Thursday, August 9, 2012

Technology, Billionaires, and "Trust"

In the United States and throughout the world, certain family names have become synonymous with power and wealth.  In North America when we talk about rich people we often discuss people such as the Rockefellers, Waltons, Carnegies, even those new to the scene like Mark Zuckerberg.  Because they live in huge mansions, drive fast cars, and travel the world in private jets we believe them to be rich.  But the truth is that if we looked at how much money each one of these individuals had that was theirs personally, the picture might look astonishing.

The true secret of being wealthy is not in "owning" money but in "controlling" money.  Long ago, the families who are rich today had wise ancestors who set up living trusts.  You see, they knew that individually they would grow old and die as would their children, grandchildren, etc.  They also knew that the tax laws of most 1st world nations make it very difficult to pass wealth on from one generation to another.  So these wise people came to understand the value of control versus ownership.

(The concept is not really that much different than a car today.  If you buy a car, whether it is a purchase or a lease, the odds are highly in favor of you not owning that vehicle forever.  So in essence you are merely paying for the right to control it and not for the privilege of owning it.  You have great latitude over how the car is used but another entity, usually the bank, owns it.)

Rich people who want to maintain their wealth for future generations set up trusts of various formats.  Their descendents can control the funds to a certain extent but are usually not personally wealthy.

So how does this translate into technology?  Many IT and business leaders today believe that they must own all of the software and hardware that is used by their company/corporation.  These leaders feel that they must be able to see, touch, or otherwise be able to physically interact with the investments they make.  But that is a mistake that would be similar to having Mark Zuckerberg convert all of his stock in Facebook into cash so that he can stuff it in his wallet/socks/pockets/pants/car(s)/house(s).  (Face it, that would be a LOT of cash)

The whole and singular purpose of IT is to deliver solutions that aid a business entity in being profitable.  There are almost no examples where IT is a net revenue addition to a business.  So given that IT is always an investment center, we should all examine our thinking.  Is our goal to buy servers, laptops, and provision data centers so that we can run our software and plants while keeping our mobile salespeople well informed?  Or is our goal to find ways to give our fellow employees the tools they need wherever and whenever they want them?

Think about what I've said the next time you evaluate your PC and server refresh policy.  If you're going to implement an ERP system, do you really need to run the applications out of your own data center?  Lest we get too old in our ways of thinking, we should ask ourselves if we really need to "own" the infrastructure that serves our customers.  The answer is probably the same about the freeway that you commute on every day.  You don't own that pavement any more than I do, but it serves you day in and out, getting you to where you need to be.

Jump on Google and look up things like "VDI", "XenDesktop", "Rackspace", "Office 365", and "Amazon EC2".  Better service at 1/5th the cost makes for a long career in IT leadership.

I don't know about you but I would rather control $10 million dollars than own $5 million...

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