This week the EU took a big swipe at Intel with a very large fine. Forget about the details of the case, who was right or whether the penalty will stand up after appeal – just think of it as one megatrend data-point. A recent piece in Business Week suggests that Barrack Obama is breaking with the Bush doctrine of turning a blind eye to many potential anti-trust situations. Again set aside your views on those United States Presidents – just note another trend data-point.
What’s happening here? Well a deep recession causes some deep learning and collective introspection. We have all learned that ‘too big to fail’ in fact means ‘must be bailed out’. It’s costing us all a lot in taxes. That’s causing radical thinking and debate both in the US and in Europe.
In the 60s, 70s and 80s big corporations were sometimes broken up by interventionist regulators who saw monopoly powers emerging from oligopoly situations. Holding a quarter or third of a market was cause for real scrutiny. Mergers were often stopped – not just given conditions. In the 90’s that faded. So when we ask ourselves how we ended up with companies that are both too big to fail and internally inefficient … well it is not hard to see that some of it might have been avoided.
If it gathers momentum – what will this international policy trend bring? In every major industry we should ask ourselves if newly empowered and interventionist regulators would choose to start breaking things up into smaller parts, to make the markets more dynamic and competitive. If that started to happen there would be a lot of big systems extrication projects and each change would bring forward options for enterprise platform migrations and legacy exits. Actually from an EA modernisation perspective .. it could be interesting.
The other side of such intervention would mean fewer situations where companies are ‘too big to fail’. That in turn might allow more failures. When companies do reach the edge, usually parts of them are sold on by the administrator as a going concern. Such business unit transplants have creative destruction effects on large scale IT architectures and management practices.
Maybe we all need some of this. More modern IT – from SOA to Cloud and M-Commerce to BPM, can only deliver its productivity effects to society if it is used. If behemoth companies are incapable of finding the change energy to move off 70’s and 80’s core business platforms, the value of technology progress is not fully realised. Or put another way – economic growth is partly stunted by mega-corp Luddites.
Regulators do make mistakes – sometimes big ones. The short term effects of their actions might be big fines, and thus profits – sometimes jobs. But over the longer term, the value-creating force of IT might be accelerated.
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