The rate of technical change, and the speed of change are both accelerating.   The acceleration of technical availability (new technologies) poses an increasingly difficult challenge for businesses - particularly large businesses.  Organizations are not geared to change, rather, they are geared to optimize discrete tasks.  Born in the industrial revolution, where processes were decomposed into specialized tasks, which could then be optimized, almost all large companies embrace the concept of “workforce specialization”.   For large companies, there is some benefit to specialization.  The problem is specialization and the associated organizational departmentalization lead to empire building, and bureaucracy - which both make it impossible for organizations to embrace new technologies, and change.

In most companies, bigger is better.  Having more head count justifies a larger office, a bigger salary, and more status.  The measure is seldom the amount of work, the true impact on profit, or quality - the measure is size, subjectivity, and in many cases the ability to manage internal politics.  So, what can be done?  First, management must change the measure of success.  Departmental success should be measure by having less people, by being able to change, and by the ability to impact the business as opposed to manage politics.  The ability to change - to de-construct, and to implement new technologies should be rewarded.  In order to take advantage of the increasingly rapid rate of technical change, large companies need to get leaner, focus more on core businesses, and manage external providers to deliver services.

“Most of the software and almost all of the hardware that companies use today are essentially the same as the hardware and software their competitors use…..They don’t distinguish one company from the next.  The same goes for employees who staff IT departments.  Most perform routine maintenance chores – exactly the same tasks that their counterparts in other companies carry out.  The replication of tens of thousands of independent data centers, all using similar hardware, running similar software, and employing similar kinds of workers, has imposed severe penalties on the economy.  It has led to the overbuilding of IT assets in almost every sector of the industry, dampening the productivity gains that can spring from computer automation.”  Nicholas Carr The Big Switch.

Mr. Carr’s comment applies extremely well to the current state of the managed services industry.  The “your mess for less” model, which is the model of choice for most outsourcers, involves taking a mess bunch of code, and running it slightly better but in exactly the same manner as the rest of the IT world.  Slight gains may be achieved because some outsourcers have deep discounts with hardware and software vendors.  However, most traditional vendors continue to perform routine tasks, using the same types of hardware and software as their competitors.

We built our model from the ground up around two central themes: Cloud Computing, and Virtualization.  By securely harnessing the computing utility model in it's current state, we provide non-core services in a very secure manner to thousands of enterprise customers.  Our model is disruptive because it differs significantly form the traditional model.  Like the businesses of 1915 who standardized on the nascent electric utility platform, we believe the companies of 2009 that are planning to leverage the nascent computing utility will realize significant advantages now, and in the not too distant future.