Newsletter June 2005

Can IT Fix $50 Oil?

• Can IT Fix $50 Oil?
• IT and Energy -- A New Area for Red Three
• Our New Web Site

Can IT Fix $50 Oil?

Can software solve the problem of $50-a-barrel oil? Of course not. Can it help companies save considerable energy costs? Absolutely. As we go forward with our newsletter, we're going to discuss how this is possible and talk about various interesting technologies and companies that are going to help solve our nation's energy problem. In this newsletter, we want to discuss this new emphasis, and also introduce some changes to our Web site that we hope you'll find informative.

IT and Energy — A New Area for Red Three

As you know, Red Three focuses on helping businesses work with technology effectively. In our work over the last several years, we've realized ever more clearly that the days of easy return on investment from business software are over. This doesn't mean that companies can stop investing in technology. It does mean that you can no longer expect dramatic improvements from your investments.

We asked ourselves, where can software and technology make a difference? In thinking about this — and playing to our strengths working with businesses rather than with the government or health care sectors — we decided that energy is going to be the next area where technology can make a difference. While we are not in business to predict the price of oil, we can say with certainty that energy won't be cheap. Indeed, for many businesses it's not only the $50 oil but the ever-more-expensive natural gas that presents the challenge. Burning natural gas is the primary way we generate electricity in this country, and it's more than doubled in price over the last three years.

How can software help solve the problem? Think about the expansion of companies' inventory control over the past 20 years. Back in the '80s, even some very sophisticated retailers and manufacturers had no reliable company-wide information on the subject of inventory; now almost everyone does. Today, it's energy that companies don't have enough control over. Sure, they see their total bill, but they really have no idea what accounts for it. Until now, that hasn't been much of a problem, since electricity wasn't a major expense for many companies. But the situation is changing. If software can help companies understand their energy use, it can help them save perhaps 20% to 30% of those costs.

Unlike enterprise software, energy software and allied technology is far from being a well-defined field. That's what makes it interesting. We look forward to your feedback.

Our New Web Site

We've just relaunched our Web site. In doing so, we had three goals:

1. Better content
2. Better content
3. Better content

What kind of content, you may ask. In working on the newsletters, we found that topics come up that we can't squeeze into our monthly format. So on our site, we've started a blog called "Technoskeptic." The name is from our general attitude toward all technology. There's a lot of interesting stuff in the market, but only a minority of it works, and an even smaller percentage is useful for any given customer. Thus, Technoskeptic. We plan to post several times a month, and we'll deal both with Red Three's traditional area of interest — business software — and our new area of focus, energy technology. To give a couple of examples, we'd like to point to our comments on Computers don't kill data, people kill data and You light up my life — solving real problems with software.

With the site, we hope to continue providing you with more information you can use as you work with information technology.

Red Three Consulting: Transforming Information Technology into Answer Technology