Wednesday, October 17, 2007

The Pendulum Flows

In Lamps, lighting our way..., Mark Masterson mentions the age old topic of centralization vs. decentralization. The pendulum swings.

But wait...

Is the vacillation as real as it appears?

Is it more appropriate to view it as a one way flow, with technology generally moving from the edge to the center?

Here's the idea.

There is a relatively steady amount of centralized IT technology. The amount is usually governed by some high-level metric such as percentage of revenue. This amount varies by company, but tends to act as a top-level volume knob for centrally captured budget dollars spent on 'IT'.

The decentralized introduction of technology at the edge is governed by two primary factors - a threshold dollar amount and the degree to which a centralized resource can provide results to the edge.

Since, by definition, a central IT can only provide a finite amount of capability to the edge, there is always an amount of unfulfilled demand.

Once the cost of a new technology drops below a threshold dollar amount, the edge is now faced with the possibility of acquiring the technology. This is particularly true if the new technology can bring a measurable value to the edge. Profits tend to trump politics.

A sufficiently large level of adoption of a particular technology at the edge will gradually prompt a centralization of that technology. Meanwhile back at the top-level PoR volume knob, older technologies are pushed out to make room for the new.

One might argue that there is still a pendular swing, with the power of technology shifting between the edge and the core. It seems reasonable to wonder if this is merely an artifact of our own interests in particular classes of technology, or the result of natural changes in the rate with which edge technologies migrate to the core. Would we still view it as pendular if we accounted for all technologies subject to the phenomena?

What do you think?


Bob Warfield said...

There is a phenomenon such as you describe common to all evolutionary systems, and free markets are evolutionary. I refer to "punctuated equilibrium", which I've written about before.

When a new idea comes onto the seen, it puntuates the equilibrium. Everyone scrambles to refine the idea, so there are a million minor variations on a few themes. That's the Web 2.0 today.

Eventually, all the juice is squeezed out and just a few survive. Features don't matter anymore. The market is in equilibrium. Now commoditization is key. If it's all the same, I just want it as cheap as possible. Centralization plays to economies of scale.

If you want the new new stuff, you have to look out past the edges of the map:

But technology may be different. Not in a business or idea creation sense, but in terms of how things work. Cell phones decentralize the old paradigm by moving smarts out to many nodes. VOIP feels similar.

Infrastructure, I think, is less prone to the pendulum. Services deployed over such infrastructure remain subject.

Aloof Schipperke said...

Interesting point regarding the distinction between infrastructure and services. The one-way flow is definitely more pronounced with infrastructure.

I have quite convinced myself that the higher-level services aren't manifesting the same behavior. Perhaps a larger population of services compared to infrastructure technologies, combined with the ease with which we can hop from service to service masks (or helps us dodge) the underlying mechanism.

In either case, you raise a good point - good stuff.