Reshaping Business Is Always Job Of Technology

The popular technology blog, readwrite, has recently published a post, “How The Web Is Reshaping Business In Its Image“.

I gathered the following main points from the post:

  1. Software is forcing us to change how we do business
  2. DevOps practices are helping businesses change the practice of software development and deployment
  3. Organizations have begun to use the public cloud to deploy modern applications

Reshaping Business Is Job Of Technology

Alas, most of the article is like “old wine in a new bottle”! Reshaping business is always the job of technology and web (as a technology) is no different.

Let me elaborate…
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Software Has Always Reshaped business

Business processes have always changed with technology, right from the days of the earliest ERP implementations, if not earlier.

Michael Hammer popularized the idea of Business Process Re-engineering (BPR) in 1990 and 60% of the Fortune 500 companies had jumped on to the bandwagon within three years.

By the way, Michael Hammer is a former professor of Computer Science at the   Massachusetts Institute of Technology (MIT)!

DevOps Is Not A Silver Bullet

The article cites findings from a survey conducted by Puppet Labs to claim that DevOps helps businesses win by letting them reshape around software development and deployment.

DevOps is a software development method  that stresses communication, collaboration and integration between software developers and operations professionals.

Doesn’t it sound very similar to the Agile method?

Of course, it does!

That is because, as Wikipedia notes, “Many of the ideas (and people) involved in DevOps came from the Enterprise Systems Management and Agile software development movements.”

However, DevOps is neither a revolutionary new idea nor a silver bullet for reshaping business.

Let us briefly understand how DevOps became popular.

There was no difference between (computer) developers and operators in the earliest days of computing.

These roles started to separate in the ’60s with the arrival of mainframe systems.

Minicomputers (70s) and microcomputers (80s) led to the modern “IT Operations” culture.

Google, Amazon, etc., led the current shift to DevOps by popularizing distributed computing spread over hundreds of thousands of nodes. They needed to manage “infrastructure as a code”.

Managing infrastructure through software is, however, not a radically new idea.

Perl started to automate system administration since the late 80s.

As the pendulum swings back, development and operations teams may again separate to improve efficiencies!

Public Cloud Has Its Limitations

The article claims that the adoption to public cloud by businesses is the clearest sign of the reshaping of business.

I am not so convinced.

Yes, organizations are increasingly using public cloud to deploy enterprise applications.

However, this is more because the public cloud providers have satisfactorily started addressing the security, compliance, and related requirements.

Cost-benefit trade-offs will always dictate the choice between cloud (public or private) and data center.

FATCA Compliance – 77,000 Banks And FFIs On-board

IRS_LogoFATCA (Foreign Account Tax Compliance Act) is an US federal law created to address tax evasion by US taxpayers by using secret, offshore, bank accounts.

FATCA is designed to increase compliance by U.S. taxpayers rather than to enforce collection from foreigners.

FATCA will come into effect from July 01, 2014. Starting June 2014, the IRS (Inland Revenue Service) will publish / update the list of registered FFIs on a monthly basis.

The current registration status is as follows:

  • 73,000 banks and FFIs have registered with the IRS
  • 500 US businesses have also registered
  • 70 countries have signed FATCA pacts with the Treasury Department

The following chart provides information on the countries and their registration numbers:

Is it surprising that the Cayman Islands leads the charts with almost 15,000 registrations?!

More About FATCA

FATCA lays down three main requirements:

  1. All US citizens (including non-resident citizens) have to report their financial accounts held outside of the United States, if the accounts are generally worth more than US$50,000
  2. Foreign financial institutions (FFIs) have to report directly to the IRS certain information about financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest. The information includes account holders’ names, TINs, addresses, and the transactions of most types of accounts.
  3. Foreign investors can no longer swap their US dividends into “dividend equivalents” to avoid paying taxes

FFIs will need to register and sign an agreement with the IRS. Those that choose not to do so will be subject to 30% withholding on all US payments and could effectively be frozen out of US capital markets.

FATCA is a controversial law and its opponents raise questions on almost all the aspects of the law. Following are some of the important issues:

  • Cost of implementation could be more than the extra revenue
  • IRS is not yet fully ready to handle the extra complexity
  • FFIs may not invest in the US markets and this may lead to “capital flight”
  • Foreign relations may suffer as countries have to comply at their own costs
  • Extra-territorial reach of US even in those countries that do not have any significant dealings with US
  • US citizens may renounce citizenships for moral and practical reasons
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