The phrase “old technology” should send shivers down just about everyone’s collective spine. If you have anything prior to an iPhone X you have old technology and are therefore not cool. If you have anything other than an i9 Core PC, with all the associated bells and whistles you are obviously riding jockey on a dinosaur of a computer. Golf clubs are now touting their technological advantages associated with adjustable club weighting and aerodynamics which are designed to improve everybody’s game, even though average golf handicaps have remained relatively level over the last decade.
This is all only sort of interesting until you start looking at what may best be described as “old technology” companies. Then it starts to hit much closer to home.
Companies that have been recognized as technology leaders and driving forces are now racing as fast as they can to try and out run the old technology moniker. Networking carrier giants such as Verizon and AT&T in this country as well as their foreign counterpart’s British Telecom, Deutsche Telecom and many others have all either announced or already enacted layoffs in the multi-thousands of people, each, in 2018. The same goes for big iron providers such as IBM and Hewlett-Packard. The same goes for networking equipment suppliers such as Ericsson, Nokia, Siemens and Cisco. Going further upstream, there have also been significant layoffs recorded across the entire semiconductor industry. The total number of technology and large company layoffs in 2018 is more than five hundred thousand people.
Yesterday’s technology leaders must now deal with all that old technology that they now have. Yesterday’s technology suppliers must now deal with supporting all that old technology. And they must all do it while continuing on the treadmill that brings forth the latest and greatest new technology. It appears to be an unsupportable model.
Just as 3G cellular was replaced by 4G which now faces the dawning reality of 5G, and PC cores became dual cores, which became quad cores, technology always marches on. It becomes faster. It becomes smaller. It becomes more efficient. Then it becomes a commodity.
This begs the question, can people become “old technology”? Technology companies of all types now find themselves in a race to divest themselves of their old technology as quickly as they can, in order to stay relevant in the new technology environment. With this shedding of old technology also comes the shedding of those workers and employees associated with that old technology.
As the Chinese curse states, we probably do live in interesting times. What was once the vanguard of new technology companies are furiously trying to reinvent themselves as they try to avoid becoming the old guard of old technology. What was once viewed as a competitive advantage in having technology savvy people is now becoming a burden as technology life spans and cycle times continue to become shorter and shorter.
Moore’s Law states that we should see a doubling of the number of transistors on a dense circuit board (re. processing power) every 2 years, and sure enough this has been very close to the case. The first cellular network was put into service about thirty-five years ago (1983) and today (2018) we are seeing the fifth generation of mobile communications make its appearance. If my math is correct, that equates to a new mobile network build out about every seven years. The same sort of progression in capabilities can be seen in just about every technology platform in existence. https://en.wikipedia.org/wiki/4G
So, what does this all mean.
I think to start, that it means if you are tied in some way to a specific technology, any technology, you risk becoming so associated with that technology that you as an employee in turn risk becoming considered outdated and past your usefulness when that technology hits its “old technology” finish line.
Now this is not a hard and fast rule. Those radio engineers that understood the 4G cellular network are probably your best bet for resources to understand the new 5G network engineering requirements. Probably. But as the lessons learned in the previous generations of mobile communications are applied to the next generations, are all of those resources going to be required? I point you back to the list of resource shedding companies that I noted earlier.
Supporting previous generations of technology continues to decline in importance as the next thing is now the best and most important thing. And the next thing is usually more efficient than the previous one.
And just as off-shoring and automation permanently changed the employment landscape for the manufacturing industries, so it is now coming to pass for the technology industries. As the relative cost of technology comes down (its price is actually remaining relatively level as its capabilities and speed expand), so the relative cost of the people required to implement and support that technology continues to rise.
I think the technology labor market is changing. It was not so long ago that business careers spanned one or possibly two iterations of a specific technology. Now with the two to seven-year generational technology horizons, a career should anticipate covering at least five and as many as ten or more technology shifts.
Being associated with a specific technology is no longer going to be good enough. It will more and more come down to which generation of that technology you are associated with, not just the type of technology itself. As businesses come to grips with the significant costs associated with supporting any technology other than the most recent iteration, the chance to be considered “old technology” will continue to grow.
It will no longer be good enough to be considered a subject matter or technology expert, because the subject matter and the technology will continue to change, and so will its strategic importance. And, if you are too closely tied to that technology, so will your strategic importance.
Customers too are facing this new market with increased issues. As they try to stay technologically current and relevant, they too will need to redirect resources away from the support of previous generations of technology. That doesn’t mean that the technology will be removed by the customer. It just means that the resources associated with sustaining it will by necessity be reduced. These limited resources will need to be continuously redirected toward the next generation of technology.
The old generation, both the technology and the associated people will continue to exist for some time. However, the market for them will change considerably. We have already started to see this market evolution in action. The cost associated with companies supporting old technology is starting to force them to sell off their outdated or older product lines to third party companies for continued support. These are companies that are making a business out of supporting old technology.
This is however, a double-edged sword. It is true that new technology companies will no longer face the cost and resource drain of supporting their old technology products, nor have to pay their old technology people, but they will now have to compete directly with their own old technology for the customer’s order. If the old technology can continue to be supported, will it be possible for the customer to delay the new technology purchase?
Buy selling off their old technology lines to other companies, they will in effect extend the life cycle of the old technology, otherwise no one would buy them. Customers could effectively delay buying decisions until prices, applications and values are more in line with their economic means.
So, what does this mean for the half million technology and large company employees that have been shed this year?
I think it means that there are probably more to follow in the coming near future as the new (and old) technology models and markets start to take hold. New technology companies cannot support their old technology businesses and structures. Old technology companies will have to become more efficient at support in order to make their business models work. They both will continue to drive all aspects of their business that do not directly interface with the customer i.e., Sales and Installation / Operations, to lower cost labor sources as the drive to reduce costs continues to intensify.
It used to be in the technology industries, that if you were a technology subject matter expert, you were in a relatively desirable position. Now, being too closely associated with a specific technology should at best be considered a short-term advantage as that technology will invariably age out rather quickly and receive the old technology tag. Technology careers and opportunities will not so much be about the depth of knowledge one has or accumulates about a specific technology, but the capability to move to and learn the latest technology quickly, before they get classified as old technology.