer. Every manager and maintenance guy. You need them all on board. You need every one of them looking out for the information that's critical to your business.
Do they have to be security experts? Of course not. You have an IT security team for that.
But that's not enough.
Look, we've all inherited our ideas about IT security from a simpler time. The data was in the glass house. We guarded it. Simple, right?
No. It wasn't that simple. It wasn't enough then, either. Information was all over the organisation, in reports and notebooks, filing cabinets and desk drawers. Crooks and spies and hackers wormed their way in and walked away with critical information, even if they never got near the datacentre. Occasionally, we caught them in time. Usually we just learned about it later. Often, we never found out at all.
The IT security team wasn't enough then. It's certainly not enough now.
That's OK. You can get everyone else working for IT security too.
But it's going to require some changes.
First, you've got to understand that IT security pros aren't enough.
Then you've got to understand that the rest of your organisation isn't the enemy.
Your fellow employees may be a security problem, but they're not intent on destroying their jobs. Not most of them, anyhow. They're only a problem because they think IT security means a collection of annoying rules telling them they can't open a picture of Aunt Margie attached to an email message.
That's the wrong end of the telescope. IT security is about protecting critical company assets, the information that's the lifeblood of the enterprise: customer data, financial information — everything that helps make the company successful and competitive.
It's in every employee's interest to protect those assets — every employee except for the few crooks, spies and hackers on the inside.
And except for those internal threats, it's not hard to get people to understand that IT security is in their interest. And that they have a part to play — a major part, one that in aggregate dwarfs what the IT security pros can do.
They know how things are supposed to work. They know what looks a little odd. They know what rules will always be bent, what corners will always be cut. And they represent hundreds or thousands of eyes and ears and brains that can filter out the ordinary business and help spot the real threats.
With a little support from you, a little explanation, a little training, they'll do it. They'll be glad to. Not because it's in their job descriptions, but because it's in their interest.
That's the easy part.
The hard part? It's for your IT security people to adjust to this strange new world in which thousands of employee eyes, ears and brains help them do their jobs.
But they can do that. It's in their interest, too.
The threats are out there — in greater numbers, with more sophistication and variety, and delivering orders of magnitude more attacks against you. To beat them, you need all the help you can get.
You need the help of everyone in your organisation.
And that's something you can count on.
It wasn't supposed to be this way: Last week, IBM gave the AS/400 a new lease on life. At the Common 2008 user group meeting in the US, IBM announced that its venerable minicomputer hardware is being merged with its Unix product line, once called the RS/6000. Result: The system formerly known as the AS/400 just got cheaper, more modern -- and harder to kill.
You can beat internet sabotage. Martha Stewart Living Omnimedia did. Several weeks back, I mentioned a 2006 incident in which Con Edison Communications "accidentally hijacked internet connections to investment houses, a bank, Martha Stewart's publishing empire and the New York Daily News." I implied that Martha Stewart was knocked offline. I was wrong.
Recession. Where have we heard that word lately? Oh, right — just about everywhere. Not two weeks ago, there it was again: Bigwig economist Martin Feldstein told a trade show audience that the US is already in a severe recession that could be the worst since World War II.
"There's no doubt that this year and next year are going to be very difficult years," Feldstein said, according to the Reuters news service.
Feldstein is the president of the National Bureau of Economic Research, which decides when US recessions start and end. So when Feldstein says it's a recession, you can take that to the bank.
So — now we're in it. But IT departments have been through recessions before. What makes this one any different?
There's an economist's answer to that: Feldstein says the past few recessions have all been engineered by the US Federal Reserve to head off inflation by slowing down the economy. The Fed raised short-term interest rates until the economy stalled, then pulled them back down to restimulate the economy and, it hoped, to produce a "soft landing" — or, at worst, a short, shallow recession.
But this time, the recession wasn't intentionally produced by the Fed. It was caused by the collapse of the housing bubble. As housing prices fell, people spent less; Feldstein figures that house prices have already dropped 10% and consumer spending has dropped by US$100 billion (NZ$126 billion), pushing the country into recession. Before it's all over, house prices will drop another 15% to 20%, with consumer spending down a total of US$250 billion to US$300 billion per year.
That's money that won't trickle down into corporate IT budgets.
Worse still, according to Feldstein, the financing tricks that fueled the housing bubble — sub-prime mortgages financed by complex asset-backed securities — have collapsed, causing credit to dry up. Since no one now knows what real estate assets are really worth, no one wants to lend money. And that's poisoning all the US credit markets.
