Follow the Money

March 26, 2009

Hal Pomeranz, Deer Run Associates

I’m eternally amazed at how much cheaper computers, disks, networking gear, and pretty much everything IT-related has become since I started working in this industry.  In general, it’s a great thing.  But my friend Bill Schell recently pointed out one of the darker aspects of this trend during a recent email exchange.  Back in the mid-90’s Bill was running the Asia-Pacific network links for a large multi-national.  The “hub” of the network was a large Cisco router that cost upwards of a quarter of a million dollars.  As Bill pointed out, the company thought nothing of paying Bill a loaded salary of roughly half the purchase price of that router in order to keep it and the corporate WAN running smoothly.

Fifteen years later, you can get the same functionality in a device that costs an order of magnitude or two less.  And guess what?  Companies are expecting the costs associated with supporting these devices and the services they provide to be dropping at roughly the same rate as the cost of the equipment.  This translates to loss of IT jobs, or at least their migration to other IT initiatives.  It doesn’t matter that the functionality of the newer, cheaper devices is the same or perhaps even more complicated than the more expensive equipment they’re replacing.  Nor does it matter that the organization is expecting the same service levels or indeed even increased support for new applications and protocols.  “Do more with less” is the mantra.

This trend has all sorts of implications: hidden inefficiencies because reduced support levels impact critical business processes, significant security holes allowed to remain open due to insufficient levels of staffing and expertise, etc.  But what I want to talk about today is the implications for the career path of my fellow IT workers who are reading this blog.   And let me cut right to the bottom-line.  If you want your IT career to be long and profitable, make sure you’re supporting technology that costs a lot of money.  When you see the price of the equipment you’re managing dropping precipitously, start retraining on something new.

Let me give you an example from the early part of my career.  My first job out of college was doing IT support in an environment where they were dumping their Vax systems that cost hundreds of thousands of dollars for Unix workstations that cost tens of thousands of dollars.  Bye-bye Vax administrators, welcome the new, smaller coterie of workstation admins.  And it’s worth noting also that the Vax admins had replaced a small army of mainframe support folks from the previous generation.

And now 20 years later, commodity hardware and virtualization are forcing my generation of system administrators to move up the food chain in search of employment.  Some folks were lucky enough to keep their jobs in pursuit of server consolidation efforts, but notice that they’re now supporting orders of magnitude more systems in order to justify their salaries in the face of reduced equipment costs.  Storage technology was a nice pot of money to chase for a while there, and many of my people made the transition into SAN administration and similar jobs.  But again downward price pressure is being felt in this arena and the writing is on the wall– “do more with less.”

Some IT career choices seem to have historically provided safe havens.  The cost of database installations seems to have held steady or even increased as organizations have wanted to harness the power of larger and larger data sets and as the number of databases in organizations has exploded.  So DBA has always been a good career choice.  Information Security has also been a steady career choice because its budget is typically a constant fraction of total IT spending, rather than being tied to any particular technology.  Plus all of the recent regulatory requirements have ensured that Information Security’s percentage of the total IT budget has been going up, even as total IT budgets are shrinking.

So please keep these thoughts in the back of your mind as you’re plotting your next career moves in this difficult economy.  I’ve seen too many good friends pushed out the door in the name of “efficiency”.


2 Responses to “Follow the Money”

  1. Brian said

    Great observation. Another thing that I have noticed is that the mentality of “everything costs a lot” is still carrying on when it comes to purchasing. Even though prices have dropped so much, as soon as the conversation of buying something new comes up, everyone seems to forget this and it’s suddenly treated as if it /still/ cost a ton of money. So you wind up with people who are already under-appreciated and underpaid working longer hours so they can work around something that could easily be fixed with more CPU, RAM, or disk. I’ve seen this mostly in very small companies where there might be only 1 IT guy, and the boss is very disconnected from technology.

  2. qhartman said

    Good advice Hal. The danger of that is potentially pigeon-holing oneself to the point that it can be difficult to find an organization that needs your high-end skill set. This is particularly true for someone who hasn’t yet made a name for themselves in the industry.

    To that point, I’d add that a willingness to relocate is key to making this plan work.

    @Brian – I’d agree with your assessment that the phenomenon you describe happens more in smaller companies, but I’d argue that it gets worst when the boss is “kinda” connected to technology, not very disconnected. In my experience, it’s a bell curve. At one end you have “I don’t understand this at all, so you do what it takes to make it go.”. At the other you have “I know that this investment will pay for itself by making your job easier / faster because I really understand it”. Both of those are pretty good situations for a competent admin to be in. In the middle you have the wasteland of “I have an iPhone and know the buzzwords, but I don’t know how any of this fits together and that seems like an awful lot of money to replace something that seems to be working pretty well as it is.” Oh, please no.

    That middle ground is where the lone IT person really needs to be very politically savvy and/or somewhat bull-headed. Otherwise they will end up getting stuck in a really bad situation.

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