Does 'IT' Not Matter? It So Does!

Sep 5, 2003

Erin Joyce

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 (, 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, 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 ( 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 "I think he's calling the game over too soon."

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

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

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

NYSIA's Bernstein begged to differ. 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. 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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