In this article, published in the May 2003 edition of the Harvard Business Review, I examine the evolution of information technology in business and show that it follows a pattern strikingly similar to that of earlier technologies like railroads and electric power. For a brief period, as they are being built into the infrastructure of commerce, these “infrastructural technologies,” as I call them, open opportunities for forward-looking companies to gain strong competitive advantages. But as their availability increases and their cost decreases – as they become ubiquitous – they become commodity inputs. From a strategic standpoint, they become invisible; they no longer matter. The staff of HBR voted “IT Doesn’t Matter” the best article to appear in the magazine during 2003.
This article provides a small part of my broader exploration of information technology and business strategy contained in the book Does IT Matter? Information Technology and the Corrosion of Competitive Advantage, published by the Harvard Business School Press. You can read the full text of “IT Doesn’t Matter” on my blog. The following list of reactions to the article was compiled in 2003 and 2004. Many of the links, unfortunately, have become broken over the ensuing years.
responses to article
“Carr’s article just won’t stay debunked.”
- Bob Metcalfe
Information Week’s editor in chief, Bob Evans, provides another counterpoint to my article in that magazine’s May 12 issue. He also says, “The article is thoughtful and sweeping and quite interesting to read. I’d heartily recommend it.”
Stewart Alsop mentions “IT Doesn’t Matter” in his column in the May 12 edition of Fortune.
A somewhat testy Craig Barrett, Intel’s CEO, “fired back” at my article in remarks to reporters before a May 15 analysts meeting, arguing that the IT infrastructure is critical to competitiveness. Judging from his comments, I’m not sure Mr. Barrett actually read the article (I don’t blame him; I’m sure he’s busy). As I make clear in the piece, the IT infrastructure is indeed essential to competitiveness, particularly at the regional and industry level. My point, however, is that it is no longer a source of advantage at the firm level – it doesn’t enable individual companies to distinguish themselves in a meaningful way from their competitors. Essential to competitiveness but inconsequential to strategic advantage: that’s why IT is best viewed (and managed) as a commodity.
Steve Lohr has another excellent article on the prospects of the tech industry in the May 16 New York Times (reprinted in the International Herald Tribune). He features my article as well as Craig Barrett’s remarks on it. He makes two critical points that are sometimes being lost in the current debate: “. . . it is possible to agree that technology can deliver broad productivity gains without necessarily delivering higher profits or competitive gains for individual companies, a point made by Mr. Carr. It is also possible to agree that the technology industry continues to be innovative and important, without also accepting that it will be a growth industry as it has been in the past.”
John Hagel and John Seely Brown have written a response to my article, saying that it “will have a significant impact in the business world” (but that it’s “also dangerous”).
General Motors CIO Ralph Szygenda offers some thoughtful comments on my article in the May 19 Information Week. He says, “Nicholas Carr may ultimately be correct when he says IT doesn’t matter . . . [but] business-process improvement, competitive advantage, optimization, and business success do matter and they aren’t commodities. To facilitate these business changes, IT can be considered a differentiator or a necessary evil. But today, it’s a must in a real-time corporation . . . I also agree on spending the minimum on IT to reach desired business results. Precision investment on core infrastructure and process-differentiation IT systems is called for in today’s intensely cost-conscious business versus the shotgun approach sometimes used in the past.” I find it interesting, and perhaps telling, that while my argument has certainly raised the hackles of IT vendors, consultants, and pundits, most of the actual IT executives I’ve heard from have expressed genuine interest in and considerable agreement for my point of view.
Computerworld takes another whack at the article in its May 19 issue: “You can get real business advantage with technology. You just don’t get it from products, services and information. You get it from processes, skills and execution – the same things that let any business differentiate itself in ways that don’t involve IT.” So you can get advantage from technology, but not actually from the technology. Okay. I can live with that.
eWeek has published a brief article on “IT Doesn’t Matter.”
