Fortune discusses where tech is headed with Marc Andressen who offers a cogent analysis of what is happening. In a nutshell: “Corporate IT is becoming commoditized, and companies are desperate to continue slashing costs. Automation is the answer.”
Andressen’s thinking (which also supports his own company Opsware):
Linux and Windows are winning–everything else is losing.
You can replace a $300,000 Unix server with ten $3,000 Dell servers for a ten-times savings right off the bat–and they’ll outperform.”
Storage hardware has gotten so cheap–close to $1/gigabyte–that fully redundant storage for a big multinational company can now cost only around $300,000.
Bandwidth costs have plunged. Andreessen says that whereas Netscape paid about $1,600/megabit in late 1999, today the price is down to a mere $50.
The reason we’re seeing such dramatic across-the-board commoditization now is because of what he calls a “maniac” focus on cost-cutting among customers.
It costs a heck of a lot more to operate all this stuff than to acquire it – 6 to 8 times more over time. That’s why IT staff constitutes, on average, something like 40% of the overall corporate IT budget. Getting rid of all those expensive people is a top corporate priority, because it would be the best way to cut costs.
There is also a growing backlog of applications that companies want to implement, even as they are desperate to cut IT costs and staff.
Automation is the answer.
The thinking issimilar to IBM’s on-demand computing and HP’s notion of adaptive infrastructure.
Historically every corporate application had its own hardware and infrastructure resources–dedicated servers, storage, and database. That’s one reason the utilization rate for servers in most companies is only about 20%. Typically, SAP has its own infrastructure (probably multiple ones), and so does Siebel, supply chain, home-grown applications, etc.
That, says Andreessen, is increasingly becoming unnecessary. Now these commoditized components can become merely a set of generic resources to be used for any application at any time. This applies to servers, storage, databases, application servers, firewalls, data routers, and other parts of the corporate computing architecture.
What we need to do is apply thins thinking in the context of SMEs.