by Chris Potts

Inverting Moore’s Law, and Stimulating Demand

Jan 19, 20093 mins
IT Leadership

Companies are looking to take the benefits of Moore’s Law in cash rather than computing, while they search for ways to re-stimulate demand for their products and services.

In this week’s Economist  (January 17th, 2009), there are two unrelated leading articles, almost side-by-side, which together reinforce the contribution that CIOs and their teams are now required to make to their organization’s corporate and business strategies. 

The first article “Accelerating Downhill” is about how the world’s economies are suffering from a slumping demand for companies’ products and services.  The second, “Less is Moore“, explains that people are now looking for the dividend of Moore’s Law in cash, rather than in more powerful technologies.

Take these two articles together and you have three-pronged summary of the value that CIOs’ strategies must now achieve:

  1. Provide corporate-wide leadership in exploiting information and technology to grow demand for the company’s products and services.

  2. Robustly challenge the need for spending cash on new and replacement systems. Why can’t we do more with the existing ones?

  3. Demand that the suppliers of IT focus on making their products and services increasingly efficient, achieving the same levels of capability, quality and performance for less cost.

As my earlier blog “2009 CIO Strategy: Business Productivity will Trump IT Efficiency” noted, CIO’s must avoid the trap of concentrating their strategies on only the third of these.  In a market suffering from a slump in demand, we can expect the companies that successfully boosts sales while becoming more efficient to triumph over those that simply reduce costs.

The Economist observes in its “Moore for Less” article that ‘there is strong demand for technologies that do the same for less money, rather than more for the same price’.  Moore’s Law, being about transistors on a chip, will not to be matched by IT as a whole:  the costs of the same IT services will not halve every eighteen months or two years!  But the effective inversion of Moore’s Law is now in principle what is being demanded of IT suppliers.

Gartner envisage that IT investments will pick up quickly when the economy recovers.  Until then, however, companies are bound to look at producing more value from the same IT capabilities – especially in the form of growing demand for their products and services – and want those capabilities to cost progressively less. 

A refinement to the old ‘more for less’ maxim: 

“More from the same, and the same for less”.

P.S. Just after posting, this appeared:  “Intel slashes processor prices”