Thursday, November 09, 2006

Cheap Technology Officer

James Governer has just posted something on his blog Introducing the Cheap Technology Officer. He picks up on an item from Nicholas Carr, who bids us Welcome Back to Frugal Computing.

One of the reasons why cheap/frugal is back in fashion is that companies are spending staggering amounts on building data centres, which then consume more electrical power than a small town. Gartner reckons that electricity costs could rise to as much as a third of total IT costs [source:, November 2006]

These data centers also take a long time to build. Sun CEO Jonathan Schwartz makes a simple comparison, between (1) a large financial institution taking nearly three years to build two data centers each costing over a quarter billion dollars and (2) YouTube incorporating, building infrastructure and getting bought by Google in less time.

Clearly Schwartz was being provocative in suggesting YouTube as a benchmark since a data centre for a financial institution like that is going to be incredibly complex and expensive. But the ROI is crucially affected by "time-to-market" - this is the same financial logic that drives knowledge-based companies like chip-makers and pharmaceuticals - if you are spending a quarter billion dollars on something, the sooner you can start getting a return the better.

For chip-makers and pharmaceuticals, the most important capital investment may be developing the next generation of chip or superdrug. But for many service companies, the biggest capital investment is going to be these enormously expensive data centres. Google and Microsoft are spending staggering amounts of money on hardware.

In his comment to Jonathan's blog, Jon Collins questions the economics of scale of monolithic data centres. There are probably some significant diseconomies of scale involved if it's done wrong. Centralizing hardware only makes sense if you can switch some of the distributed hardware off - and in many organizations that isn't going to happen. And there's no point in outsourcing half your functionality to some SaaS (software-as-a-service) provider if you still have to run (and cool) almost as many boxes as before.

So what are the characteristics of the Cheap Technology Officer? As well as the characteristics identified by James, I'd like to identify a few more.

Sense of Urgency. There can be little doubt about the link between economics and speed. But there will be some things that have to be done more slowly, so the Cheap Technology Officer must be able to operate tectonically as well - this means the capability to make progress at different speeds in different layers.

Bricolage is a form of improvization practised by some engineers, using whatever resources and repertoire come to hand, in order to perform the immediate task. A person who practises bricolage is called a bricoleur.

and finally (which I'm including because it echoes the "cheap" meme) Avoiding Cheap Adjectives such as “revolutionary,” “Web 2.0,” “huge,” “change the way you’ll use the Internet,” and “disruptive.” (See Guy Kawasaki on How to Get In TechCrunch.)

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