RE: Is IT growth slowing?

Subject: RE: Is IT growth slowing?
From: david -dot- locke -at- amd -dot- com
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Mon, 30 Apr 2001 16:00:44 -0500

Elna Tymes said:

> There has been a recent spate of articles in business magazines about
> the failure of IT to live up to its promise of reducing workload while
> improving worker productivity.

This is an annual event. These articles come out at this time of year every
year. Productivity here is about the costs that show up in the accountant's
books. If you put aside the issue of the inability of accounting to actually
reflect the value of the business, which today lies more in it's
intellectual property and knowledge capital, you find that the costs of
systems has escalated over the last few years. The costs here are the soft
costs that are largely invisible. When you buy an application today, you can
expect to pay six times the cost of that application in terms of
post-purchase operating costs. Back a decade ago those costs were two times
the cost of acquisition. When we eliminate print and charge for support, we
are increasing those cost multiples.

>Following the lead of Microsoft, most software and hardware
>manufacturers have adopted the policy of continual upgrades to existing
>products as a means of assuring revenue growth.

Purchasing software was always an annuity deal. That is not new. You pay for
the privilege of paying again next year.

As far as the downturn goes, the Internet and its related technologies is
following the telecom adoption model. The geeks adopted, the mass market did
not. The downturn was predictable according to the model. When the industry
picks up again, the mass market will be adopting the technology, an
experienced management pool will exist, and the ideas will be screen better
than they have been. The big boom is yet to come. The geeks represent a very
small market. If an application can be found that will drive adoption by the
mass market, there will be nowhere to go but up.

I don't support the idea that you have to transition your technology just
because there is a better replacement technology out there. I remember one
place that did not eliminate its Fortran III code until IBM no longer
supported it. Then, they only went to Fortran IV. Jumping to
object-orientation would have required a complete redesign of the
application. IT is a built on a layered structure of backwards compatible
elements. MS DOS for example sits on a BASIC executive. No wonder .... But,
there is little reason to rewrite existing systems when they work. Old
databases can be queried where they stand today. You might want to write the
new records in the new database, if they are actually used, but a lot of old
records are never used. And, as long as the hardware still reads those
records there is little reason to switch. I know that I skip RoboHelp

RH costs are usually out of whack with the benefit it provides. And, the
stuff is over marketed. They don't know customers from prospects. That
wastes money. The annuity concept is why customer loyalty is important and
why the contribution made by documentation is important.



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