Saturday, January 3, 2009

How to Save Your Job

Whether you read this probably depends on your opinion of 2008.  If 2008 was the best year of your life, one that you'd like Groundhog Day until the mortician shoves a 50 mm needle into your descending aorta, then the title alone would be enough for you to click through to pictures of Jennifer Aniston at the beach. (But you should read.  Never repeat a year; you'll be way older than all the other kids at graduation.)

If you're like 99.7 percent of the people who work in the free world, then 2009 is your opportunity to make a break from 30 years of bad business management enforced by really bad government mandates and regulations that resulted in doubling the national debt in six weeks. 

So here's how you make 2009 better than 2008:

Use Tools Built By Geniuses.

For four years I've watched a company flail, choke, stumble, and vomit trying to organize its collective work.  For four years I've told them, "Pick a cheap, quality, online project management system, train the people, and move on."  For four years they've said, "No--we can't afford that.  Instead we'll put five of our best developers into making do with something crappy and create draconian punishments for anyone complains about the never-finished product."   By careful examination, that homegrown, half-assed system has cost over $1.3 million in productivity loss, alone.  Not to mention the $300,000 in development.  

For $149 a month, this company could have signed up for Basecamp.  Instead of a $1.3 million productivity loss, they'd have realized about $200,000 productivity gain.  The $300,000 would have gone into brainstorming and sharing meetings to get the most out of the tool. And the company might not have lost major clients.

If you're not in the business of writing product management and collaboration software, then don't build it yourself, don't assume you're an expert, don't rely on in-house experts.  Go with the pros.  These days, the pros are not $300 an hour HP consultants--they're great systems like 37signals.

Close Your Data Center

Quite honestly, anyone who buys from a company that boasts its own data centers is stupid, irresponsible, and subject to lawsuits from shareholder.  Why?  Because there is no company on earth that can run a better data center less expensively than Google, Amazon, Microsoft, or Salesforce.  I know you think you can, but you're wrong and irresponsible for thinking that way.  You're not doing your job.  You're stealing money from your company by refusing to grow up and learn the realities of your condition.

Cloud computing is the only computing companies can now afford.  General Motors is going into bankruptcy because it maintains massive data centers and buys from vendors who run their own data centers.  Same for Chrysler, all of the banks that failed, all of the financial services firms that failed. 

Here are the numbers:   The most efficient in-house data center total cost for a GB of data, including development, inspection, storing, analyzing, and presenting:  $7.00 a month.  The cost for the exact same activity on Amazon's cloud:  $.85 a month. 

If you can't cut your IT costs by 90 percent or more, you're going out of business before 2012.  Period.

Move to Google Apps for Enterprise Messaging and Collaboration

If you are the CIO of a company with 3,000 employees, you should be fired if you don't switch to Google Apps in 2009.

Google Apps for Business at $50 per user per year is better than Microsoft Office + Exchange Server + Sharepoint.  There is no debate. 

The average cost of running a company on Microsoft's business platforms for messaging, collaboration, and documents is about $2,500 per year per employee. This includes hardware and software licensing.  There is some economy of scale, so organizations of over 10,000 pay slightly less per employee while smaller organization pay slightly more. 

If you're an organization of 3,000 employees, you could save $7.35 million a year by making the switch.  Don't let your ego get you fired.  Spending almost $10 million extra in order to keep a high headcount is irresponsible, verging on criminal. 

Monday, December 22, 2008

Linux Approaches Desktop Tipping Point

Rarely does a single factor cause a paradigm shift.  For one example, look at the election of Ronald Reagan.  Sure, Reagan had a great message, expert delivery, and that presidential look.  But without Carter’s bungling incompetence, excesses by liberals in Congress, a runaway Supreme Court, Soviet expansion, stagflation, the Iranian hostage crisis, and seventeen thousand other annoying problems, Reagan would not have upset an incumbent president in 1980. 

Revenge of the Nerds

Since 1999, my IT friends have been predicting the rise of the Linux desktop.  Since 1999, they’ve been wrong.  Being IT professionals and excellent programmers, they failed to realize that the average home user does not have the patience nor the inclination to learn sudo apt-get nonsense.   They want single-click installation.  (Actually, they want to merely imagine something and have their computer make it so.)  Linux had no product managers to demand ease of use.  The Linux community didn’t understand that they were not their (potential) users.

A Linux Distribution People Can (almost) Use

Ubuntu might soon change that. Last week I installed Ubuntu 8.10 on my wife’s laptop.  (It dual-boots Vista Home Basic for her Zune and a few other incompatible activities related to her job.)  After getting both systems working smoothly, I went the extra step of setting up Ubuntu’s Gnome desktop system to work and look like Mac’s OS X.  I friggin’ love it.

