{"id":535,"date":"2006-09-20T13:18:31","date_gmt":"2006-09-20T19:18:31","guid":{"rendered":"https:\/\/www.roughtype.com\/wp\/?p=535"},"modified":"2006-09-20T13:18:31","modified_gmt":"2006-09-20T19:18:31","slug":"an_it_sea_chang","status":"publish","type":"post","link":"https:\/\/www.roughtype.com\/?p=535","title":{"rendered":"An IT sea change for smaller companies"},"content":{"rendered":"

David Berlind, fresh from a dinner hosted by storage giant EMC, thinks<\/a> the time has come for small and medium-sized businesses (SMBs) to stop rolling their own information technology: “Call me crazy. But it seems to me that the [IT] industry has finally evolved to a point where selling infrastructure (including storage) to SMBs should be like selling regular gasoline to the driver of a truck that runs on diesel fuel. Whether you’re at an existing SMB or about to start one up, it makes almost no sense to insource any IT. Especially IT infrastructure like servers and storage.” The SMBs that can still justify owning their own IT infrastructure, he writes, “are fewer and farther between and if you ask me, sales in the SMB infrastructure channel are basically surviving on a myth: the myth that SMBs should be insourcing.”<\/p>\n

I would call it more a habit than a myth – the ability for companies to jettison most or all of their in-house IT infrastructure is a recent development – but I think he’s right. Ironically, even as many smaller companies are embracing hardware hosting, software-as-a-service, and other forms of utility computing, many others are currently building up their IT assets, drawn by low component costs. I think those companies are going to end up regretting a lot of the investments they’re making. They’ll soon find that the highest IT costs aren’t component costs but labor costs, maintenance costs, electricity costs, and other secondary expenses – and that owning your own gear ends up reducing your flexibility rather than increasing it.<\/p>\n

Berlind reports that EMC’s CTO, Jeff Nick, agrees. During the dinner, he made “a comment about how most all IT functionality should be delivered as a service. By the end of the conversation, Nick was talking about how EMC’s long term focus (in terms of selling infrastructure) should not be to push storage on SMBs themselves, but rather, to help make the service providers to which those SMBs should be outsourcing their IT more successful at providing those services.” On the server side, that seems to be Sun’s emerging strategy as well: For SMBs at least, don’t supply the end-user; supply the utility.<\/p>\n

As I described last year in my article The End of Corporate Computing<\/a>, back when electric utilites first emerged, it was the smaller companies who led the way in hooking up to the shared grid. The prospect of avoiding big capital expenses and high labor costs, and all the associated headaches of owning a lot of specialized technology, outweighed the risks involved in moving to a new supply model. The same thing’s happening with IT today. Big companies, with lots of capital and lots of legacy systems, may be able to justify building their own internel IT utilities – they can gain considerable economies of scale on their own – but the equation’s very different for SMBs. As Berlind suggests, SMBs today would be well advised to approach their IT requirements – both hardware and software – with the assumption that they should be buying services, not assets. Sure, there’ll be plenty of exceptions, but that should be the going-in assumption. If IT isn’t your business, get out of the IT business.<\/p>\n","protected":false},"excerpt":{"rendered":"

David Berlind, fresh from a dinner hosted by storage giant EMC, thinks the time has come for small and medium-sized businesses (SMBs) to stop rolling their own information technology: “Call me crazy. But it seems to me that the [IT] industry has finally evolved to a point where selling infrastructure (including storage) to SMBs should […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-535","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=535"}],"version-history":[{"count":0,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/535\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}