Thursday, July 29, 2010

No room in the middle



I was lucky enough to be invited to give a presentation on cloud computing to IT West customers. Revisiting the topic again I came up with another analogy that I thought I’d share.

Back in the days when power stations dotted the land and there was no real centralized power distribution and generation you needed a swag of qualified people to maintain the systems. They needed to maintain everything from end to end, from the point of generation to the point of application. However, over time, what has happened is that these skilled people have been forced to move to either end of the spectrum.

By this I mean that they have either moved up into supporting the large end power distribution businesses or they have moved down to the consumer end directly supporting customers (i.e. being electricians). Now both of these occupations make good money but can you see what is missing? There are very few people now in the middle.

Would it safe to apply this model to IT? Could it be said that to survive you either need to move more towards the enterprise end of town or the consumer end of town? Thus, is the middle a potential no man’s land? It certainly seems so to me. This is probably because the customers in the customers are very focused on costs rather than value. Unfortunate, but just a fact of life.

There is certainly opportunity in the market in total but perhaps it is no longer uniformly distributed. I think that if you get stuck in the rut of being too small to be big and too big to be small you will lose out. I also believe that the energy required to become larger is very difficult so maybe it is time to look at becoming smaller and more nimble? I suppose it is a case of always evaluating your business if you are in IT but good businesses do this anyway.