10 Laws of Information Technology

1.       Never lose data

2.       Centralize when you can, distribute when you have to

3.       Standardize when you can, customize when you have to

4.       Simple is better than complex

5.       Spend as little as possible to solve problem or achieve a goal

6.       100% utilization of IT assets always yield the lowest cost

7.       Always have a “plan B”

8.       If it CAN break, it WILL break

9.       Volume Changes Everything

10.   Do Not Be Married To Your Technology

How does a Business Owner or IT leader decide whether to centralize IT assets in a head quarters office or distribute them to multiple organizations or geographically dispersed offices?  The second law of information technology is “centralize when you can, distribute when you have to”.  By doing this you will spend less on IT, require fewer people to support it, reduce the breakage points, and be able to adapt to your changing business quicker.  Assuming you would like to achieve these benefits, this law is for you.

But the devil is always in the details and what makes sense for one firm, doesn’t for another.  And for any given firm, they may need to change their strategies from year-to-year depending on what’s going on in their business.   Since there are no hard and fast rules, use these strategies as a guide to help you decide what is best for your business.

Short Quiz

Which Costs Less?

a.       One (1) $10,000 server

b.      Six (6) $10,000 servers

Which Costs Less?

a.       One (1) Microsoft Exchange Server License

b.      Six (6) Microsoft Exchange Server Licenses

Which Costs Less?

a.       Five (5) 2mb Metro Ethernet circuits

b.      Zero (0) 2mb Metro Ethernet circuits

Which requires more IT Labor to support?

a.       One (1) Microsoft Exchange Server SW + Server HW

b.      Six (6) Microsoft Exchange Server SW + Server HW

What Costs Less?

a.       One (1) $1M dollar mainframe + maintenance

b.      Ten (10)  $10,000 Unix Server + maintenance

If you answered “B” for all the answers above, you would be correct, but that doesn’t tell the entire IT story.  When you centralize assets, you save in some areas (like HW/SW/Labor costs), but you go up in other areas like telecom to connect everything.  What if a centralized asset is very expensive like it was in the IBM mainframe days?  You revolt and buy a lot of smaller/cheaper devices to get the job done.  The trick is to look at the big picture and figure out which method will give your business the most bang for the buck given the competitive economic climate for IT.  With the cost of telecommunications links coming down, it is enabling a shifting or centralization of computing.  This is what’s happening in the latest trend of computing (aka cloud computing).  This is why this law sticks—generally IT is trying to buy and manage fewer assets for less cost—it’s not about the blinking lights, it’s always about the money.  This change in IT economics is exactly what is driving the current push into Cloud Computing.  Circuits are getting faster and cheaper, which allows IT managers to make their applications location independent.

What are some of the Technology Factors that one must consider for centralization and de-centralization?  This list is probably infinite, but I’ll outline some of the centralization decisions that I’ve made from 20 years ago to what I’m currently deciding.  It’s interesting to see how some things never change.

1.       IBM Mainframe – rock solid, secure, hard to hack but technology overkill for most firms.  Small, distributed systems called client server cause a de-centralization movement.  This caused other sets of problems and people started to swing back and consolidate their client-server systems.

2.       DB2 to Oracle – same problem with your database information store.  One big pile of data was hard to reach and use by all facets of the industry.  It got decentralized for better access, then IT forces drove it back to be more centralized.  Now most firms will have one database instance to drive their entire company.  You see the 2^nd law playing out time and again in all types of technology

3.       Microsoft Exchange – we had an Exchange server in every office in order to get timely access to email and attachments.  With the improvements in telecom, we consolidated and centralized 6 exchange servers to one.

4.       File Server Duplication – Got to have data locally in offices in order to get good file access performance, right?  That used to be the case until WAN accelerators were invented, then we can move data further away from the desktop client.  Now enter the Cloud and we can actually push our desktops closer to our data and get gigabit access.  2^nd law squeezing more assets to one.  My IT staff has asked me how much should we consolidate?  I said how about one server and one desktop?  So it’s not a mainframe, we’ll have two of them for disaster recovery.

5.       File Server Consolidation to SAN – OK so now I have all my file servers in one location, but I still have data distributed in each file server chassis.  It would be nice to be able to consolidate my data store into one big fat pile of disks—enter SAN and NAS’s.  So you see, everything tends towards centralization.

6.       Physical Servers to Virtual Servers – Data is “SAN”itized now, but I still have 57 physical servers that are accessing the SAN.  Forget that, I’ll just virtualize them so that we consolidate 57 virtual servers to run on 2 physical servers.

7.       Physical Offices to Virtual Cloud – OK, I have my Los Angeles office running on virtual servers to a remote exchange server, on a SAN.  Do I even need to have local file storage anymore?  No.  Consolidate all regional office IT to the central location and you have just consolidated an office.  All they need is a local cloud access device (aka laptop) and their “office” goes where ever they go.

Up to now, I have been assuming that centralization is better, faster, and cheaper and that everyone would jump on it.  But let’s not be so fast on that decision.  Could there be other business or political reasons to maintain a distributed environment?  Yes.  The most extreme example I use is to compare the Federal and State governments.  You know, it would be a lot more efficient, require less money, and yield lower taxes if you just scrapped all these State Governments and just had one big mega Federal government.  Just think about it, you wouldn’t need all those various computer systems to collect taxes—only one would be needed.  And how about those DMV lines—you could have one system to run them all—fewer hardware, less software, and a lot less IT people to maintain all the stuff.

Sometimes there are bigger issues that require duplication of IT effort.  It’s called balance of power or power of the people, buy the people and for the people.  We have state governments to maintain sovereign control over local citizens and it makes sense to duplicate the IT infrastructure.

Board members, stock holders, and company owners have to first make the decision how much power do they want to distribute--then and only then should you talk about consolidating and centralizing your IT assets.  In addition, having de-centralized IT assets also makes it easier to sell-off that piece of the business if that is you plan.  It’s about a tightly integrated business or a loosely-bound business.  Once that is decided apply the 2^nd law within that business entity.

While the 2^nd law of IT says that centralization will provide you a lower IT cost, you must first make a conscious business decision about power, control, and potential sale/acquisition of business units.  Then an only then apply the 2^nd law.