Does ‘IT’ Not Matter? It So Does!

Nicholas Carr may have started the debate with his Harvard Business
Review
article last May called “IT Doesn’t Matter.” But the article’s
thesis — and the resulting arguments it attracted — have taken on a life
of their own.

Even today, after months and boatloads of ink that rode the wave of
impassioned rebukes that followed the piece, “IT Doesn’t Matter” has seemingly
become a fixture in the IT ecosystem. The article has become a starting point in a debate over how “commoditized” the IT industry has really become. And over what’s in store for its future.

Carr’s article said that, from a strategic standpoint, “IT Doesn’t Matter”
anymore because its near ubiquitous adoption in corporate America has
rendered it as a commodity, much like electricity is considered today.

Carr wrote that “the rapid affordability of IT functionality has not only
democratized the computer revolution, it has destroyed one of the most
important potential barriers to competitors. Even the most cutting-edge IT
capabilities quickly become available to all.”

In short, as he also points out on his Web site (www.nicholascarr.com),
as information technology’s power and ubiquity have grown, reaching a
commodity-like status across major companies of the world, IT’s strategic
importance has diminished.

Take the examples of Microsoft and IBM, two major technology companies moving
to business models that charge for software or computer upgrades on a
subscription or utility basis. Carr’s point: as their products become ubiquitous, so widespread across the enterprises of corporate America, technology vendors are now positioning themselves as something approaching
utilities.

He argues that the rise of the IT industry is following a similar path as the
rise of electricity, with the dot-com-go-go-1990s resembling a similar run-up to the
rapid adoption of and investment in electricity during the early part of the
20th century.

“One of the most salient characteristics of infrastructural technologies
is the rapidity of their installation,” he wrote. “Spurred by massive
investment,
capacity soon skyrockets, leading to falling prices and, quickly,
commoditization.”

The piece immediately became a touchstone for rebuttals from the likes of
Bill Gates and Intel’s Craig Barrett, who wrote or spoke out against its
main theme. Gerry Cohen, founder of Information Builders, New York City’s
largest software company, wrote in an op-ed that the electricity industry
was a flawed analogy to use alongside the IT industry.

“IT is much more complex than electricity,” Cohen said.

Yes, it is, Carr told internetnews.com, but electricity was also
once very complex as it
was becoming adopted, and as infrastructure was rebuilt to make way for its
use.

“I think if you look at the actual pattern of how companies use
[technologies], you see a similar pattern playing out,” he said. Look at how
quickly a new technology is now copied and reproduced across an industry, to
the point that any competitive advantage enjoyed from the early use of the
technology is quickly subsumed by a horde of similar commodity inputs.

In the article, Carr warns that in the long run, the greatest IT risk
facing most companies is overspending on IT. No question, he wrote, IT may
be a commodity, but since it is so intertwined with so many business
functions, it will continue to consume a major portion of corporate budgets.

“What’s important — and this holds true for any commodity input — is to
be able to separate essential investments from ones that are discretionary,
unnecessary, or even counterproductive.”

The article concludes by urging three new rules for IT managers: spend
less; be more of a fast-follower rather than an early-adopter of technology;
and to focus on vulnerabilities, not opportunities.

“As corporations continue to cede control over their IT applications and
networks to vendors and other third parties, the threats they face will
proliferate. They need to prepare themselves for technical glitches,
outages, and security breaches, shifting their attention from opportunities
to vulnerabilities,” Carr wrote.

The article still has the IT world in a snit, agreed Bruce Bernstein,
president of the New York Software Industry Association. Indeed, Bernstein
has rounded up Carr and other technology writers for a debate about the
article — and the IT issue — at the NYSIA monthly meeting
on Monday (http://www.nysia.org). Information Builders’ Cohen will join the fray,
along with moderator Gary Beach of CIO Magazine; Steve Lohr, technology
writer for the New York Times; technology consultant Mark Stahlman and Gino
Menchini, commissioner of New York’s department of information, technology
and telecommunications.

Carr is “saying that you as a company are not going to do anything great
by deploying new technologies because if you do, it’s short-lived because
now everybody can access it,” Cohen told internetnews.com “I think
he’s calling the game over too soon.”

Look at BarnesandNoble.com, the online version of the offline book-selling
superstore, Cohen continued.

“BarnesandNoble.com never got to be as big as Amazon.com because
Amazon.com got there first and did it better,” including deploying the best
technology it could use, he said.

But Carr, in a conversation with internetnews.com, urged a second
look at Amazon.com, which is also now syndicating
its own unique selling platform by enabling other Web merchants to integrate
Amazon.com with their own sites. “What’s Amazon.com doing? It’s
commodiziting that technology,” he said.

NYSIA’s Bernstein begged to differ. Amazon.com isn’t commoditizing its
technology platform, it’s monetizing it, he said. “Commoditization is what
happened to the PC. Everyone has a PC and the value goes down. Amazon.com is
leveraging its technology to make more money for the company. Are they
putting it in the public domain? No. they’re selling it.”

Bernstein said he invited Carr to the meeting to discuss the issue because he’s “calling into the question the value of IT spending and strategic IT spending.
Obviously that’s a big issue for our industry.”

Carr said nothing has changed in the industry that would make him alter
his feelings about the article. “But the debate has been very interesting
and healthy.”

And with that, Carr had found a point on which many in the technology industry could agree, including NYSIA’s Bernstein.

“I guess it’s a good time for a big picture debate about the future of the industry,” he said.

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