February 27, 2017
Early Adoption – A Bad Idea For Business
We all know someone that has the latest of everything, and many of us engineers are guilty of that. In marketing class this type of person was called an “early adopter”. An early adopter would have had the first iPhone, and then maybe jumped over to the Android phone when it came out. Maybe she had the first iPod. Most early adopters that I’ve known, which includes me and most of the members of my paternal side of my family (most of us are engineers by profession). As a group, we like gadgets. My father purchased “Pong” (one of the earliest video games), and the Timex Sinclair computer, which was a very early, but useless computer. It’s OK on a personal level, but horrible for a business to be that way. The reason is you need technology to mature before it is useful, and I’ll give a bit of a history lesson.
Way back in 1981 IBM produced its first PC. It had 16K of memory and ran on the Intel 8088 processor that ran at 5 Mhz. For comparison, the computer I am writing on now has a 4.5 GHz processor, which is a thousand times more cycles, and it has 4 cores in the processor. So, we can say it processes four thousand times faster. Except it’s faster than that. The 8088 was an 8 bit processor, and this processor is a 64 bit. I’m not really sure what that means, but it does mean it’s faster. It also has 4 cores, so it is in effect 4 processors vs. the one processor in the early IBM PC. This computer has 32 MBytes of memory, so that’s two thousand times as much memory, not counting the memory that is on the video card, the hard drive and the processor itself.
Ok, the technology has advanced. The big question was, what could you do with the technology in 1981? It turns out not so much. You could use Visicalc (the first spreadsheet – an earlier version of this post was in error, it became available in 1979) and one word processor. So, if you bought a PC for yourself, you could write some letters, do some budgets on the wordprocessor, and play with the BASIC computer language that came with it, and that was about it for a while. If you were a dedicated hobbyist, that was probably OK. You could play with BASIC and write various useless programs (like I did). For a business, a PC would be a pretty expensive investment for the few functions it provided initially. By the mid-eighties a lot of businesses had them though – I remember they would decorate the offices of senior executives and never get turned on.
Software did follow rapidly, but it was horribly expensive and often hard to use. In 1984 when I bought my own PC there were I don’t know how many different word processors out there, there were “flat file” databases and “relational” databases. VisiCalc had been the spreadsheet program, but it fell to Lotus 1-2-3. There were also “integrated” software packages that included a word processor, spreadsheet and database. I bought FrameWork from Ashton Tate, which was good, but in the Government we had the Perfect Software from some company that went out of business early on, and the package which was next to useless. Then the Federal Government went big on Enable, which was a little better than useless. Basically, in an office environment we all flopped around trying to figure what was best while a dizzying array of various software packages came and went.
The only things that consistently worked well were the boring stuff. Word processors, databases, and spreadsheets. Even those sometimes weren’t so good. The word processor in Enable was horrible, it was almost easier to type on a manual typewriter. The other software that came out in the first few years of PC’s added more work than they took away. Then there were the CAD programs. In 1981 there were a handful of companies that produced CAD systems that were based on minicomputers. The systems ran hundreds of thousands of dollars. Other than mapping, utility uses, or mega projects like nuclear power plants, I can’t see how that type of cost could be justified, you could never make that money back on the investment. As I remember the first CAD users were organizations like the Army Corps of Engineers, companies like Bechtel, and utilities – which makes sense.
In the late 80’s I worked for a very short while for a large architectural and engineering firm that was exceedingly proud of its CAD system that they bought some years back. It was an Intergraph system, which was really good at the time and technologically advanced. The management never would tell me how much it cost, but they said it was in the mid six figures. They were desperately trying to make it work by having the system operating 7 days a week 24 hours a day. There is only so much you can charge for creating drawings, and to make that money back you have to run your system. However, a drawing created by a CAD operator at 2AM when the design engineer is at home in her bed and not available to look over the CAD operator’s shoulder is usually one that needs to be reworked a few times. So, the system was time consuming and could run your cost on a project to two or three times more than hand drafting.
Because the company had put so much cost in the system, they refused to even consider a PC based solution like AutoCAD, which had started to mature nicely. An AutoCAD workstation at the time would cost you about $2,000 for the PC, $2,500 for the software, and $5,000 for the plotter. With about a $10,000 price for a workstation, you could put in 20 or more workstations for one Intergraph machine. The system wasn’t as advanced as Intergraph, but so what? This would have made a serious difference for the office I worked for, because at that kind of cost we could have given a CAD computer to every engineer and draftsperson, but they had already put a lot of cost in the older system and were suckering for the Sunk Cost Fallacy. That is when you pursue something down the rabbit hole because you put so much mone into it, and it never pays back.
Going forward, there were other things that came out that made little sense for a company to buy. The Palm is a good one. This was a Personal Digital Assistant that did things that later were added to cell phones and became smart phones. It had a schedule, it could synchronize e-mail to your computer, and it could hold an address book. It had a word processor too. OK, I had an appointment book that kept my schedule just as well. The synchronizing e-mail was silly, why connect a little Palm to your PC to download email when you could just check it on your PC? Also, were you really going to type a document on a screen about 3×4 inches with a little stylus? Yet loads of people bought them. They were fun toys, but would it be worth it to spend money to outfit your employees with them?
Today the technology has matured into smart phones, which are more like handheld PC’s. They are exceedingly useful with GPS, e-mail, texting, weather reports, web access, ability to read books… If you resisted the urge to be an early adopter for your business and got the devices when they started to mature, the investment would be justified.
A less extreme example are the tablets – like the iPad and Android tablets. I had an Android tablet, which I carried with me when I traveled to read books and watch TV and movies on the Internet. It was not so good for business though, actually useless with the exception of the Kindle app, which I could use to reference various texts wherever I was. Then the Microsoft Surface Pro came out, which can use a keyboard and all the Microsoft Office Applications along with doing what a tablet can do. We got one for all the engineers, the technology had matured.
So, where are we at today? In more recent years in engineering there has been a move to 3d type design software. The costs at first were outlandish, and there still are a lot of different packages out there. In recent years the price has started to come down and companies are drifting to a few different packages. We’ve gone with Autodesk Revit for buildings and Inventor for other uses. If we’d gone to these packages a few years ago the cost would not have justified the expense, we could not make money back on the investment.
I haven’t even touched on the things that led to a dead end. There were PCs with the CPM operating system, the Apple Lisa that cost almost $5,000 in the mid-eighties, the Commodore Amiga. Imagine if your office bought a bunch of Apple’s Lisa computers and then the system was discontinued? What if you bought a bunch of Next PC’s? My cousin, Bob, got the Apple Newton, which I thought was really great. Apparently not too many other people did though, the product was discontinued. Does anyone remember the OS/2 operating system that was to replace DOS? All of these got rave reviews by the media when they came out, but the technology ran into a dead end.
There are few things I can predict with certainty, but I can predict that newer disruptive technology will appear. Maybe it will be a quantum computer that can calculate at a dizzying speed. Maybe some form of holographic technology. Whatever it is, from a business side you need to be careful before you invest in it. History has shown that it is best to wait until technology matures a bit before you jump into it.