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TECH TALK: IT’s Future: Leslie Walker and Dan Faber

August 15th, 2003 · No Comments

Networked Computing has Matured

Leslie Walker has a commentary in the Washington Post:

Most technology enthusiasts would probably concede that computers and the Internet are so pervasive now that by themselves they confer scant strategic advantage. But in the same breath many insist it’s the nitty-gritty of how companies use technology that can differentiate them — in other words, the nuances of how they implement digital links with partners, suppliers and customers still allow room for creativity and improvementBut such contentions can be true without contradicting Carr’s larger point — that networked computing has matured to a historic turning point, one marked by standards taking hold in key areas as they did with electricity, railways, the telephone and the telegraph. When standards settle in, they often sweep aside early advantages that vendors and their savvy business customers gained by exploiting proprietary technologies developed when the industry was in its infancy.

This perspective provides an interesting view of fading stars in the information technology industry, companies such as Oracle and Sun Microsystems, which rose on the basis of proprietary technologies that have been widely replicated by others. Consumer giant America Online is another company that brilliantly exploited information technology in the early days by developing proprietary software programs (think chat, e-mail, message boards and instant messaging) that have lost luster in the face of competition and growing Web software standards. And while other Internet pioneers such as Amazon.com and eBay have transformed hard-to-sustain technology advantages into more durable leads based on name recognition and huge transaction volumes, most early innovators will not be so lucky.

Carr may be early in calling this a turning point for the industry — for some companies, there probably still is strategic value left to be squeezed out of clever implementation of information technology. But the elbow room for seizing sustainable leads through technology is clearly diminishing as standards proliferate and computing power accelerates.

IT Commoditisation

An excerpt from Dan Fabers commentary in ZDNet:

I agree that IT infrastructure as we know it today is heading toward a kind of commoditization, but the road is not well paved.

Embedded in the universal call to reduce the complexity of IT is a move toward more standards, such as Web services, and a more level playing field in terms of technology. Prepackaged server clusters, software suites, outsourcing, and the push toward on-demand computing by the industry heavyweights all signal a focus on lowering the cost to deploy and manage technology. New categories or niches of software and hardware will continue to spring up that bring proprietary advantages to the vendors and customers, but they will mostly be short-lived. Differentiation among companies delivering IT products and services will have more to do with support, security, availability, integration, and the trust factor. Technology as a competitive weapon is more about execution and competency than a secret sauce.

Does that make IT less visible, more of commodity? Yes and no. It’s a commodity if the technology itself is built out of fairly standard components that don’t vary greatly among vendors or provide truly unique advantages. However, the problem is that most software vendors have not figured out yet how to build reliable, easy-to-configure-and-use software, and IT organizations are often dysfunctional. While IT executives wish that building an IT solution were as easy as plugging servers, software, and end-user devices into a network grid, that’s not the case. Carr’s notion of the commoditization and homogenization of infrastructure gives too much credit to IT as a mature industry with an established base of technology Hagel-Brown and GM CIO and best practices that will evolve linearly.

Although IT is becoming ubiquitous, especially via the Internet and the declining pricing for increasingly powerful technology, it is also messed up. The Internet may be the equivalent of the U.S. standard railroad gauge, but delivering value along that track is often elusive. IT is absolutely a strategic and competitive advantage to companies that can implement and manage it effectively-even if the constituent parts are more universal and provide no distinct advantage themselves.

We know a lot about automating processes with computers, for example, but we are just at the beginning of automating computing itself, which is an essential next step in IT evolution. In that scenario, several layers of IT can be viewed as a commodity—as a common foundation upon which new, strategically important technology innovations will arise.

Next Week: ITs Future (continued)


Tags: Tech Talk

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