(Or, How Information Technology Became a Utility)

Information Technology, as a profession and as a field of study, has reached maturation. To understand how and why requires three concepts: the growth pattern of a resource, the four stages of technology, and the difference between complex and complicated problems.

The Growth Pattern of a Resource

A resource is a technological means to an end, serving as the foundation for other technologies. The growth pattern of a resource follows four geographic stages: central, distributed, standard distribution, and supplanted. When a resource first appears in a location, people go to that location to use the resource or get more of that resource. The first printed books, the first cars, and the first internet websites all required going to a place, worldly or virtual, to obtain the resource you wanted.

As demand for a resource grows, it reaches the distributed stage: multiple printing presses, multiple car factories, multiple internet sites. People built printing presses to make a wide array of different books, with different sizes and typesets. Car factories made different kinds of cars with different specifications. Internet sites worked using different rules and required different software. They all blossomed and grew.

To excel at a mass scale, a resource eventually must achieve standard distribution. This simply means creating standards to achieve economies of scale. Printing presses began to use the same parts, for easier repair and replacement. Car production saw standardized parts between different models. Established standards for internet sites allowed consistent access and led to an explosion of use nearing ubiquity in the developed world.

A resource enters the fourth stage and gets supplanted when another resource fills a demand in a preferred way. This doesn’t necessarily mean the end of use for the original resource, but the motivations for using a supplanted resource change. Cars supplanted horses and other methods of transportation, yet equine science continues to grow in knowledge and effectiveness. Some resources do disappear, like to-the-doorstep milk delivery and movie rental stores. Other resources change use or priority. Businesses wrote letters, then typed letters, then emailed letters, and all three of these choices still proceed today.

In IT, computing resources began at the mainframe level. The best use of scarce computing power came from people timesharing computers the size of multiple rooms. Eventually, economies of scale in hardware led to a transition to client-server computing, and everyone got their own “microcomputer” (which was anything but). A few decades later, we find ourselves in the thin-client age, where everyone uses the web to access information on servers. Note that this is not a return to the mainframe days. We’re not limited by our central resources, nor our distributed resources. Instead, we’re choosing to distribute central resources via established standards to stay organized and coordinated with other people who use the same resources.

People in IT must recognize this crucial difference. The mainframe days were about sharing a resource. Thin clients are about coordinating resources. Understanding this difference allows us to capitalize on the opportunities that thin clients bring. If you want to determine the future of an IT department (and likely the entity in which they work), find out to what degree the department sees itself as a provider, and to what degree the department sees itself as a coordinator. Only the latter ultimately succeeds.

The Four Stages of Technology

Many have written about technology lifecycles, where technology transits through unique, standard, ubiquitous, and obsolete stages. “Unique” denotes the first practical arrival of a technology, the leading product or service that can potentially change the way we do things. The wireless phone began life as large, clunky, having poor reception, uncomfortable to hold, and (most importantly) free of the wired tether to the phone jack on the wall.

The “standard” stage happens when enough people buy into a technology that it prompts regulation, whether from within or from without. As owning a motorcar became more popular in the first part of the twentieth century, establishing road rules increased in importance to maintain public safety. Not many people had a car, but those who did (and those who didn’t) could depend on drivers generally following the same rules in a given geographical area.

When a technology reaches ubiquity, we have the privilege of taking it for granted. Running water, indoor plumbing, and electricity offer creature comforts that many in the developed world find difficult to imagine living without. The internet reached ubiquity relatively recently.

Finally, a techology falls into obsolescence. Perhaps it gets replaced by another technology, or simply returns to niche status. Obsolete does not necessarily mean useless; some obsolete technologies remain superior for what they do. Rather, obsolescence refers to the narrowing scope of usefulness for a technology. No-stick pans made modern cooking much less of a hassle for the average person, but professional chefs will still use regular pans depending on what food they prepare. Few people use iron cauldrons these days.

