The speed of cycles and change in the IT industry

Connections - IT industry

Author: Rob Erskine, NZ Sales Director for Oracle Middleware.

As you may have heard (unless you’re hiding under a rock), today’s big hype and hot topic in the IT industry is the Cloud.

Over the years, I’ve seen many big hypes and hot topics – but what drives these and at what cost? Next January I’ll clock up my thirty-seventh year in the IT industry. While establishing and growing business operations in the industry, I’ve witnessed the pace of change continuing to accelerate. However, is it really change or is it just a cycle – are they actually different from one another?

If you look at the Cloud’s predecessors, we have seen a lot of changes. Thirty-seven years ago, we had a similar construct called ‘Bureau Computing’, which is the same concept of shared computing providing an application that is run by someone else, and paid for on a usage basis. Bureau Computing eventually fell out of favour and was replaced by ‘Application Service Providers’, which served up an application owned by someone else, in someone else’s datacentre on a subscription basis.  Subsequently the Application Service Providers was then replaced by what today we call ‘the Cloud’ – an application owned by someone else etc. You get the picture, right?

If you compare it to staffing, we have seen cycles on outsourcing, insourcing and offshoring. All of which had multiple periods during the last 37 years of also being today’s hot topic for a period of time then becoming yesterday’s stale bread like the Clouds predecessors.

Next January I’ll clock up my 37th year in the IT industry with the pace of change continuing to accelerate.

Or is it… is it change or just cycles and what is really different. Today’s big hype is cloud, 37 years ago we had a similar construct, at the time we called it Bureau Computing, same concept of shared computing providing an application that is run by someone else paid for on a usage basis. Bureau fell out of favour and was replaced sometime later by Application Service Providers (Which was serving up an application owned by someone else in someone else’s datacentre on a subscription basis). Which also fell out of favour to be replaced sometime later by the cloud (Which is an application owned by someone else…). You get the picture?

In between times, we went through cycles on outsourcing, insourcing and offshoring…. All of which had multiple periods during the last 37 years of being today’s hot topic for a period of time then becoming yesterday's stale bread.

So what drives these changes and cycles?

In my view, it is the perpetual conflict between cost, control and innovation. Many entities outsourced to save money and get more efficient operations only to find they had lost control of their IT capability and couldn’t achieve the rate of change they wanted. They then resorted to bringing it back in house, swapping providers or reducing the scope of the outsource.

In this way, the cycles continue but will it be like that forever? We’ll come back to that shortly.

What about the length and timing?

At the start of my career, I saw the first Facsimile machines come into the country, at the time my young and naïve reaction was that these would never take off, as they were useless unless they were ubiquitous. They quickly did become ubiquitous and became the primary form of communication; however, now it’s probably over 10 years since I sent my last fax. So in less than 25 years a new technology emerged, became ubiquitous and then obsolete. Today that cycle is probably less than 10 years, and tomorrow it will be shorter still.

Concepts such as 'Systems of Record' vs 'Systems of Innovation' perhaps provide the mechanism to break some of these cycles and allow some items to be solid and not change - freeing time, money and intellectual capital to be spent on innovation. Changes in technology now enable this to be either in the cloud or on-premise without loss of control. Perhaps this is an opportunity to break the cycles and make the time to catch up?

So what does this mean to us as IT professionals going forward?

My crystal ball is not as clear as it was when I was 20 and predicted that Facsimiles wouldn’t catch on… but maybe it’s more accurate now with experience. To me it means we need to be very clear on what does add value and differentiation, as well as being clear on what is a transactional system of record. Then we need to minimize the cost (in both time and money) of the transactional and maximize the innovation in the items that create a differentiation or new value. How you differentiate between the two will determine if the cycles continue and the level of value that you personally create.   

Rob Erskine is the NZ Sales Director for Oracle Middleware and the views expressed on this blog are his own and do not necessarily reflect the views of Oracle.