Daily Biz Solutions

Guest Post by Mitchell Habib, COO, Nielsen Company
In September of 1962, John F. Kennedy articulated his now famous vision that launched the U.S. space program: “We choose to go to the moon in this decade.” These words set into motion a space race that culminated in Neil Armstrong’s moon walk seven years later on July 20, 1969. If you read the full text of Kennedy’s ’62 speech, his space challenge was part of a larger theme, namely the breathtaking pace of technological change being harnessed for the future. Kennedy’s was just one of several visions about scientific progress in the ’60s that would transform the world.

Another was a powerful prediction that completely changed the technology industry and its economics. In 1965 Gordon Moore, one of the founding fathers of the computer industry (he co-founded Intel), created one of the most widely known principles in the field of IT. Moore’s Law predicted that the number of transistors on a chip would double about every two years. It further promised lower costs and increased innovation as a direct outcome.

To maintain status quo in today’s marketplace, it is imperative for business leaders to develop strategies for technology and data management based on Moore’s prediction and take proactive steps, including: 1) Invest wisely – find the right strategic partners; 2) Start small, learn and gain some early wins; 3) Organize for success; and 4) Think differently about data.

For forty years the industry has focused on the cost / productivity side of Moore’s prediction, for the most part ignoring his more subtle but also more powerful message about the accelerating pace of innovation. In hindsight it’s not surprising that the pace of innovation and our ever increasing appetite for technology have driven overall IT costs higher. This is now creating pressure on operating plans and tension between CIOs and CFOs of corporations whose CEOs had expected IT costs would be declining because of the populist belief regarding the trajectory of the IT industry.

It’s the availability of better technology and the insights it makes possible that feeds our growing appetite for data. Companies today collect more data than ever before; they use powerful algorithms to find patterns in the data to solve all sorts of real-life problems that were previously unsolvable. A 2008 International Data Corporation (IDC) study projected that, in 2010, the world will create over 1,200 exabytes of data (an Exabyte is 260 bytes of data – see “Overload” graph at right). This projection rings true, and retailers and FMCG (Fast Moving Consumer Goods) manufacturers have become increasingly proficient at finding new insights in large amounts of data. This data historically was aggregated because the complexity of queries required it, or because disaggregated data didn’t exist or was too costly.

Traditionally companies have utilized data to understand what happened yesterday or today. To compete in the marketplace, data is now being used to predict what will happen in the future. To do this, companies are increasingly capturing real-time disaggregated data and analyzing information flows in real time, improving their ability to accurately project the future. In his books The Power of Now and The Power to Predict, Vivek Ranadive describes an evolution over time to event-driven business models where the need for real-time information is creating a “data explosion.” Ranadive reaffirms that CPU, memory and storage costs have declined over the past 40 years as Moore predicted, but the costs to store and process exponentially increasing amounts of data, and the need for smart people to analyze it, have increased at the same rate. This is the paradox of Moore’s Law.

Moore’s Law foresaw an era of greater innovation, the specifics of which were understandably blurry in the ’60s. Today, innovation drives clients to demand insights faster and faster and to collect more and more real-time data. To meet this demand, IT departments have to spend more, despite lower component costs and increased performance. At the end of the day, Moore’s Law, which has been a catalyst for major transformation of business, government and science, may require a reinterpretation.

When Kennedy articulated his vision about space in 1962, he acknowledged that the journey would not be without risk. He recognized that we were venturing into areas that were not well understood. Just three years later, before the microprocessor even existed, Gordon Moore made an equally compelling prediction that would define the modern history of technology. Fast forward to today: despite the visible accomplishments of the past forty years, the future of the U.S. space program appears somewhat uncertain. The technology industry, which has also enjoyed four decades of unprecedented growth, thanks in part to Gordon Moore, is now venturing into unchartered territory as we begin to address the accelerating demand for real-time, disaggregated data.