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Episode 64: The Tech Economy – This Time Around

“May we live in interesting times.” I always found this old proverb to be the mantra for the technology industry. It is always interesting, changing and never boring. 

Since the dot-com meltdown, it seems as if every macro-economic woe has a few analysts making dire predictions for technology growth. I will tell you though that, in my opinion, the dot-com bust was a very unique situation and one that will not likely happen again. All industries can be impacted based on macro-economic growth. It’s a simple reality. The times have changed, however, and much of the technology industry is on a new curve.

Back in the now infamous dot-com era, there was a unique dynamic to technology acquisition. Companies (mostly startups and new “Internet” divisions of larger companies) had these amazing business plans that, if they were correct, would require massive amounts of compute, storage and software. Consumption of IT in advance of actual growth became an imperative as growth was supposedly coming so fast that it would be impossible to build capacity once the growth curve hit. The cash in the system made the acquisition part of the plan easy. In short, consumption was inordinately ahead of any real demand. 

As the growth failed to materialize, we were faced with significant overcapacity and the tech market “spiked.” This, of course, was very ugly. If you want to see this spike in detail you can look at the chart of total storage capacity growth over time. It is amazing how consistent this growth has been (in the area of 60% per year) over time. The funny thing is that the growth actually ramped like never before in the late 90s, 2000 and part of 2001 and then only to crash for the two years following as the excess capacity was absorbed.

As people ‘debate’ if we are in a recession or not, I continue to hear all sorts of predictions about the potential impact to the technology industry. While we are tied to macro-economics, for most technology companies this is not even close to what we had to deal with in 2001/2002.

IT capacity today is acquired when it is needed. Software is acquired when there is a definitive ROI (Return on Investment). In short, IT is a business-critical and key productivity asset for companies to maintain competitiveness. New technologies such as virtualization are helping to reduce costs by increasing efficiency. Technology that can help companies be more competitive, reduce costs, and/or reduce business risks is not something that is discretionary. It is even more of an imperative today.

It is funny that when disasters occur, people tend to take action and, in general, there is enough change along with ‘memories’ so that the likelihood of the same disaster happening again is usually pretty low. While we can always learn from the past, it can only serve as a guide to what the future will bring. In this case, we are not dealing with any overcapacity in IT, and it is more critical than ever for companies to seek improved efficiencies, productivity gains and risk reductions.

Mark…

Episode 63: At Number 1 - Information Compliance

 

Time has sure flown by. I can’t believe that it has been two months since my last post. I guess that is bound to happen sometimes. For me, blogging is like exercise. When I get in the groove it is easy but when I stop for a week, I seem to just get into a new groove. OK – on to the topic at hand.

I want to close (finally) on what I believe is the biggest information-centric IT trend for 2008 and that is Information Compliance.  

It is actually quite amazing that this market has taken so long to develop but I think I understand the reason. IT really evolved in very much a bi-polar way. By that, I mean that we had IT come together from two endpoint positions. On one side we grew IT around big corporate systems running OLTP, ERP and such. Typically, these systems are managed in a way that both contemplate and address Information security and protection. While not always perfect, these systems hold information that everyone understand was important, so the systems we designed with Information Compliance in mind.

Over this same period, we started to work and collaborate and do business in whole new ways. Email, chat, the use of the web and other such capabilities moved from interesting tools to business critical systems. The issue, of course, was that most of these applications never contemplated the fact that they would manage such critical information. 

Take a simple example of sending an email to a broker to buy or sell some stock. That is, by most legal definitions, a binding contract. It is also private and confidential. Communications like this are booming simply because it is so efficient and simple. Take an industry like healthcare. Imagine the efficiencies that we could bring to the system if people could communicate more easily with their doctors.

In fact, companies have realized, often in abrupt matter that Information Compliance represents both a risk and an opportunity. On the risk side, all of those emails, IM’s, and file shares represent a potential risk if confidential information is lost or if the information is not managed properly. On the flip side, as we develop more robust ways to protect and secure information, companies and individuals will be able to leverage more of the latest technologies for business critical and confidential needs. 

Information Compliance, by my definition, is an umbrella term that entails that we need to be able to secure protect information both “at rest” and “in motion.” We also must be able to track and audit information and understand the “history.” We must be able to insure both the authenticity and privacy of information. We must be able to control the “rights” that we want to give to individuals relative to a pice of information. We must have business rules and retention policies that insure that we have retained all of the necessary information. Finally, we must be able to “discover” information that may exist are hundreds of applications, many thousands of people, and many billions of objects pertaining to a particular topics.

As a whole, this is what information compliance is all about. 

For many companies, putting more information compliance capabilities in place will be simply about reducing risk. Over time, this capability will let us do more with our information. We will be able to share it in more secure ways and interact with more efficiency and less bureaucracy.

Mark….