The Two, Diverging, Tribes of IT
According to Forrester Research, the global technology industry is worth just shy of $3 trillion. Some estimates suggest that 20% of the global workforce is involved in the development and manufacturing of high technology. Since Alan Turing set up shop in Hut 8 at Bletchley Park and Bill Hewlett and Dave Packard kicked the widow of Palo Alto’s first mayor out of her apartment and starting using her garage as a laboratory, the business of technology has grown at a pace and in ways which would have been hard to imagine in the dark days of the early 1940’s.
Now though, as we accelerate into the fourth industrial revolution, with technology central to almost every aspect of business, society, and life itself, the technology industry is at a crossroads. Two very different types of IT industry are emerging, which bear increasingly little relationship to one another. A great divergence is gathering momentum which will see the IT “tribe” (the lovely phrase tech impresario Thornton May uses to describe, and flatter, his techie friends) break into two different tribes. In the next few years the two tribes will go in very different directions – and have very different fates - as software eats the world.
The first tribe – the “Originals” – are those that tend the servers, the databases, the compiler code, the Ethernet cables, that make the techno-centric world tick. They are the proverbial nerds, the geeks, the math savants, that loom large in the public imagination whenever the phrase “IT” comes up. Think the “PC guy” in the Apple adverts, think Steve Wozniak, think Bill Gates.
The second (new) tribe – the “Digitalls” – are those that write dating apps, music distribution platforms, accommodation websites, augmented reality filters, e-games, and machine learning algorithms. They are the new masters of the universe, dating the girls that used to date movie stars and rock ‘n’ rollers. Think Daniel Ek, think Brian Chesky, think Evan Spiegel.
The Originals are sinking into the fabric of infrastructure that surrounds us and are becoming part of the utility industry. The Digitalls are moving closer and closer to the head of the table and increasingly shaping the zeitgeist and culture we live in. In the process they are becoming part of the fashion industry.
Quite a difference, non?
There’s been lots of talk in recent years about “bi-modal” IT and aligning “old” and “new” IT. I wonder whether the reason doing this has been so hard (the horror stories out there, with a simple Google search, are legion) is that it’s increasingly impossible.
Originals and Digitalls just don’t mix.
Think about it – would you take the “PC guy” to the Vanity Fair New Establishment ball? Would Mr. Spiegel take Miranda Kerr to Oracle OpenWorld? Would Stephen Colbert have nerds – even of the suited variety – on his show(s), as he has with Biz Stone and Tim Cook and many others? Would the readers of Computerworld thrill to read an in-depth interview with Kim Kardashian about her mega-hit fashion website/app? (Well, actually, thinking about it, they probably would).
In 2004, Nicholas Carr, the former editor of the Harvard Business Review, threw shade at the IT industry with his book, Does IT Matter? His conclusion - that it didn’t and that IT was becoming a commodity, incapable of generating competitive advantage – was unsurprisingly unpopular with techie folks and found little traction with industry event paymasters (turkeys not being particularly keen on Thanksgiving). His argument, which built on thoughts germinating in the nascent Cloud Computing community, went underground following the initial sturm und drang, but continued to reside in the Jungian collective unconscious of proud pocket protector types everywhere.
Carr was onto something, but missed the real story.
The real story was/is that some IT matters a little. And some IT matters a lot. An awful lot. More than ever.
PG&E matters a little – a $31bn market cap on c. $20bn annual revenues. Facebook matters a lot – a $384bn market cap on c. $32bn annual revenues.
If as a stock picker you’d followed Carr’s advice in 2005 and got out of IT – generic IT – altogether, you would have missed Facebook, Twitter, Uber, AirBnB, Spotify, YouTube, Netflix, Twitter, and Snap (to name a few). That would have been quite a miss. Almost as bad as this ... https://www.youtube.com/watch?v=eer30sfqgkk
The Original IT industry provides something we take for granted now, like we take PG&E’s electricity for granted. The only time we pay it any attention is when it isn’t there. Then we grumble, but not that much, because we know it will soon be there again.
This is the paradox of success – the better you get the more invisible you become. And the more anemic your P/E ratio becomes.
The Original IT industry – the Originals – is/are still important; of course they matter. The world wouldn’t function without them. But it is a quasi-utility. Nothing more, nothing less.
There is nothing utilitarian about the Digitalls. There is nothing less about them and the new industry they are building. It is all about more.
The Digitall industry – the Digitalls – is where the action is. 30 years ago the 4.0’s flocked to management consulting; 20 years ago to banking; 10 years ago to private equity. Now, they’re all on the 101 or in zip codes 02138 through 02238. To paraphrase Willie Sutton, they’re writing code because that’s where the money is.
