Dave Gray – Some companies are designed in a kind of podular way

When changes are inevitable, you can let them happen organically or you can be proactive and think about, you know, and anticipate the kinds of things that you’re going to need. And every corporation has to upgrade and refresh their IT every… you know… three to five years anyway in one way or another. And in a lot organizations this IT cost has become so great that it’s like a national deficit, you know, the interest payment on it, the amount of money that’s paid just to keep everything running is so great and the systems in some cases are so complex that there is very little room left in the budget for any kind innovation. And so you have these legacy systems and, you know, Amazon again is kind of anticipating this future world with their Amazon web services and all the infrastructure that they’re providing to let companies put that computing, all that computing and processing data storage, in the cloud, and I think this is an example of a good first step. Right?

You going to… when you rent an apartment building you don’t have to worry about the plumbing, right? You don’t have worry if there is problem you just call the landlord, and I think for, you know, and it’s built into your rent, so your paying, yes, you’re paying the rent, but your costs are more predictable than they are if you own something and a cost of ownership is, you know… If you own a house and you need a new roof, suddenly you have got to spend five thousand dollars or whatever the equivalent is in Euros, you know, seven thousand maybe, three thousand, you got to spend all this money that you weren’t planning for, and corporations have the same problem when it comes to IT. Target was hosting all of it’s appliances on the Amazon’s platform, and they decided, well, we are going to build it ourselves. And I don’t if you know that story, but they said “we going to take care of it ourselves” and then they kept having problems with it going down.

I think there is also this thing of… if you gonna… companies are always kind of refreshing themselves and reinventing themselves anyway, and I think sometimes some companies already are designed in a very kind of podular way, like restaurant chains for example: in a restaurant chain you already have, you know, individual kind of somewhat autonomous unit, you know, you have this, lets say McDonald’s right and you have each McDonald’s store, I only use that ‘cause its a global example that everyone will probably recognize. Each McDonald’s store is in essence like it’s own little company, and companies that are organized in that way have actually, I think, an easier job, because as stuff gets older in one unit you can refresh it and you can do something completely different, whereas if you have everything that’s inter connected at a global level and everything is centrally controlled then it’s very hard to do in a more organic kind of progressive way because, you know, let’s say a company like Microsoft can’t change Microsoft Outlook in that kind of… “One little store at a time” way. They have to change it globally because the cost to support that stuff is huge, so I think there’s the more that…

So some companies like Facebook have kind of figured out some interesting ways to manage this kind of change, so they’ll, if you’re in Facebook and let’s say you reach a point where they can’t… I heard a guy talk about the photo uploading and, you know, a pretty high percentage of photo uploads were just abandoned and so people… they knew that people started it and they wanted to upload their photos, but they didn’t finish. Well, there so much, only so much you can do, it’s kind of like to improve what’s already there, and sometimes you just have to pull it out and radically try something radically different, and try to get to that next level. And what they do at Facebook and a lot of other, I think, technology companies, is they allow other developers to check out a sample size, so they could do an experiment, so if you’re a Facebook development team you can check out ten thousand people.

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