Without credit, business slows down. When that happens, IT budgets shrink. And that will continue until we hit bottom — and this time, no one is engineering a soft landing.
That's the economist's angle. But there's another reason this recession will be different.
This time, users have more power than ever before. They're more tech-savvy than ever before. They no longer depend on IT as much as they did even during the last recession, after the dot-com collapse. They can do IT themselves, or at least they think they can.
That means the risk of battles between IT and users for control of business technology is greater than ever — especially as we try to lock down, standardise and streamline IT to cut costs as budgets shrink.
Struggles for control are always expensive. This time, users have a stronger hand. If we fight, the battle will be longer, nastier and costlier — just when we can least afford it. Remember, this may be the worst recession in 60 years.
In the past, we told ourselves that the fight was worth it.
This time, there's no doubt: It isn't.
So this recession will be different. It has to be. Our businesses simply can't afford a costly fight with users. We must consult, cajole, convince, compromise, whatever it takes to work with them — and get them working with us.
That's the way we'll survive this recession.
And the way users will survive it, too.
What now? That's the hard question. When an IT project is in trouble, it's easy to ask what went wrong and who's to blame. Easy and popular. And fun, if you're not on the hot seat. But what to do to save the project? That's harder — a lot harder. Especially when, as with the US Census Bureau's "paperless census" project, it can't be killed and can't be delayed.
I can see the future. You can too. Just look at the numbers released this month by the US Computing Research Association, which does an annual survey of the number of students studying and graduating in Computer Science.
Sabotage. That's the right word for what Pakistan Telecom did to YouTube on the last Sunday in February. It was intended to be censorship — blocking Pakistanis from seeing a video that their government found offensive. But it resulted in all of YouTube vanishing from the internet for up to two hours.
Well, that was quick. Last month, Toshiba announced it was pulling the plug on its high-definition video disc format, HD DVD. Within days, Toshiba's partners announced that they were now Blu-ray shops, and HD DVD players and movies were reduced to fire-sale prices.
Earlier this month, BlackBerries stopped working again. For about three hours, the CrackBerry addicts couldn't get their mobile email fix. The root cause: an unsuccessful infrastructure upgrade by BlackBerry vendor Research In Motion.
This outage came less than a year after an 11-hour BlackBerry service outage last April. Thye root cause that time: a different infrastructure upgrade.
Naturally, BlackBerry users were unhappy. A few industry blowhards said they were furious and grumbled darkly about a backlash against the BlackBerry.
It won't happen. And not just because of the BlackBerry's supposedly iconic status or because users have some irrational affection for RIM.
The analysis is simple: The BlackBerry works, mostly. It's cheap, functional and — most of the time — reliable.
Three hours down out of 7,000 since last April? That's 99.95% reliability. Want more nines? You'll have to pay more.
Probably a lot more.
That's because most users don't need all those nines. They can survive a few hours without email arriving in their pockets. Before the CrackBerry, they did it all the time.
So only a small fraction of BlackBerry users would ante up for service with much higher reliability. That would likely make the cost per user stratospheric.
Cheap, functional, reliable. You get to pick two — at most.
The definition of "mission-critical" is that we choose reliable over cheap. For anything that's truly mission-critical, we spend the money. That's why we have backup generators and redundant T1 lines — because we know drunk drivers plow into electrical substations, trucks skid into telephone poles, and diggers and boat anchors take out fibre-optic cables.
So by definition, BlackBerries aren't mission-critical. They probably never will be. There just aren't enough users willing to pay for the battle-hardened, fully redundant BlackBerry infrastructure that more nines would require.
Ah — but how much reliability can you afford?
You can't guarantee that every email message will go through. But maybe you can afford to pay for a return receipt for every message one of your users sends. At least then they'd know if the mail was going through or the system was down.
Or what about a fail-over system that lets your users collect their mail some other way on those rare days the BlackBerry dies? Webmail by phone, email converted to text messages, iPhones for everyone — there are lots of possibilities. But they'll all cost extra. How much can you spring for? How much should you spring for?
That's defined by how much reliability your users actually need. And you can't know that without asking them.
And right now, you have the perfect opportunity to do just that. They've just been through a BlackBerry outage. It's still fresh in their minds, but distant enough that any minor sting has faded.
So ask them: Did it cripple their work? Was it an annoyance? Did they even notice? How much of a work-around would they be willing to use to get email another way next time? How much would they be willing to pay?
Don't hint at solutions or imply that you've got a magic bullet. Just ask and listen. There's a good chance they'll tell you just how much functionality and cheapness they're willing to trade off to be sure of getting their email on the go.
And that's how much reliability you can afford.