IT Agility Drives Business Agility and Business Agility Drives Profits

Use responsiveness and innovation to differentiate your products or participate in what economists call a “grim race to the bottom”. That’s what happens when companies compete mostly on price in a world where products and services are quickly copied by competitors. If price is the only meaningful difference between two products then they are commodities and customers will simply chose the lowest price. When that happens, companies get drawn into price wars that wind up destroying profits, markets and companies themselves.
 
Business agility is about finding ways to wrap otherwise commodity products in a blanket of value added services that can be constantly tailored to respond to customers’ changing needs. Customers want a good price but that doesn’t mean they want the lowest price if a product provides unique features and services that customers value. Companies that learn to wrap their products in a tailored blanket of value added services consistently earn higher profits – that’s the agility dividend - and that’s what business agility is all about. Also, since most value added services are information based, that’s how IT becomes part of the profit equation in a company instead of just a cost center.

[ I do lively presentations on this and related topics - mhugos@yahoo.com ]
 
Agility is Creative Responses that turn Problems into Opportunities
 
F5 Networks is a company that got its start in the late 1990s making load balancers to help businesses manage performance of their datacenters and websites. They went public in 1999 and then ran smack into a wall with the collapse of the dot com bubble in 2001. By 2002 they were experiencing the sense of urgency that tough times are so good at creating. Most companies respond to this sense of urgency by drastically cutting costs, hunkering down, and waiting for better times to return.
 
This response is understandable, but it is not agile. Agile companies do more than cost cutting; they find ways to respond creatively to difficult situations. They use that sense of urgency to motivate them instead of letting it intimidate them. They explore new ideas and in those new ideas they find the seeds of their next round of growth.
 
F5 Network’s CEO John McAdam explained what happened, “In 2002 a group of our system architects came and told me since we do load balancing we see all the data coming into and going out of our customers’ datacenters. They told me we have an opportunity to do a bunch of other things to improve datacenter operations.” That was the start of the TMOS development project (TMOS stands for Traffic Management Operating System). John saw the opportunity his system architects pointed out and he gave them his backing to explore it.
 
How to Differentiate a Commodity Product [like a load balancer]
 
While others during the period from 2002 to 2005 were hunkered down (and competing on price as their once high tech products became commodities), F5 took a different route. They developed TMOS. TMOS enables customers to offload functionality and virtualize their servers. “Where competitors like Cisco Systems focus on the notion of building point solutions in hardware, we focus on virtualizing servers and other hardware so customers can scale up through use of software,” said John.
 
The TMOS micro-kernel is proprietary to F5 but it lets people use open source Linux to write new rules to monitor and manage the data going into and out of their datacenters These rules are called “iRules”. F5 hardware is optimized to run

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