For almost 50 years, Moore’s Law has had a significant influence on the IT industry. In a fast-changing world, it has continued to be a reliable industry rule of thumb; it has guided the plans of commentators and strategists, predicting how technology will inexorably become smaller, cheaper, faster, and more commoditized.
However, the world has become a more complex and interconnected place. Today, accessibility and interconnectedness are driving value through increased productivity and innovation. If too much focus is placed on Moore’s Law based on price and performance, there is a significant risk of overemphasizing the potential for commodity cost savings from IT, while missing out on the much bigger opportunities in an interconnected world.
Moore’s Law is still important
Moore’s Law is named after Intel co-founder Gordon Moore. In a 1965 paper, Moore noted that the density of IT circuitry roughly doubled each year, and predicted that this trend would continue. In the 1970s, it was updated to once every two years, but the basic theory has remained unchanged.
The density of circuitry is, of course, a big driver of the size and cost of technology.
Over the years, Moore’s Law has been surprisingly accurate. This is due in part to the semiconductor industry itself using Moore’s Law as a guide for its long-term planning, for setting research and development targets, and for driving market expectations. In a sense, Moore’s Law has become a self-fulfilling prophecy, where the theory is actually driving reality.
Problems with a doctrine based only on price and performance
In a sense, Moore’s Law is a victim of its own success. Extrapolations of faster, cheaper, and smaller computing have sometimes led to a commodity cost-cutting doctrine that ignores other important factors. In a much-quoted 2003 article in Harvard Business Review, “IT doesn’t matter,” Nicolas Carr referenced Moore’s Law in his argument that IT had become a commodity that was inconsequential to strategy.
However, technology is about much more than just the box on which it runs.
Other approaches come from a very different perspective, where ubiquity, not just cost savings, drives value. For example, the creators of social networking tools such as Facebook and Twitter have focused on the extraordinary value created when the use of innovative software becomes widespread in the community.
Today’s mobile technologies provide a significant opportunity to re-evaluate this traditional thinking and break free from the constraints of cost-containment. In recent times, for example, Apple has been very successful in promoting a value-creation model built around the simple mantra “there’s an app for that.” Quick, low-cost solutions have provided a simple business case for personal productivity, and these have resonated widely in the community.
The simple value proposition of mobile technology has also sparked the imagination of traditionally hard-nosed business leaders, who have been lining up to talk about their favorite mobile app and how their mobile device has influenced their personal productivity.
Despite this enthusiasm, the value proposition of mobile and social networking has frequently failed to translate to enterprise IT. Bound by privacy, security, legacy systems, complex conditions of use, restrictive panel contracts, and shrinking budgets, IT managers have sometimes seen mobile as desirable, but at other times just another distraction from core responsibilities for traditional business systems.
In some enterprises, IT managers have become reluctant gatekeepers for a growing array of devices. A gatekeeper role is a no-win position; it places IT as an arbitrator, charged with holding back rather than encouraging the use of technology.
Charting a new path is difficult but necessary
IT cost-containment is clearly necessary, particularly in an increasingly budget-constrained environment. However, the small, incremental savings on personal technology need to be weighed against the potentially significant productivity gains from workplace reform.
The challenge for enterprise IT is to leverage change while still managing in a budget-constrained environment. A number of enterprise CIOs have successfully approached the problem by delivering small, app-based solutions that act as a “thin veneer” over the top of outdated legacy systems.
Such approaches can be used to justify the value of IT on new platforms, while keeping costs contained. A similar logic is driving the move to cloud SaaS solutions. It is all about demonstrating value quickly so that productivity gains can be delivered.