Everyone keeps talking about what happens when the paywalls start going up for the new sites – and we finally have some data. After three months, Newsday has a total of 35 paying subscribers. 35.
The opening up of new markets and the organizational development from the craft shop and factory to such concerns as US Steel illustrate the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one … [The process] must be seen in its role in the perennial gale of creative destruction; it cannot be understood on the hypothesis that there is a perennial lull.
—Joseph Schumpeter, The Process of Creative Destruction, 1942
The process of creative destruction is an important one. A classic example is the death of the Polaroid Instamatic film camera once digital cameras became popular. The increasing marketplace irrelevance of IBM when Microsoft released Windows, and the turning of the tide against Microsoft towards Google. The lesson to be learned, on every level – expand your talents and skills, as one day you have to stop doing things the way you currently do them. If you don’t, you will wake up one morning in the near future, and realize that you are obsolete.
Moreso than other industries, this is true in IT. Things are still moving fast enough that the market is very different every few months. If you fall asleep at the wheel, and do the thing you’ve been doing for 5 years, you’ll wake up to find someone else is doing it faster, cheaper and much much better. The best large scale example of this that comes to mind is email. For years, companies, universities and governments have been buying and maintaining their own email systems. Nobody really thought about the economies of scale – even those who were in the market providing webmail (Hotmail comes to mind). They never figured out the two most important features of email – users need more space and interfaces suck. Before Google arrived on the scene the average webmail provider handed out between 5 and 50 MB of disk space per mailbox. Universities offered between 5 and 500 MB, usually tending towards the lower numbers. Usability was a nightmare – left to the desktop client for most things, and the painful webmail interfaces otherwise.
Google changed all of that. When they launched GMail, they announced that everyone would have a gig of storage – and the world thought it was an April Fool’s joke due to unfortunate timing. They had keyboard shortcuts that made sense for email reading, and most importantly, the system felt like it was used by someone who really understood email. Today, 5 years later, GMail gives out 7.5GB of space without blinking an eye. It’s integrated into their jabber server (GTalk) and their web-based Office Suite (Google Docs). They have single sign-on between all their related services. What makes it even crazier is what they charge for it. If you are only getting 50 or 500 accounts, it’s around $60/user/year (including 10 years of legal-compliant archives). When you scale out to a University system, or the City of Los Angeles, the cost drops rapidly. The numbers I’ve heard are around $14/user/year.
Any mail server administrator that runs Exchange, GroupWise, or Lotus Notes needs to be paying attention. It’s getting to the point where if you support less than 4000 users, you are no longer cost effective. It will be cheaper to replace you, the servers you run, and your expensive benefits (401K, health insurance, etc) with the faceless and unsleeping Google Apps administration. Another member of the organization will spend a few weeks scripting the Active Directory environment to auto-provision email accounts from Google when new people show up (and, hopefully, disable accounts as people leave). The lowly mail server administrator’s career is going to be over in a few years.
Now is the time to learn other skills. Most good administrators aren’t good because they know one product very well. They are usually good because they know a whole range of products and skills very well. They look at the Google Apps as a welcome thing. Google is offering to take a tedious, boring and repetitive task off their hands, and free them up to work on the next fun project. Control freaks and lesser administrators fear Google, because it’s going to replace their only skill set. Schumpeter’s perennial gale of creative destruction is blowing.
Recently the FBI rounded up the heads of the largest music copyright infringement ring in the world and taken them into custody. They are known to have distributed over 25,000 albums, most of them before their release to the public. Each member is being charged with a single count of ‘conspiracy to commit copyright infringement’ that carries a maximum penalty of $250,000 USD fine and up to 5 years in jail. That’s $10 per album – the price you’d pay on the iTunes Music Store – or about $1/song, assuming a typical album has 10 songs. Now for the fun part. If they had been popped by RIAA and MediaSentry, and had been found guilty on the sliding scale that is civil copyright law, they would have been paying $22,500 USD per song. That’s $5.6 billion USD in damages.
The lesson learned here? It’s better to run a criminal conspiracy to with intent to commit copyright fraud than it is to use Kazaa or Limewire. If you get caught, the punishment is orders of magnitude less. Please, Recording Industry Association of America, die in a fire.
With the increased media attention to illegal file sharing and the court cases that the Recording Industry has been filing against people who download music recordings illegally, it has been noticed that Obama has appointed several prominent RIAA lawyers to positions within the Justice Department. My question – why is anyone surprised? Big politics requires big money – those television ads that ran for 14+ months of the last campaign didn’t pay for themselves, you know. If you are a big campaign donor, you get correspondingly large political pull. And there’s a lot of money coming in to the Democrats from the media industry.
Even if Obama didn’t accept any special interest money, the rest of his party has, and those special interests shape the party, not the people. Those special interests decide that the party is going to be for or against gun control, corporate taxes, energy policy and national security, for starters. The will of the ‘people’ comes out in things like gay marriage and abortion – things that are emotionally sensitive, and will distract the people from what’s going on. Let’s say this again to make sure everyone is clear: the people have little say over the platform the party runs on. The party establishes what it’s platform will be, and then the people are expected to vote along party lines. Too bad if you’re a democrat who thinks gun control is a bad idea, or if you’re a republican who is in support of gay marriage.
Time to get back off my soapbox.
Is anyone else surprised that the day after the American Recovery and Reinvestment Act is passed, GM shows up in the news, hat in hand, asking for $30 billion USD? Is that timing not lost on anyone? Further, they “could run out of money by March without new funds” – I have a news flash – March is two weeks away. Oh noes! Panic! And to further scare the US populace into action, they announce that they don’t have enough cash to keep Saturn or Saab afloat.
My thought is that they are betting that after the lawmakers have given away $800 billion, they aren’t going to flinch over another $30 or $40 billion. And three months from now, another undisclosed chunk of change, because “the downturn is more pronounced than expected”. Sure – give them the money – but fire all of the management, and tell the United Auto Workers that “sorry, GM’s too big to fail – and that means that you need to get lost as well.”
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