EDS Anywhere? Part I
June 2007
With all of Yankee Group's mental horsepower these days focused on Anywhere—the emergence and implications of ubiquitous connectivity—when I had a chance to sit down recently with two of EDS's top executives, that's what I wanted to talk about.
For highlights from my conversation with Dennis Stolkey, Vice President, U.S. Communications, Global Network, and EDS Bank of America, see Part II.
Here's some of my discussion with Charlie Feld, Senior EVP for Applications Services. Charlie has been a well-known and respected CIO in his own right, and in between informal war stories about Frito-Lay, Southwest Airlines and Home Depot, we talked about the next wave of technology change and its effects on the enterprise.
Emily Green: Yankee Group's enterprise analysts are researching what we call the consumerization of enterprise technology. From consumers bringing iPods and other new toys to work, to the blurring of people's work and home lives with mobile e-mail and IM, we're seeing some seismic impact looming in how an enterprise uses technology. Agree?
Charlie Feld: You're right about the consumerization of the enterprise. But don't stop there—the enterprises' business partners and customers are being "consumerized," too. It's about putting technology at the edge, not the center, of a business.
I liken it to the diffusion in the last 20 years of time-keeping function to many other devices besides clocks, based on how much cheaper that functionality has gotten and the many contexts in which knowing the correct time is valuable: your microwave, your phone, etc.
Exactly. It's the pairing of the diffusion of technology with its consequence: the diffusion of work itself. Moving technology to the edge means putting the work that was done with it into new hands, also at the end of the activity.
True –– consumers are now buying their own tickets, printing their own family photos, configuring the computers they buy, and more.
Thus what I call the 21st-century business model: focusing on the demand side. It's based on the idea that the less a company owns and does, the better. You want little in the way of fixed costs and as much variable expense as you can.
The problem is that most large enterprises today grew up on the 20th-century model, which is a supply-side model where you make big bets on factories, warehouses, parts—with huge fixed costs. But nothing good happens in a warehouse. If GM's cars melted like ice cream, they wouldn't have gotten so good at storing them.
This is a big change in structure and focus for an existing business. Naturally, that has technology implications, but it pairs up well with the diffusion of technology to the edge.
What does that mean for EDS and its own mission?
EDS's clients are successful examples of the 20th-century model, like GM. So are we; we're the GM of our industry. We have to help them transform to the new model while we do the same to ourselves.
The US Navy has a command-and-control model that empowers decision-makers at the edge; it came from the long periods that ship commanders were out of touch with their superiors. They couldn't wait to get every instruction. It's a good philosophy to think about in a modern context, where we want to empower the edge of the company.
At the same time, I have worked with a lot of business founders, and my rule is, "the founder's business model is always the correct one for the company." For EDS, it's just that in today's world this requires modern software architectures, like software-as-a-service, with a strong central nervous system. That's why we're creating our own network and virtualizing data centers. People don't buy cars where they're built, and they're not built where they're designed. The network and the nervous system are key to a more nimble model, both for EDS and our clients.
Charlie Feld is a member of the EDS executive committee and a life-long Yankees fan; that said, he's welcome to visit us again in Boston anytime. J