Opportunity or crisis

While political leaders are struggling to agree on anything but the existence of the climate problem the private sector is already profiting from solutions.

Prior to the Credit Crunch only top line mattered. Cost was something that conservative accountants dealt with and something that only mattered for the declining manufacturing industry. Credit was so abundant and cheap that it made a lot more sense to optimize top line than to minimize cost. The Crunch changed all that, drastically and to the better.

While I’m not too happy about the Crunch in general, the renewed and very reasonable attention to cost has brought a lot of positive momentum into the technology sector. The “recent” buzz of cloud computing is just one of the areas which to some extent has been fueled by cost reduction efforts. It just doesn’t make any sense for companies to host and manage individual server farms. Another trend indicator is Microsofts new Operating System, Windows 7. It is the first version of Windows that does not require substantially more resources than its predecessor. Contrary to tradition, Moores law does not seem to have been a design parameter and it actually runs quite well on existing computers.

One of the reasons Microsoft seems to be faring better with 7 than Vista is probably that they where forced to listen to the consumers. Somewhere down the line, some consultant struck gold and came up with the idea that companies should probably produce what their clients where requesting. While user driven innovation sounds like common sense, it wasn’t. For years tech companies have been dictating requirements and assuming usage behavior. Look at many of the programs on your computer. They suck and you only use a minuscule fraction of the functionality they have.

It seems to me that the Crunch has forced us all to figure out and produce what we really need, not what might be nice but the bare bone essentials. It’s not that certain anymore that the general market growth will bail companies out nor is it certain that Moores law will ensure that bloated applications will run. This drastically changes the rules of the game. Resources are no longer unlimited but constitute real boundaries.

Fortunately we’ve been sloppy for decades so there is plenty of room for optimization and economic growth within the boundaries. Our computers are orders of magnitude more powerful than those of the Apollo 11 mission and yet we accept sluggish performance and poor user interfaces. There are still thousands of servers out there that are barely utilized or only utilized during an 8 hour work day but are kept running cool and safe 24/7 at immense costs.

There is a huge economic upside in optimization within the existing resource boundaries and there is tremendous opportunity for growth. The best part is that it consumers will get better products of higher quality that lasts longer while the environmental impact of consumption and production will be minimized.

Companies that understand this change of premise will see unprecedented growth in the new decade and big companies like Microsoft has already started the transition.