Bill Gates “assailed” my article in a speech at Microsoft’s CEO Summit on May 21, saying, “And so when somebody says, to take the extreme quote from the Harvard Business Review article, they say IT doesn’t matter, they must be saying that with all this information flow, we’ve either achieved a limit where it’s just perfect, everybody sees exactly what they want, or we’ve gotten to a point where it simply can’t be improved – and that’s where we’d object very strenuously.” Just to be clear, what the article argues is that we’re at the point where any technological improvement in the management of information will be quickly and broadly copied, rendering it meaningless for competitive advantage.
USA Today has a smart piece in its May 22 edition that examines the different competitive approaches of IBM and Dell through the lens of my article.
Information Week has posted a brief article titled “CIOs Sure Think IT Matters.” It quotes the CTO of General Motors saying, “Brakes are a commodity, but I don’t think anybody would say they don’t matter.”
David Kirkpatrick, a tech writer at Fortune, has launched a spirited, but glancing, attack on my article. Kirkpatrick first offers a convenient misreading of my argument, claiming that it deals only with hardware rather than with both hardware and software (not true at all), and then uses that as a platform for some furious verbal hand-waving. Of course hardware doesn’t matter, he says, and then quotes a Microsoft executive: “the source of competitive advantage in business is what you do with the information that technology gives you access to.” Yes, but how companies use the information they collect – about markets, operations, money flows, etc., etc. – has always been a potential source of advantage, or disadvantage. (The same could be said of the way they use electricity.) Making such a point isn’t particularly interesting, but it does enable you to neatly sidestep the issue of IT commoditization. [Note that Fortune is now charging for access to its archives. Thanks to those AOL TimeWarner synergies, however, you can still read this piece for free over at CNN.com.]
Adam Lashinsky, another Fortune writer, contrasts my argument with Kirkpatrick’s in a piece on the CNN/Money website. Lashinsky concludes: “As in any good intellectual debate, both writers make good points. Carr is accurately describing the technology world in the post-bubble era. Kirkpatrick proves that innovation isn’t over yet. My hunch is that prudent investors, however, will side with Carr.”
A thread of messages on “IT Doesn’t Matter” has begun to unspool on ZDNet. It’s noteworthy only because it includes the first airing, to my knowledge, of a conspiracy theory regarding the origins of my article. “In all likelihood,” the poster writes, “it’s a group of rich individuals with similar interests in keeping IT wages down that not only had a hand in the HBR article in the first place, but also a hand in making sure references to it appeared in the NYT.” My lips are sealed.
In the May 29 Washington Post, Leslie Walker takes an insightful look at my article and the controversy it’s stirred up. She concludes: “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.”
David Ticoll takes issue with some of my conclusions in the May 29 edition of the Toronto Globe and Mail.
In Australian IT, a Gartner vice president offers a somewhat meandering rebuttal of my article under the melancholy title “Dousing the Embers of Hope.” In response to my suggestion that, when it comes to investing in new information technologies, companies would often be smarter to be followers rather than leaders, he counters with this: “Without those individuals who have courage and conviction to lead the rest of us, where would humankind be?”
Dan Farber provides a useful summary and critique of my argument at ZD Net.
Chad Dickerson calls my article a “must-read” in InfoWorld, saying, “You know what? Carr is right and IT staff should take heed.” He goes on to examine some staffing implications.
On June 2, National Public Radio’s Marketplace featured a lively segment on “IT Doesn’t Matter,” comparing the article to (I’m not kidding) Martin Luther’s 95 Theses. (Requires RealPlayer.)
Another Microsoft executive had a go at the article in a June 2 speech at the Tech.Ed conference in Dallas. “I have access to golf clubs,” he reportedly said, “but I am not Tiger Woods.” And even if he upgrades those clubs every year, he will still not be Tiger Woods.
The CEO of a software vendor cites the article in an eWeek interview. Another eWeek piece, by Lisa Vaas, summarizes the article and reports on reactions to it. “Much of the [article's] premise makes sense to the enterprises that consume technology,” Vaas writes.
Jimmy Guterman asks me three questions in Health-IT World.
