Adobe just killed off its boxed version of Creative Suite, which includes widely used software such as Photoshop, Illustrator, and Dreamweaver. They’re replacing it with “Creative Cloud“. So now instead of buying the normal retail box version of the software which can cost thousands of dollars, it gets rented for about $50/month. It’s brilliant, actually…
Why? Two reasons: It gives Adobe an even cash-flow, and it effectively defeats software piracy. But that’s not the bad news. What’s really going to change is when other companies such as Microsoft, Autodesk, and many others start modeling their software distribution after Adobe. In a few years, it’ll be cloud everything and retail software will simply cease to exist.
And why not? Why pay $800 for Photoshop that’s going to be outdated in six months when you can rent the cloud version and always have access to the latest features for $20/month? Why spend $3,000 on AutoCAD when you can get it for $15/month? Why buy Microsoft Office for $400 when you can rent it for $10/month? Do you see where this is going?
But it doesn’t stop there. Dell and HP are changing their server business to support hypervisor hardware, and they’re slashing the PC offerings. IBM is getting out of the server business just like they got out of the laptop and workstation business. PC sales are falling year after year in favor of mobile devices. A large percentage of the newest generation of young people don’t and won’t own a PC. Exchange servers are being replaced with Google Mail. Entire MRP’s and CRM’s are going to Google Apps. Back-end servers are going to public cloud data centers such as Amazon and Rackspace, which is where websites have been going for years. Because it costs less. It costs less, and it works.
Where does that leave small and medium businesses? Very soon now, workstations will be replaced by virtual workstations in the cloud and business owners can simply rent everything they need for a fraction of the cost. Physical machines will still exist, but they’ll be replaced with very low-power laptops, tablets, and zero-clients. The PC x86 architecture will be replaced with lower cost ARM units. Data will automatically be backed up in the cloud data center. Even phone systems will be switched over to cloud-based virtual-PBX’s. It all sounds good, until we fall into the trap.
The Legacy Trap. Imagine holding onto a VCR from 1985 and a bunch of VHS tapes with all those precious home movies. Now in 2015, the VCR breaks. Since VCR repair shops are long gone, the only thing left to do is find a specialist who can transfer those VHS tapes to Blu-Ray in 3D, or find a DeLorean. Either one would be very expensive, maybe so expensive that you would just have to accept that those memories were gone forever. When this happens to computers and business systems, it’s very expensive and very messy. And while this all sounds a bit over the top, this is exactly what happens in small business all the time. Things get put off because other things, like making sales, are more important. Eventually, temporary becomes permanent, and the Legacy Trap closes over the throat of the now fatally-injured business.
I’ve seen the Legacy Trap kill businesses before. Every time, it is quick and sudden, and the only thing that takes a long time is the irreversible death-spiral. It happened to this one small high-tech electronics factory that employed 50-people, had $7-million/year in sales, and had been in business over 25-years. All of their engineering files were literally on a Mac from the late 1980′s, and then that Mac died. They thought they had backups and a way out. They were wrong. No one could help them, not even those $100,000 hard-drive recovery people. It took them 5-years to die; they drained their contingency funds, blew their credit, crashed their retirement funds, killed their benefits, and laid-off employees. They looked at the dust in their hands that had once been hope and refused to believe that all was lost. They went out of business April 1st, 2013. But their mistake wasn’t back in 2008 when the Mac died, is was back in 1991 when they stopped upgrading and the subsequent 17-years of doing nothing to fix it.
The trap happens because most small businesses and large alike treat IT and computer resources like a utility. They treat it like something that should cost less if only they could find new and creative ways to contain those costs, and they only throw money at it when they absolutely have to. In reality, Information Technology is supposed to be part of the business strategy. IT is leveraged to innovate, attract new customers, and grow business. IT is like a financial engine with a rate of return, so instead of spending less on it to “save money”, you invest as much as is reasonable and profit.
Expanding on my analogy: If a person wanted to invest heavily in the stock market, they would be an idiot not to seek the advice of a professional financial adviser. And when that idiot ends up poor, they blame the rich. I feel that anyone who is running a business and wrangling their own IT resources without the aid of an IT professional is equally stupid. And when their technology betrays them, they blame the very same IT people that could have helped them. So please, look to the future and ask the advice of IT professionals that you trust.