And nobody is taking the Digitalls for granted at all. The Digitalls are building the future; of work, of business, of growth, of society, of being a human being. The Digitalls are doing stuff that has never been more important; you know the riff – IT used to support the business ... now, IT is the business. The Digitall tribe is taking over everywhere and everything ...
The Originals find this all somewhat confusing. And are a tad conflicted. On the one hand they’re glad that geek is suddenly chic. But on the other, they’re disappointed that the Cobol seeds they planted turned into Twitter and Angry Birds and sexting apps. They’re glad to have lent their shoulders to giants, but they would have preferred to have been invited for a ride along on the G650ER.
The Digitalls, conversely, struggle to remember to say please and thank you to those who cut the path on the way to Eldorado. “Grace Hopper? Yeah, I liked her first couple of records”. “The Traitorous Eight? I love that movie!!!”
The Digitalls take Original IT – and the Originals – for granted. To them, Originals are hardly in tech at all. As Alan Kay put it, “technology is anything that wasn’t around when you were born”.
“Throw up another Amazon M3”. “I need another Apache Spark ... by 11am”. “Run the shopping cart algorithm through the Google Cloud Prediction API”. “Done!”
The tech is easy to Digitalls. What’s hard is getting traction. How do you get traction? You generate heat, buzz, make it lit, make it dope, get LBs and FBs. How do you do that? Well, now you’re talking marketing, and if you’re talking marketing in 2017, you’re talking fashion rules.
Every consumer good or service now has the characteristics of the fashion industry and the Digitall industry is no exception – seasons (the iPhone 8 following close on the heels of the iPhone 7), haute couture (a Vertu phone), diffusion lines (Chromebooks), runways (SxSW, Davos), celebrity fans (will.i.am, Ashton Kutcher) and of course mega ad budgets (three of the top 10 ten TV ad buyers are Digitall companies). Every good or service trying to find an audience is subject to the tides and eddies of the fickle public; a public amused to death by celebrity and (un)reality, and bored to tears by 157 channels with nothing on. Every good or service is launched into a sea of indifference with a cargo of hopes and dreams and a ballast of mortgage payments and VC funding.
Getting to terra pecunia requires marketing – big marketing – and big marketing without an understanding of wants and needs and whims and fancies and net promoter scores and active listening and blogger endorsements and product placement (etc., etc.) is hardly marketing at all. In other words ... fashion rules.
The Digitall industry – and Digitall people – live and die by fashion rules. Twitter is so last year. The cool kids have deserted Facebook. Vine is over. Instagram’s copying Snap. Slice is dope. Flight Club is lit. Digitall companies are all part of the Industrial-Entertainment-Fashion-Complex.
Twenty two years ago, Microsoft hired the Rolling Stones to help launch Windows 95. Mick Jagger was 51 at the time.
Tech’s come a long way.
So, back to the tribes. Can they mix? Can they co-exist? Can Originals become Digitalls? Will Digitalls become Originals overtime?
Sort of. In uneasy alliance. Some of them – the “perennials”. Over their dead bodies.
Of course the two tribes will continue to trade, and inter-mingle (and occasionally inter-marry). The Digitalls need the Originals, in the same way we need PG&E. The Originals can still call some shots and still have some skin in the Digitall game. As the great digital build out (making everything smart) gathers momentum, the tribes will be forced to cooperate; somewhere deep beneath a swipe right or a sighting of Bulbasuar is an Informix Warehouse Accelerator.
But the tribes are going their own way. Many of the Originals are looking to de-mount and hang up their arrows. Some still have many miles to ride but know that getting new blood into the tribe is harder and harder each year. All of them are aware that the tribe is not as strong as it used to be. Few of them can squeeze into skinny jeans and rock civil war era beards. Sure, they can still on occasion innovate and iterate and make the mousetrap a little better (though don’t forget that the last “big” enterprise app category to emerge (CRM) is now over 20 years old). But not that many people seem to care ...
The Digitalls, that give it a second thought, are conscious of their inheritance, but are more focused on the battles (fought on fashion rules) ahead. They’re pivoting and failing fast and doing the third launch https://twitter.com/bchesky/status/312438036929576962?lang=en in-between hob-knobbing at the Hirst http://www.vanityfair.com/culture/2016/10/hirst-bar and prepping their bunker in New Zealand https://www.theguardian.com/technology/2017/jan/29/silicon-valley-new-zealand-apocalypse-escape. They’re using tech, but are not of it. They’re trying to change the world.
The IT tribe of the first few generations grew from a small bunch of genii, scattered across the US and Europe. None of them could have conceived of what they would give birth to. The next evolutionary step will see the new tribe carry the DNA forward and build it into worlds that are still (to some) science fiction.
The Originals will be with us until all the world’s infrastructural workloads are automated away. Want to guess when that will be?
The Digitalls will be with us forever.
Or until they go out of fashion.