The reason for installing Linux on this machine was economics–and that’s one of the factors that could put Linux on a lot of desktops in the next 2 years.  My wife’s laptop is limited to 1.25 GB RAM.  It has a barebones video card.  I just replace the 60 GB hard drive with a 160 GB one because the 60 GB was 90 percent full even though all of our User files (docs, photos, music, videos, downloads, etc) are stored on an external HD. I used an out of the box install of Vista–not the OEM disk from Toshiba–so that I could install the minimum crap necessary to run the computer.

Running Out of RAM

When I fire up Vista, it immediately consumes 600 MB of the 1.1 GB of RAM available after the video card steals its share.  Open a browser (we use Google Chrome, the best browser ever made) and RAM usage is up to 700 MB.  Browse an image-happy site, and the damn thing starts swapping!

Boot into Ubuntu, though, and the OS uses only about 212 MB of RAM.  Open a browser and 10 other programs, and you’re up to about 500 MB.

Moreover, there’s no anti-virus software inspecting every 0 and1 because Linux is pretty much immune to viruses.  And it’s free.

Six-Factor Tipping Point

But the tipping point toward Linux requires a few other factors that have also come to pass:

  • Google Docs and Google Apps give most users all the word processing, spreadsheet, collaboration, scheduling, messaging, and email functionality they’ll ever need–for free
  • Ubuntu keeps your system up-to-date with just about any application you’ll ever want–for free
  • The economy makes the bells and whistles that drove Windows to the top of the market seeem pretentious and embarrassing
  • Every year, the computer skills of the world’s users increases rather dramatically so that more people can deal with unforgivable terminal commands like ’sudo apt-get epiphany-browser’
  • Companies looking to cut their IT costs will begin moving more and more software out of their in-house data centers and into the clouds (Google Apps instead of Exchange server and Microsoft Office will be a major theme for enterprises in 2009)
  • Companies will figure out that with Linux desktops, they can get more years from cheaper PCs for zero cost of desktop applications and operating systems

If I were Microsoft, I’d be worried.  And I drank the Redmond Kool-Aid many years ago when Steve Balmer gave me a free copy of all of Microsoft’s business-related software in order to help my fledgling book publishing company.  In return, I helpd convert 2 companies into Microsoft shops.  I still love Microsoft, but with an almost or actual depression staring the world in the eyes, I’m not sure I can afford their stuff any longer.

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Thursday, December 18, 2008

Data Centers are Dead . . . and they'll kill your company

Does your company have a data center?  You know, a big room with a raised floor and rackmounted blade servers?  Maybe a main frame? 

If you answered no, then stop reading.

If you answered yes, then is your company's primary business hosting systems for others? 

If you answered yes again, then stop reading.

If you're still reading, then you're either curious or you're working for a company that's screwed.  The larger your company, the more screwed.  And if you work in that data center, you are super-screwed.

Data centers are dead.  The IT tyrants who refuse to listen to warnings about cost, service levels, and agility are dead, too, and they're evil.  They're evil because their maniacal pride and malignant ignorance defraud your company's customers, steal the owners' money, and will shortly force lots of good people out of work and into new, lower paying careers.  (Or "jobs" as we used to call them.)

Corporate run data centers cost about 1,500% more to operate than faster and more reliable outsourced solutions in various clouds.  Yet many egotistical CIOs and CEOs take so much bloated pride in these theft systems that they show them off to visitors.  Like Tony Soprano showing off the spot where he dumped Pussy's dead body. 

A company I know of runs its own Microsoft Exchange servers at a cost of about $30 per employee per month.  Google Apps provides better, faster, more secure, and more reliable email services for $50 per year. 

Another company spends almost $4.00 per gigabyte for in-house databases.  Moving their data to Amazon's cloud would cut this price to $.25 per GB while providing faster data access and more flexibility for developers and architects to invent better systems. 

If your company has its own data center, you're about to be out of business.

Soon--very soon--your customers will do the math.  They'll realize you're charging them $10,000 a month for networking services that are worth $100 on the open market.  Yet your idiotic company isn't even making a profit on this theft.  Your data center costs them $9,000 a month to operate!  Not to mention that your software development is slow, expensive, and unimaginative.  You have have no real innovation.  You work longer and longer for fewer results.  You won't get raise next year because your CIO's pride won't let you.

If, on the other hand, you buy from a company that brags about its own data center, tell them they have six months to move your systems to a real hosting company or you'll fire them.

The data center is dead, and yours is stinking up your lobby.

Tuesday, December 9, 2008

America: the shining city on a hill; the last, best hope for democracy; the bastion of freedom; and the latest citizen of . . . the Twilight Zone

Nationalization Would believe me if I told you that capitalism would end in America, not by government seizure, but by surrender of the capitalists themselves?  Are we really witnessing our largest businesses asking the government to save them from themselves? 

It seems like only yesterday that Ronald Reagan rolled back the advancing tide of socialism.  He began the unraveling of complex and burdensome federal regulations that seemed designed to make free enterprise unmanageable.  With our help and Margaret Thatcher's, Reagan restored a sense of duty and purpose in the world.  He lowered taxes, rebuilt the military, stopped the Soviet Union in its expansionist tracks, and put the swagger back into our national stride. 

