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21 March 2006

Cheap IT turns competition upside down

By Andrew Clifford

Cheap IT helps small companies compete on a technologically equal basis with large companies. As well as cutting costs, cheap IT helps you beat your competition with innovative products.

I used to work for a large company. Everything we did was geared up for large volumes. Our policies for buying and setting up IT always assumed that systems would need high throughput, performance and resilience.

These policies were completely appropriate for our customer-facing systems. The costs, though high, were proportionate. But we could never do anything quickly and cheaply. Even a test server for a small system could cost tens of thousands of pounds.

Setting up my own company, I thought I would see how far I could get with cheap, commodity IT hardware and services (as well as with free software, which I wrote about last week).

We rent virtual private servers, which give us full access to Linux servers connected to the Internet. The starting point for a server is ridiculously cheap, about the same as the cost of the electricity for running it ourselves. We have a scalable and resilient platform for our customer-facing products, with virtually no up-front cost.

Rather than buying expensive test machines, we use old PCs. We have built accurate replicas of our production environment for next to nothing.

We use cheap small office/home network infrastructure and cheap ADSL Internet connections. Because we work across a number of locations, we use PC-based services, such as Microsoft Messenger and Skype, to give us free phone calls and collaborative working.

This cheap IT has allowed us to develop products and start a business without major cost. If we were doing the same in a large organisation, it would have cost orders of magnitude more, so much so that the development may not have been justifiable.

This shifts the balance of power. There was a time when only large, well-funded organisations could afford the IT required to develop new products. But now cheap IT and free software lets smaller, nimbler, organisations compete on a technologically equal basis, but at a fraction of the cost.

It goes further than that. Working in an expensive IT environment sets your expectation that your products can be similarly expensive. But using cheap IT helps you imagine cheaper innovative products for your customers.

For example, at Metrici, we help businesses measure and improve their IT, to reduce their costs. We provide the structure, materials and analysis for this work through an automated system, at a fraction of the cost of human consultants. And because we have learnt to rely on Internet-based services, it's obvious to us to deliver our product as a secure service over the Internet. Our customers (who tend to have large IT departments) do not have to follow their own expensive procedures to install the product, which reduces their costs again.

We are only one example amongst many. Cheap IT is not just a way of cutting costs. It is strategically important because it helps you imagine cheap innovative products. Whether you are a large or a small business, you cannot afford to ignore cheap IT.

Next: Fix the system, not the results

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