Bob Frankston pointed me at this Dan Bricklin piece a few days ago, suggesting it was good background for a discussion that a number of us were having about infrastructure. [Thanks, Bob. And thanks to Dan as well, great piece. Something to discuss over dinner next time we meet.]

Dan draws out a number of themes in the essay, each worth analysis in its own right. And that is not what I intend to do in this post. Another time, maybe even another place. Instead, what I want to concentrate on is the implications of one particular aspect of Dan’s essay, depreciation:

Today, hardware is capable enough that software can be written that will continue to run unmodified as hardware is changed. Computers are no longer new alternatives to other applications — they are the only alternative. Despite this, old thinking and methodologies have remained.

Computers and computer software have been viewed as being valuable for no longer than common short-term durable goods like an automobile or sometimes even tires. In accounting, common depreciation terms for software are 3 to 5 years; 10 at most. Contrast this to residential rental property which is depreciated over 27.5 years and water mains and brick walls which are depreciated over 60 years or more.

I’ve known about this for many years, yet somehow I haven’t appreciated something about depreciation. This may be because I’ve tended to work in environments where the preference is to treat software investment as cash rather than as something to be capitalised.

There were many reasons for this: the avoidance of burdening future generations, a sins-of-the-father variant; the frustrations of reviewing software asset portfolios at year-end, and having to cope with material swings in annual outturns driven by write-offs; the apparent illogic of bothering to capitalise software that was not going to be fit for purpose in less than two years.

I’ll say it again. The apparent illogic of bothering to capitalise software that was not going to be fit for purpose in less than two years.

Probably influenced by Nicholas Carr’s seminal article and book, many people have already classified IT as a utility: standardised, commoditised, scalable, infrastructural, available on tap. I only wish it were true. It will be one day. But we’re not there yet. [Incidentally, he’s written a very interesting mini-piece on Amazon and AWS here, a segue on this Wired article, something I will comment on in a few days.]

Reading Dan’s essay, I realise there is a simple way of my finding out when “IT won’t matter”. A leading indicator, as it were.

IT “won’t matter” when software depreciation periods start pushing out to reflect the periods prevalent in construction industries and utilities.

This has already begun to happen, particularly in infrastructural IT, an area where opensource software is dominant. [And no surprise!]

And it’s going to accelerate with the arrival of software as a service. When you’re providing a quality service at a competitive price, you’re not going to be fiddling around with the gubbins of the service every time it rains. Nobody can afford to.

Sure, we have forces operating in the other direction. People still get paid to design and deliver “planned obsolescence”. Even worse, bloatware is common, even endemic.

This will change. It has to. More and more of what we call software today will become infrastructure, reliable, consistent, with a long shelf-life. Carr will be proved right, as far as this is concerned.

But it doesn’t stop there. Because infrastructural software is necessary but not sufficient for a sustainable business, particularly one which relies on knowledge workers.

Innovation will continue, even thrive, “at the edge”. And at this edge, we will still build software. Mayfly applications that last for a day, a trade, a project. Disposable software. Radioactive software with a short half-life. And these applications will be built on a “cash” basis. Markets will move faster, not slow down. Exciting times, where software is both a utility as well as the engine of creativity.

For all this to happen, we need to see changes. Particularly an end to Bloatware.

Don’t Float Your Bloat. Because that don’t float my boat.

I’ve spent the best part of three decades immersed in large organisations: watching and observing them, working for them, working in them. With very few exceptions, I have found the following to be true of large organisations:

• We stress the importance of human resources, human talent, human capital
• We stress the importance of teamwork and collaboration
• We stress the importance of openness and transparency
• We stress the importance of trust

And then, mysteriously, we somehow manage to create an environment where we jealously guard information; where we seek to create and extend power as a result of this jealous guarding; where we then exploit this power in all kinds of ways, some less abhorrent than others (but all abhorrent, at least to me).

Given all the other values that are stressed, I’ve often wondered why this happens. And in a Sunday night frame of mind, I’d like to postulate one possible reason:

Let me try and explain it by using one of my favourite Peter Drucker quotations:

People make shoes, not money.

People aren’t interested in medical records, they’re interested in getting well, and staying well. People aren’t interested in bills and receipts, they’re interested in knowing that they did what they said they will do, or that they received what they expected to receive. People aren’t interested in financial statements, they’re interested in what they can do as a result of the security that income and savings and insurance and pensions. People aren’t interested in TV or radio schedules, they’re interested in watching things and listening to things. People aren’t interested in share prices and market movements, they’re interested in the things they can do as a result of performing their jobs well. It’s not the information that matters, but what we can do as a result.

People make shoes, not money.

Of course information has value in the sense that it lets you do things as a result of your having information. And not do things as a result of your not having information. But this value is not something we can impute to information per se.

It’s a bit like saying a car key has value by itself. Sure, it lets you drive the car. And if you didn’t have the key then driving the car becomes somewhat more difficult.

But by itself it’s nothing. It’s just a key.

Take a television schedule. Not much use without something to watch television with (even if it’s a Mac rather than a telly). Or take a telephone directory, not much use unless you have a telephone (even if it is a camera or game console pretending to be a phone).

