Moneybusiness: Beane, Business, and Cloud

Like several million people this weekend, I went to see the movie Moneyball.  The movie is based on the book of the same name written by Michael Lewis.  It’s a baseball movie that isn’t about baseball  -- well, not much anyway.

In 2001, Oakland A’s General Manager Billy Beane saw his team lose in the playoffs to the New York Yankees.  The Yankees had a payroll of $125 million compared with the Oakland’s $41 million.  Beane knew the economics were not going to change – Oakland was a small market team that would have small market salary limitations.  

Rather than settle for mediocrity, Beane decides to adopt an unused and unproven strategy based on statistical analysis as a primary means of selecting players rather than traditional scouting techniques.

The statistical analysis methods, called sabermetrics, and developed by Bill James, allows Beane to find undervalued players with winning skills and potential – it allows Beane to field a playoff caliber team within Oakland’s budget.

Beneath the baseball overtones, the movie is about the struggle and drive to create fundamental change.  The traditional method of using a stable of paid team scouts to select players did not like the change.  The scouts dismissed Beane’s approach flatly.

When confronting the scouts about why he was essentially ignoring their recommendations for players selected using traditional scouting methods, and exasperated Beane concludes, “adapt or die.”

The sabermetrics model proved to be a better model. Every major league baseball team now uses the methods described in Moneyball.  Beane, James, and a handful of others fundamentally changed baseball.

A similar transition is happening today in cloud computing.  The cloud is simply a better way for most businesses to operate.  The old methods require discrete purchases of software, hardware, and system integration to provide basic business IT function.  They require on-site or hosted server rooms, and the expense and headaches that come along.

The new way collapses the hardware, software, integration, and hosting into a single capability provided by a single vendor.  It lowers cost, reduces complexity, and provides unprecedented scalability and flexibility.

The message for business owners is as clear as Beane’s message to the scouts – adapt or die.