IT follows the same four stages, but with different labels: cutting edge, advanced/beta, standard, legacy. Cutting edge hardware and software is fresh-to-market, and does miraculous things while causing major headaches. These are not custom-built IT products and services, but rather niche market offerings. When 3Dfx introduced the first consumer 3D rendering video card for computers, people couldn’t believe their eyes when they saw the difference in quality. But only a very select market existed for such a device, a market limited by interest, financial constraints, and by the extreme technical proficiency necessary to get the card to work. Advanced products (often called beta products by justified skeptics) allow mass-market use but still run into regular glitches. The latest video card can render ultra-high framerates for games that haven’t been made yet, and will grow in performance (and stability) as the software for the video card improves with regular updates. IT doesn’t consider a product or service “standard” until it reaches ubiquitous use. People use hundreds of different models of video chips in their computers, but they all adhere to standards in how they process video content, and transmit video via the same two or three plugs. Finally, legacy IT products still find regular use, but only in unique cases.

Notice three things. First, the four stages of technology and of IT follow a pattern where they start out as specialized use, then transition to general use, then transition back to specialized use. Second, the four stages have no specific time frame. Cellphone standards came together much more quickly than wired phone standards from years earlier. Third, the four stages of technology correlate with the growth pattern of a resource. That’s not a coincidence.

Complex versus Complicated Problems

A complex problem has many facets in only one dimension. Figuring out who should sit next to who for a 400-person wedding reception brings a lot of complexity. Maybe Aunt Erma can’t stand Jacob’s cousin’s roommate, and isn’t fond of Zoe either, but would be elated to spend the evening next to Bob. Even a few situations like this can boggle the mind for planning the reception, but at its core, the problem is simply matching up individual requirements as well as possible. Computers excel at these kinds of problems.

A complicated problem, on the other hand, may only have a few facets, but multiple dimensions. Figuring out a dinner menu for the wedding reception gets very complicated. Perhaps Bob is allergic to shellfish, but Esperanza loves them, and Esperanza helped pay for the decorations. Emma loves meat, George is a strict vegan and can’t even stand the smell of meat, and you know at least four guests on a no-carb diet.

Complex problems prompt high tech solutions. For figuring out seating arrangements, computer software could figure out optimal possibilities more quickly than we could ever do ourselves. This is also why most of us do our taxes online, or give them to an accountant to work through (who then does our taxes online, or outsources the work to someone who does them online). Complicated problems, however, ask for low tech solutions. Have a nice buffet for the reception dinner, and just about everyone can find something they like to eat. To be sure, low tech solutions doesn’t mean “easy” solutions. It simply means that technology won’t contribute much such solutions.

How to Spot the “Next Big Thing”

We know that a resource is a technology that other technologies leverage. We know the growth pattern of a resource, and the four stages of technology. We know the difference between complex and complicated problems. Now, consider the context. Mass market technology is about geography, which means communication and transportation. In other words, we want to get a product, service, or information from one place to another. Technological progress in communication and transportation requires a change to the multilinearity and/or time of transport in either communication or transportation. To find the Next Big Thing, look for technologies that do a better job handling geographical needs of a resource.

We weren’t around for the invention of the telephone, but we were around for the invention of the cellphone. We didn’t get to see the invention of the map, but we saw the invention of the GPS. The library card catalog came into use before our time, but web-based search engines arrived only a little over two decades ago. Photography goes back more than century, but digital photography hit mainstream only relatively recently. Each of these technological developments shrank the distance between people, and/or shrank the size of a process.

Not all progress comes from shrinking distance and time. The success of several online video games comes from increasing virtual distances between players, creating aspirations and corresponding profits through player traversal of increased distances.

To find the Next Big Thing, find a resource in the third stage of growth i.e. achieving standard distribution. Look for a technology in its first stage that reduces the complexity (not the complication) of the third-stage resource in a geographical manner, and could potentially shift the resource from the third stage to the fourth stage. That technology is the Next Big Thing.