[This is also why IT systems by themselves have no value; value is derived from adoption, from usage. If we don’t understand this, we’ll never answer the age-old question of the “business value of IT”].

I know I’m making a big deal out of this, but there’s a reason. Humour me on this.

Once we impute value to information, we create a reason for people to have secrets. To hide things.

And then it’s a downward spiral. Does it make sense to hide things from your customer? Does it make sense to have asymmetric information within the firm? Once we start acting as if information has value by and of itself, it is only a matter of time before people start using this information to gain personal advantage within the firm.

And once this happens, we can forget about all the nice things we say organisations stand for: openness, transparency, teamwork, collaboration, respect for the individual. Trust. We can forget about all of it, because we allow the very basis of this to be corrupted.

Take a completely different perspective on all this. Privacy. Why does someone worry about who has access to his medical records? Not because the records themselves have value. But because someone can misuse them. Because, for example, someone can refuse to insure, or raise premiums for, some hitherto undeclared medical condition. Or even worse, for some future projected medical condition, projected as a result of discovered habits.

It’s not about the information, it’s about what you do with it.

When we had no language, we may have had information, but I wouldn’t know how we knew that we had information.

Once we had oral language, we had information. Much of it was passed from generation to generation without fear or favour. Then, somewhere along the line, people figured out that hoarding information gave them some form of power. And out of that came caste systems and class systems. And a few wars.

It was all about power. Not value.

When we moved from oral to written language, we still had information. But now we could store some of it, and share some of it. But people figured out, if only there was a way to control who could read and write, then the power would remain.

Along came the printing press. Same story. If only there was a way to control who could print and distribute, the power would remain.

Minor skirmishes have been fought on this topic for the last 150 years or so, covering the post and telegraph, radio, film, television, vinyl, tapes, CDs, the lot. If only we could control the copying process and the distribution process, the power would remain.

Well, the genie’s out of the bottle. The horse has bolted. Choose your cliche. Because that’s all there is, cliche.

As reproduction, transmission and storage costs continue their drive towards zero, it’s going to get even worse. Information is an extreme nonrival good, needing artificial intervention to sustain its value. And every artificial scarcity will be met with an artificial abundance. Piracy. Cracking. Whatever you want to call it.

Ideas are free, and will continue to be free. So will information. Or, as Doc Searls keeps reminding me, in the words of our mutual friend Don Marti, information wants to be $5.99.

Information will continue to have value, but that value will tend towards the cost of collecting, processing, storing and retrieving that information. And while there is a cost, the price may still be zero, as ways are found to defray the cost with attention in one form or another.

There is something magical happening. We’ve had language for a very long time. We’ve had the capacity to read and write for a very long time. The costs of reproduction and transmission and storage have dropped remarkably, and that changes many things.

But there is a bigger change. A change brought about by the digital world. Now we can archive and retrieve information, search and find it. This has never happened before. And it is huge.

So.

Information is changing. And it is becoming more valuable to us all by becoming less valuable to any one of us.

Let us bear that in mind as we move on. We should concentrate on providing good service and good product, concentrate on providing that service honestly and diligently. And the money will flow. Not by hoarding information, but by freeing it up. Collaborating with each other, within the firm, with our customers, with our partners, with our markets. Even with our competitors. [Actually we do that already, but in a closed way. It’s called a cartel.]

[Incidentally, the working title for this post was one possible response to the question “but how do we make money if we don’t hoard information?”…..monetise this! But it sounded rude and so I dropped it.]

…while I play around with themes for the blog. Apologies for disturbing your reading. I thought it was time for a new look, and I’m trying to do this all via WordPress for the first time. So far so good.

Whenever I get the chance, I talk to people about just how they use Facebook as part of their day-to-day business. Today it was my sister Jayapriya’s turn. She runs a literary agency out of India and China and Singapore and a few other places, and was in town for the book far.

She described how she meets publishers, converses with them, forwards manuscripts where relevant and completes contractual negotiations, all on Facebook.

And something about the way she said all this made me realise something for the first time. It’s pretty obvious. It’s very obvious. But I missed it. Completely.

And that is this:

When people converse on Facebook, they connect with each other. Not with intermediaries. No PAs or EAs or ESs or whatever.

Up till now, enterprise mail has always been all about mailing lists and distribution lists and blind copies and carbon copies. As it matured, enterprise mail became all about Office attachments, particularly spreadsheets and presentations and documents. 

And I hated it. So not fit for purpose. [Or, to put it another way: Fit for a purpose I wanted no part of: Fit mainly for office politics and intrigue].

A few weeks ago, I mused about the lack of a Forward button on Facebook, and how refreshing that was. The implications of not having a cc button or bc button  or Office attachments. The implications of having Record Video and Share Link and Add Music/Video.

But I missed this key difference. The disintermediation of the enterprise protective barrier. I need to think about it some more, try and see just how people work differently as a result.

What I see so far is intriguing. I see that Facebook mail is all about between-enterprises rather than within-the-enterprise. Between-enterprise mail is largely about business and rarely about politics. Within-enterprise mail is often about politics. 

I wonder. Comments anyone. Stowe, your input will be appreciated, given your unrequited and yearning love for e-mail.