What lessons from the past can guide us in steering the future of Network Services in the
Federal Government? |
In the first 35 years IBM dominated information management. When IBM mainframes became connected with terminals all logic and communication control remained under the control of IBM. All that the CIOs needed was a reliable dial tone and inexpensive bandwidth. As result, IBM earned over 50% of total industry profits.
The mainframe-centered communication model became obsolete when most of the control over transactions shifted to the Microsoft desktop. Microsoft now earns over 50% of the total profits in the industry.
What do the IBM and Microsoft models have in common? What insights can we gain to prepare us for leadership in next 20 years?
It is a fact that profits will always migrate to what I call the "universal system integrator". I define the "universal system integrator" as an organization that materially reduces the costs of using information technologies.
IBM managed to be the "universal system integrator" for 35 years. Their approach was: "do it my way". Software, peripherals and consultants had to adapt to that. It is what I label as "one-to-one" integration. The telecomm carriers were squeezed out of integration and started sliding to their current status as commodity suppliers.
Microsoft has been a "universal system integrator" for 15 years. They earned this label when the variety of software grew beyond the capacity of the IBM model to handle it. The Microsoft solution was to perfect the "many-to-one" approach to integration. The Microsoft approach - "do it my way" - is based on its hold on the desktop operating system. If you wished to offer a service or an application, you better made sure that it fit Windows rules. The carriers as well as the mainframe makers were now squeezed out of integration value-added profits and could charge only commodity prices.
We are now arriving in an era that I characterize as the "many-to-many" interaction environment. There are millions of possible sources of information. There are hundreds of millions of possible destinations (when you include mobile computing and embedded devices). There is no way how any one vendor, any one operating system or any single solution can dominate value-added integration profits from such transactions.
If you accept my view that the greatest value from information technologies is extracted through integration, then you will conclude that the most economic solution for managing billions of interconnections per hour can be only satisfied by networks that also function as transaction integrators and not just as transmission pipes.
The Federal government should now proceed with the upgrading its networks to include integration services. The current network offerings (inexpensive bandwidth plus reliable transmissions) should be augmented by high-value added integration services. Here are some of the immediate priority tasks for the new Federal Intelligent Telecommunication Services (ITS):
To sum up: