[This is part of the Tough Times series.] In the series so far, I’ve been writing generally about organizational behavior aimed at getting through the ugliness. I’d also like to offer some suggestions for areas that are likely to be fruitful growth opportunities in tough times. The most obvious one, a no-brainer, is the tools and technologies we’ll need to comply with a massive change in the regulatory climate.

I wrote about regulation in general recently, and it’s hardly controversial to assert that we’re going to see a monster outburst of legislative and regulatory energy once we’ve got through the short-sharp-shock bit of the current crisis.

Storage · Here’s a very specific and confident prediction: The volume of information that needs to be saved and staged and delivered to met regulatory requirements is going to do nothing but grow. My feeling is that there’s not a good match between this particular business requirement and traditional big-system-storage offerings from EMC and friends. In fact, I’m optimistic that what we at Sun are doing around the Open Storage space will hit a sweet spot.

Regulation and the Web · At a more general level, I suggest that the designers of the new regulatory frameworks regulators consider the Open-Source mantra: “Given enough eyeballs, all bugs are shallow.” Which is to say, if you can expose the financial facts and flows to sufficiently many educated minds, that will make it qualitatively harder for bad actors to hide what they’re doing.

Let’s think about the regulatory technology that’s going to be needed. First, it’s going to have to scale to really large volumes of data, because the finance biz (even at its soon-to-be-smaller size) is huge. Second, it’s going to have to work across the network, because we’re going to have a major horror of self-regulation. Third, assuming anyone listens to my suggestion in the last paragraph, the information is going to have to be very, very, transparent; everyone agrees that the sheer opacity of the investment-instrument world is a major contributor to the current bleeding.

Let’s see: large-scale, network-enabled, and optimized for transparency. What kind of technology is that? Web technology. If you have finance-industry and Web expertise, you should be looking for opportunities.



Contributions

Comment feed for ongoing:Comments feed

From: Neil (Oct 17 2008, at 20:25)

I totally agree with your transparency suggestion, but I have to wonder: isn't there a difference between a software bug, which is presumably a 'mistake' by someone; and a financial irregularity, which is likely intentional, and therefore very well concealed.

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From: John Roth (Oct 18 2008, at 08:06)

Neil:

Yeah, people try to hide deliberate malfeasance. That's what accounting controls are about at the most basic level. Transparency defeats most attempts at juggling stuff because, at some point, the numbers don't add up.

Take the dot-com bubble as an example. At the most basic level it was based on faked traffic figures from one major company. Would better transparency have caught it? Depends on what figures were being exposed.

John Roth

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From: Henry Story (Oct 27 2008, at 02:25)

> Take the dot-com bubble as an example. At the most basic level it was based on faked traffic figures from one major company.

I had not heard that story before. Which company was that? What's the story?

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From: Robin Wilton (Oct 28 2008, at 11:27)

Hi Tim -

I recently made the following observation about data and governance in tough times:

"in the absence of pressure to the contrary, it is now easier to store data than to destroy it (especially selectively); it is easier to share data than to compartmentalise it; it is easier to aggregate data than to segregate it; it is easier to visualise data than to conceal it."

I've also just been asked to complete a survey about Data Protection, in which I was asked to rate the impact of 'not retaining unneeded data, or retaining data unnecessarily'. I rated it as "onerous" precisely because it is now so much easier to allow data to accumulate, than to filter, weed and selectively delete it.

So while I agree that there will be an increasing need to store data for compliance purposes, I think the elephant in the room is actually 'intelligent storage'... and more particularly 'intelligent disposal'.

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