The Fortune tech writer David Kirkpatrick squeezes another column out of my article by reporting on the responses he’s received to his earlier column. The most telling quote comes from the CEO of a software company that, Kirkpatrick tells us, “builds sophisticated software for collaboration.” Says this CEO: “We just closed several deals with leading Fortune 100 companies using our software to differentiate their ability to get vast international sales and marketing ecosystems working together to respond faster and more correctly to customers. This is not a ‘me too!’” But if he’s already sold the same system to “several” Fortune 100 companies, one has to wonder how differentiating the technology really is. It’s difficult to purchase competitive advantage from an outside supplier who’s peddling the same “advantage” to your peers.
The lead article in the Financial Times’ special section on IT in the June 4 edition contains a reference to “IT Doesn’t Matter.” The article, “Corporate Computing Tries to Find a New Path,” is well worth reading, though it does require a subscription to FT.com.
Steve Ballmer weighs in in a memo to Microsoft employees.
The Harvard Business School features two excerpts of my article on its Working Knowledge site.
The Guardian (London) features an evenhanded review of my article and responses to it in its June 12 edition.
The Harvard Business Review has released a 17-page compilation of letters about “IT Doesn’t Matter.” It’s a free download.
Mike Langberg discusses my article in a column in the June 16 San Jose Mercury News. He calls the article “thought-provoking and well worth reading” and examines Oracle’s proposed takeover of PeopleSoft in light of my argument.
George Colony, CEO of Forrester Research, uses the felicitous image of CIOs stomping on icebergs in arguing that while the bulk of IT no longer matters, a little bit still does.
Scott Leibs offers an interesting take on my article in the Summer edition of CFO magazine’s IT supplement.
In the June 16 Information Week, Jeffrey Kaplan pens a perceptive article on how the tech business may change as IT commoditization continues. It opens with a reference to my article: “[Carr's 'IT Doesn't Matter'] sent shockwaves through the technology world as vendors and consultants scampered to refute his suggestion that commoditization had made technology irrelevant. Noticeably silent in this debate have been business executives who grew tired and impatient with technology long ago. While they haven’t spoken out, their changing buying behavior says loud and clear that Carr’s arguments are more on target than the IT industry is willing to believe.”
The June 23 New York Times has a third article by Steve Lohr examining the prospects for the IT industry, again featuring an extensive discussion of my article and the reaction to it. The article also appears in the Tuscaloosa News.
Val Souza, editor of India’s Express Computer, discusses “IT Doesn’t Matter” in the June 23 issue.
Mohan Babu uses my article as a jumping off point to discuss IT professionals’ career strategies as IT becomes a commodity.
Paul Andrews writes on my article in the June 23 Seattle Times, noting, “Even as their words reject Carr’s thesis, industry leaders’ actions seem to be proving him out.”
A Fortune article on the prospects for Silicon Valley mentions my article. “The seeds to the next boom,” it says, hopefully mixing metaphors, “are being sown now.”
Baseline features some comments from me in an article on CIO pay.
Fortune’s tech writer David Kirkpatrick once again misreads my argument at the end of a sentimental column comparing Larry Ellison and Steve Jobs (two executives leading very different companies competing in very different markets with very different strategies).
Calling “IT Doesn’t Matter” “the rhetorical equivalent of a 50-megaton smart bomb,” Mark Anderson examines the reaction from Canada in a long piece in the June 26 Ottawa Citizen.
Cisco Systems has issued a response to my article by its CIO, Brad Boston. He claims that “IT is becoming a more powerful tool for gaining competitive advantage, not less so.” But he also admits that “Wal-Mart, Amazon, eBay, and other great companies didn’t succeed because their information technology was better than others. Their vision was.”
A thread on Slashdot discusses “IT Doesn’t Matter,” with one poster writing of the article: “It makes a number of points that I think most of us on Slashdot wish were more widely understood. I think most of us here want IT to be recognized as critical infrastructure. This is where conservative arguments in favor of open source, standardization, interoperability, and security really start to come together. It’s a field for pragmatic professionals, rather than the uncritical promotion of gee-whiz product features.”
