Carr jumps on utility computing bandwagon

May 13, 2005, 03:45 PM —  THINKstrategies — 






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If you paid any attention to Nicholas Carr's infamous Harvard Business Review article entitled "Why IT Doesn't Matter" and follow-up book "Does IT Matter?" you shouldn't be surprised that he is now lending his name and support to the concept of utility computing. Carr's reemergence on the information technology scene in a new article in the Spring issue of the MIT Sloane School Review is once again generating controversy and debate that I think will ultimately serve as an accelerator for the utility computing concept.

If you did not happen to pay attention to the "IT Doesn't Matter" debate, here's a quick synopsis of Carr's argument: IT has evolved to a mature state such that it no longer represents a strategic differentiator. Rather, IT has become a basic commodity like electricity and, therefore, companies shouldn't continue to invest in IT to create competitive advantage. In fact, they should minimize their investments in IT so that they can redirect their limited funds and staff to other areas where the enterprise can create a strategic advantage.

Carr's views obviously caused a lot of commotion because they challenged the intrinsic value and reason for being for many IT products, services and people.

Now Carr is taking his argument to the next level by suggesting that because IT has become a commodity, it should be acquired in the same fashion as a utility. Anyone reading this column probably came to this realization a long time ago and you're probably wondering what the big deal is.

The big deal is that Carr's views are getting noticed and discussed by corporate executives. As IT professionals, what we read, discuss and experience on a day-to-day basis doesn't penetrate the mindsets of our corporate counterparts until it becomes fodder for their business publications and boardroom discussions. Carr's views may sound like old news to us, but they are setting off another round of alarms among corporate executives. Just as his original questions about the value of IT sparked difficult debates within enterprises the first time around, his new ideas will create more challenges for IT professionals trying to prove their value to corporate executives and business unit leaders.

Carr's entry into the utility computing equation represents a 'tipping point' for this new approach to IT. Added to his views is a new round of studies from Gartner, Deloitte and others that show traditional IT management strategies and outsourcing arrangements continuing to fall short in meeting corporate expectations.

THINKstrategies recently teamed with the Cutter Consortium to better understand enterprise IT professionals' utility computing views and plans. We found that while fewer than 10% of the enterprise IT professionals surveyed were currently deploying a utility computing solution, 40% plan to deploy utility computing solutions within the next two years.

Our survey also disproved the notion held by Nicholas Carr and others that enterprises will convert their entire legacy IT operations to a utility computing approach that relies heavily on third-party services. Only 3% of the enterprise IT professionals we surveyed expect to migrate their entire IT operations to utility computing, and fewer than 10% plan to outsource the implementation and ongoing management of their utility computing solutions to an external provider.

As our research shows, IT professionals are already recognizing that utility computing is a concept that cannot be ignored, and as the first stage of early adopters begins to produce measurable business benefits we will see more enterprises migrating parts of there IT operations to this new model.

Love him or hate him, there is no doubt that Carr's focus on utility computing will help to elevate the idea and accelerate the adoption of this new approach to IT from the top down. His latest writings will make the movement toward utility computing a more plausible alternative in the eyes of corporate executives.

IT professionals should see this as an opportunity rather than a threat and proactively work with their corporate executive counterparts to determine how utility computing applies to their long-term business goals and objectives.

THINKstrategies

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