The End of IT?

In an article in this months issue of the Harvard Business Review, author Nicholas Carr claims that, due to technology commoditization, “IT doesnt matter” as a strategic advantage.

“By now, the core functions of IT—data storage, data processing, and data transport—have become available and affordable to all,” the article claims, turning expenditures on such technologies into mere costs of doing business—an evolution similar to that of the steam engine, the telegraph, the telephone and the internal combustion engine. Similarly, the report said, overinvestment in technology in the 1990s echoes overinvestment in railroads in the 1860s.

The scary question is whether “people have already bought most of the stuff they want to own,” according to Bill Joy, the chief scientist and co-founder of Sun Microsystems Inc., who was quoted in the article. Vendors that are evolving to survive in this commoditized environment include Microsoft Corp., which turned its Office software suite into an annual subscription service—a “tacit acknowledgement that companies are losing their need—and their appetite—for constant upgrades,” the report said.

The report had three pieces of IT spending-related advice for enterprises. One: Spend less. Studies show that companies that spend the most on IT dont always post the best financial results.

Two: Follow, dont lead. Waiting means an enterprise gets more for its money, according to Moores Law, and decreases the risk of buying buggy products.

Three: Focus on vulnerabilities, not opportunities. Its hard to gain competitive advantage through use of mature technology, but its easy to get taken to the cleaners when systems go down.

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