Just 20 years after Reagan rode off into the sunset, the stewards of the free enterprise engine have thrown up their hands and cried "uncle."  One by one--some days 2 by 4--the foundations of free market capitalism and the symbols of financial independence and growth surrender to the socialism monster in Washington.  It's like an episode of the Twilight Zone.

The government now runs the banks.  It will soon seize the automobile and steel industries.  Newspapers are just behind.  At that point, every major purchase you make and every word of news you read will be designed, assembled, packaged, filtered, and sold by a bureaucrat in Washington. 

Instead of freedom, we are given license.  Society, mainstream protestant churches, the media, and government tell us to do whatever we want with the allowance we're given.  There is no such thing as consequence or shame.  Humility has become a pathology just when we, as a nation and as individuals, have infinite reasons to be humble.

God gave man the right to run his own life;  we said, "no, thank you." 

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Sunday, December 7, 2008

How to Survive the Recovery

According to many studies and reports like this one from Inc. magazine, companies started during a recession (or Great Depression) have a much better chance of succeeding than businesses launched during a boom.  There are three reasons:

1.  Starting during a boom is like buying stock at the top of the market.  Who bought Google at $400? When the market's at its peak, there's only one way for it to go in the short term, and that's down.

2. Starting up during a recession almost guarantees built-in frugality.  The recession has taught everyone on the team how to survive on a shoe string, how to work a little bit harder, and how to plow profits (whatever they may be) back into the company.  But starting during a boom when VC funding grows on trees teaches another lesson:  how to generate an awesome burn rate. 

3.  This might be the most important of all.  During recessions, companies tend to shed some of their best employees or offer voluntary exit packages that let their most ambitious minds take a chance on the idea the company never let them try.  During booms, companies will overpay to keep talent. 

This is great news if you've been laid off and you're smart, ambitious, and risk happy.  It could be very bad news if you've laid off these sorts of people.  They will be the new competition you never saw coming.

If you're a company that just (or is about to) cut to the bone to survive the recession, you better also plan on investing in R&D, marketing, and a new business model to survive the subsequent recovery.  Here's one way:

1.  Dust off the proposals your employees have given you in the past two years--the ones you thought didn't make sense.  Consider launching them now before the person who proposed it uses his severance package to prove the concept sound. 

2.  If you think there's no money for R&D, you need to cut more and use that money for R&D.  Someone will innovate during the recession when there's less concern about new business stealing resources from the skunk works project.  That someone will get on the front page of the Wall Street Journal above the fold when they capture 80 percent of your domestic market with their revamped, streamlined, updated, and innovative release of whatever it is you both sell.

3.  Act like you're a start-up again.  Forget the fact that you control four floors of prime real estate in the most prestigious business center in the Midwest.  Let 3/4 of that space sit empty, save the energy costs to heat and cool, cram all your smart people into overcrowded offices and cubes, and let them work like today's output pays for tomorrow's electricity.  It does. 

4.  Outsource everything you're not the best at.  If you have your own data center but it's not as good as IBM, Savvis, AT&T, or Rackspace, then get rid of it.  If you have your own printing service but it's not as good as FedEx Kinkos, then get rid of it.  The place to own the supply chain is upstream of your core business, not downstream.  Anheuser-Busch owns hops farms in the US and Europe--but someone else owns the distributorships. 

5.  Get rid of the stupid perks that don't sell your products, but invest in useful perks that make people work smarter.  iPhones might make your people more productive, or they might create a distraction that prevents your best minds from learning and thinking.  Know the difference and act accordingly.

6.  Invest in business process automation.  If your people seem unable to follow a documented process, either automated so they have no choice or eliminate it.  People are smarter than you. 

In 2009 or 2010, you'll read about the new leaders of the coming boom.  The faces in the article will be familiar--they'll be yours or the people you laid off last week.  If you run a business or a business unit, you have the money, the experience, and the networks to stave off their competition.  But if your inefficiencies and lack of innovation helped create the recession--they'll kill you in the recovery if you don't remodel yourself now.

Saturday, December 6, 2008

What's In Your Rewards Program?

Do you earn points, free gifts, cash back, or any sort of premium for doing business with a company?

I want to know only about your favorite Reward or Loyalty program.  It could be grocery store, a shoe store, a coffee shop, or your local garage. 

And I have only 2 simple questions:

1.  What's the name of the business?

2.  What's the number reason for participating in this program?

Simply leave a comment below.  Be sure to read other people's comments, too, because you might just learn about a program you can use that you didn't know about before.

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Monday, December 1, 2008

Design Thinking

Have you ever wondered how companies like Apple and Google come up with great, meaningful ideas over and over again? 

They have elevated innovation to something Tom Kelly of IDEO calls "Design Thinking."  Here's fantastic presentation on how Design Thinking works and the results it can produce.