A theme running through my book is the idea that efficiency improvements, and the various methods for making products cheaper over time, have historically been dependent on some degree of repetition, on running your production process over and over again.
Well I generally agree with your article, I think you must note that car manufacturers have optimized the manufacturing processes at the expense of maintenance processes. When you have to remove body parts in order to replace a headlight the efficiency of the repair process breaks down completely. I have seen cars like the Ford explorer where it takes about 6 hours of the mechanic time to remove all the parts replace the headlight assembly and replace the rest of the parts.
A second Factor is the manufacturers build things in a way that you can't replace a simple part, such as a light bulb. Instead you have to replace the whole headlight assembly. This is particularly evident if you've ever had to replace a valve body on a Subaru transmission.
Totally agree. I had someone damage the rear tail light of my 2 year old Ranger and instead of having to just replace the lense cover the entire light unit had to be replaced and on top of that all the electronics of lane assist, etc. are built into the light unit which then needs to be recalibrated. Total bill was well over $1,000.
In the coming decade we might see the golden age of low volume manufacturing and hence a return of the age of the independent inventor like the 19th century.
This channels Alvin Toffler's "Future Shock" published in 1970. Even then, the American auto-buyer could specify a score of options when ordering a car, and FRED the Magical Mind made such production-line flexibility possible. Toffler would not have been surprised by AWS and its siblings. Indeed he might have asked, What took them so long?
Skyrocketing auto repair costs are attributable to one factor, bad design. Components frequently accessed at normal service intervals should be accessible, and they're not. The not very subtle denial of the right to repair noted by other commenters here, contributes.
Great article. Just one request: don't use AWS as your analogy. I get that it's very well known and therefore a great hook but the economics just don't match out.
AWS is far too expensive to be justified based on economies of scale (in hardware at least). The joke is that with AWS, companies buy the hardware every few months. The real benefit of AWS is that it works around two serious market failures:
1/ Company CTOs congenital unwillingness to pay for software. This happens in large part because they are incapable of differentiating between good and bad software. And one slice of said software happens to be extremely bad but also nominally free and that short-circuits people's brains.
2/ large companys and their entrenched bureaucracies that gate-keep basic IT services like new machines and storage drives.
AWS fixes both these problems. It pretends companies are paying for hardware when they are really paying for management software. With products like managed databases, this pretension is even thinner. We can see also that services which offer only colocation (e.g. Hetzner) are only able to charge a tiny fraction of what the major cloud providers charge.
It fixes the second problem because it very loudly advertises it's abilities. When the underlying system is capable of provisioning a new cloud bucket in seconds, it is much harder for the resident incompetent IT department to claim that they need seven pages of docs and four weeks to provide the same service.
Which is not to say that the cloud providers haven't innovated in hardware. They have! But this nets them only around a 2x reduction in cost. And their prices are more like 10x _higher_ than just the underlying hardware.
The economies of scale for AWS happens on Amazon's side: it gets cheaper for them to serve customers the more customers they serve. What they charge for that service is a different question entirely.
That doesn't quite work because software is so easy to distribute (modulo self-inflicted problems like OS design). They could have distributed the software but nobody would have been willing to pay for it. Even now, there are lots of companies (large ones like VMWare but also smaller ones like Oxide) that are trying to. There's a reason customers aren't switching to them despite much lower costs.
Besides, efficiencies in production are irrelevant to purchase decisions unless customers get a share of the savings. Otherwise, why bother using the "lower cost" provider at all? In the case of AWS, customers are paying higher costs than self-hosted hardware.
The biggest issue Brian is that capitalism depends on growth and the pillaging of resources to create waste via in built obsolescence, products that we don't really need and green washing to coerce us to believe that all is OK.
You might consider reading Gerry McGovern's book 99 days where he describes the dire state we are in as we head unconcernedly towards environmental disaster caused by the hidden costs and effects of 3% growth!
Well I generally agree with your article, I think you must note that car manufacturers have optimized the manufacturing processes at the expense of maintenance processes. When you have to remove body parts in order to replace a headlight the efficiency of the repair process breaks down completely. I have seen cars like the Ford explorer where it takes about 6 hours of the mechanic time to remove all the parts replace the headlight assembly and replace the rest of the parts.
A second Factor is the manufacturers build things in a way that you can't replace a simple part, such as a light bulb. Instead you have to replace the whole headlight assembly. This is particularly evident if you've ever had to replace a valve body on a Subaru transmission.
Totally agree. I had someone damage the rear tail light of my 2 year old Ranger and instead of having to just replace the lense cover the entire light unit had to be replaced and on top of that all the electronics of lane assist, etc. are built into the light unit which then needs to be recalibrated. Total bill was well over $1,000.
In the coming decade we might see the golden age of low volume manufacturing and hence a return of the age of the independent inventor like the 19th century.
This channels Alvin Toffler's "Future Shock" published in 1970. Even then, the American auto-buyer could specify a score of options when ordering a car, and FRED the Magical Mind made such production-line flexibility possible. Toffler would not have been surprised by AWS and its siblings. Indeed he might have asked, What took them so long?
Skyrocketing auto repair costs are attributable to one factor, bad design. Components frequently accessed at normal service intervals should be accessible, and they're not. The not very subtle denial of the right to repair noted by other commenters here, contributes.
How about Anduril? Is this not their pitch?
Great article. Just one request: don't use AWS as your analogy. I get that it's very well known and therefore a great hook but the economics just don't match out.
AWS is far too expensive to be justified based on economies of scale (in hardware at least). The joke is that with AWS, companies buy the hardware every few months. The real benefit of AWS is that it works around two serious market failures:
1/ Company CTOs congenital unwillingness to pay for software. This happens in large part because they are incapable of differentiating between good and bad software. And one slice of said software happens to be extremely bad but also nominally free and that short-circuits people's brains.
2/ large companys and their entrenched bureaucracies that gate-keep basic IT services like new machines and storage drives.
AWS fixes both these problems. It pretends companies are paying for hardware when they are really paying for management software. With products like managed databases, this pretension is even thinner. We can see also that services which offer only colocation (e.g. Hetzner) are only able to charge a tiny fraction of what the major cloud providers charge.
It fixes the second problem because it very loudly advertises it's abilities. When the underlying system is capable of provisioning a new cloud bucket in seconds, it is much harder for the resident incompetent IT department to claim that they need seven pages of docs and four weeks to provide the same service.
Which is not to say that the cloud providers haven't innovated in hardware. They have! But this nets them only around a 2x reduction in cost. And their prices are more like 10x _higher_ than just the underlying hardware.
The economies of scale for AWS happens on Amazon's side: it gets cheaper for them to serve customers the more customers they serve. What they charge for that service is a different question entirely.
That doesn't quite work because software is so easy to distribute (modulo self-inflicted problems like OS design). They could have distributed the software but nobody would have been willing to pay for it. Even now, there are lots of companies (large ones like VMWare but also smaller ones like Oxide) that are trying to. There's a reason customers aren't switching to them despite much lower costs.
Besides, efficiencies in production are irrelevant to purchase decisions unless customers get a share of the savings. Otherwise, why bother using the "lower cost" provider at all? In the case of AWS, customers are paying higher costs than self-hosted hardware.
The biggest issue Brian is that capitalism depends on growth and the pillaging of resources to create waste via in built obsolescence, products that we don't really need and green washing to coerce us to believe that all is OK.
You might consider reading Gerry McGovern's book 99 days where he describes the dire state we are in as we head unconcernedly towards environmental disaster caused by the hidden costs and effects of 3% growth!