Let’s look at examples.

When the compact disc arrived, cassette tapes were ubiquitous. CDs initially cost a lot compared to cassettes, the players were obnoxiously expensive, and CD selection began minimally at best. However, CDs allowed a person to go any song on the CD instantly and accurately. No cassette tape player could do that. Over several years, the cassette tape virtually disappeared, and everyone used CDs. It wasn’t long until DVDs did the same thing to video tapes, for the same reasons. In both cases, a ubiquitous resource (anyone could purchase a cassette tape or videotape) saw a new technology do a better job navigating the geography of people’s audio and video collections. Note that while vinyl albums are no longer mass market items, demand from audiophiles keeps the technology alive, which serves as a good example of an obsolete technology remaining superior for some uses.

Digital downloads repeated the process. Why change out CDs or DVDs when you can download or stream anything you want? Even before digital downloads reached the quality of CDs and DVDs, digital downloads resolved enough geographical complexity that people surged forward to use them. Which is to say, why maintain a physical media library when digital media is so much easier?

This explains the slow adoption of Blu-ray. Yes, a standard for high-definition recordings took longer than it should have to emerge. But even if it hadn’t, Blu-ray offers no geographical advantage over DVDs, and for most people, the quality difference isn’t enough to supplant DVDs. More people are interested in their access to the audio, video, and written words they want, instead of stockpiling physical objects, for the same reasons that cell phones supplanted superior quality land lines.

Knowing the requirements for Next Big Things can then help you find where opportunities will appear, or disappear. Who makes the flash memory for USB flash drives (and who manufactures recordable CDs)? Who makes the digital processors for digital cameras (and who makes camera film)? From where do GPS companies get their maps (and who publishes them)?

IT as a Utility

A resource becomes a utility when it reaches ubiquity, serving as the foundation for several resources and technologies. Therefore, if a given resource is a utility, its absence would destroy other resources. Food and water do not affect digital networks, but electricity sure does. Likewise, digital networks now affect a large part of our economy. A lot of commerce simply couldn’t exist without digital networks in the developed world. In the same way that we gave up wells and outhouses for running water and sewage transport, we gave up some products in trade for some digital services that only work if the underlying digital networks that deliver these resources also work.

This is a tough concept to handle for older IT people, because a lot of us grew up and learned our craft during a time when IT was not common, when we were important couriers of a scarce resource. The wild west of IT got settled, and most technology matured to a point where people don’t need us anymore, or they don’t understand why they need us because we did such a good job automating and streamlining technology, that IT services are as magic as a faucet, a lightswitch, or a toilet. Few people want to understand how those work, but we sure get cranky when they don’t work. After spending years in an industry where people were thrilled when printed pages came out of a huge machine called a “printer” on their desktop and they told their neighbors about it, now people get mad when the magic technology doesn’t work the way it’s “supposed to”. There never used to be such reliance on “supposed to” in IT. But as a utility, IT joined the ranks of electricity and indoor plumbing as a modern expectation that was either met or unmet.

So What’s the Next Big Thing, Really?

The Next Big Thing, in a grand sense, is a unique technology that resolves geographical complexity and not only has the potential to become a resource, but has the unusual potential to turn into a utility. Next Big Things as technologies happen on a regular basis; Next Big Things as resources, less often. Utilities might happen two or three times in a lifetime. Next Big Things as technologies make for great investment opportunities. Next Big Things as resources make for high-demand career opportunities.

To be sure, resources and technologies can continue to develop and innovate. Antilock brakes for cars appeared long after everyone was driving, the world wide web boomed into existence long after many people got a computer, and we continue to find our electric products developing better power efficiency. Here’s the difference: evolutions within an established resource or technology can never compare to the revolution that results from the appearance of a new resource or technology. Plenty of opportunities reside in evolution, but they don’t compare to opportunities from revolution.