It’s Monday (July 7), and that means a new round of stories in Computerworld, eWeek, and Information Week. The Computerworld piece, titled “IT Does So Matter!,” features comments by Rob Austin, Andrew McAfee, Paul Strassman, and Tom DeMarco. Strassman at one point says: “Right now only the CFO can go to jail. My hope is for the CIO of the future to be also eligible to go to jail.”
Microsoft’s Paul Flessner discusses “IT Doesn’t Matter” in a CNET interview. He says: “It’s just silly to think that there’s no competitive advantage to be made in IT. It’s insanity in my mind.”
Steve Steinke, editor in chief of Network Magazine, surveys reactions to my article in his column in the latest issue. “There are a handful of thoughtful comments,” he writes, “but I saw no sign of telling rebuttal from any of the detractors.” He concludes: “The article doesn’t say that IT spending ought necessarily decline, that high performing IT organizations aren’t necessary for competing successfully, or that it’s impossible to gain competitive advantage with IT. Some commentators apparently read these things into it, but the real argument is harder to attack successfully. I find the overall piece, if not the title, to be fundamentally persuasive and not simply provocative.”
John Taschek also offers a strong defense of my argument in the July 14 eWeek. He writes: “I’ll bet that plenty of the article’s critics have not read it. Industry partisans who have read it but can’t accept much of it as true are either awash in denial or so obsessed with self-preservation that they’re blinded to facts.”
CNET makes a passing reference to my article in a piece on Google.
The powers-that-be at Microsoft continue to chew on “IT Doesn’t Matter.” At the company’s July 24 financial analysts meeting, Steve Ballmer said, “Our fundamental response to that is: hogwash. We look out there like kids in a candy store saying what a great world we live in,” while Bill Gates put it this way: “We disagree with all of this. We fully acknowledge theharsh realities . . . [but] there are solutions to every one of those things.”
Michael Schrage lambastes my argument in the August issue of CIO Magazine, although it appears that he failed to read beyond the first couple of pages of my article. Schrage claims that I say that “the quality of management matters far less than the quantity of the commodity,” but that, of course, is exactly the opposite of what I say. Indeed, by the end of his piece, Schrage ends up circling around to confirm my essential thesis. I assume this is, by the way, the same Michael Schrage who recently wrote that in many markets “information has become so plentiful that it has become commoditized and marginalized” and who also recently said that “there is no correlation at all between innovation and profitability. Anybody who thinks there’s a correlation between innovation and profitability doesn’t understand innovation and doesn’t understand profitability.”
Robert Weisman examines my article and the “bitter response” to it from some in the IT industry in an article in the August 3 Boston Sunday Globe.
In the August 4 Wall Street Journal, Lee Gomes mentions “IT Doesn’t Matter” in a perceptive article (requires subscription) on the recent mini-boom in tech stocks. Writes Gomes: “Many captains of the tech industry criticized the HBR piece, describing it almost as an affront to the very idea of human progress. Many common folks in Silicon Valley, however, have become comfortable with the idea that technology has entered a mature, slow-growing phase. Their attitude is like that of a gifted child who is forever being pressured into excelling, but who wants nothing more than to be ordinary.” (Reprinted in the Contra Costa Times.)
Business Week features an extended interview with me in its August 18-25 special issue on The Future of Technology. “IT Doesn’t Matter” is also discussed in several other articles in the issue. It’s a good issue, even if all the usual suspects say the usual things.
Carly Fiorina says I’m “dead wrong” in her keynote speech at HP World on August 12. More interesting, though, is her blunt attack on Dell and IBM: “Dell is low cost but with low technology . . . IBM—they are high-tech but they are also high cost . . . IBM [provides] fairly mediocre total customer experience.” It’s interesting how the CEOs of top business IT providers have begun to publicly slam their competitors. It’s turning into the kind of mud fight you get in commodity businesses.
Samy Mosimann discusses my article in the Swiss journal IBcom.
Industry Week’s September 1 issue has a column on “IT Doesn’t Matter.”
Erin Joyce writes on my article and the controversy surrounding it in Internet News.
Isaac Cheifetz says “IT still matters” in an article originally appearing in the Minneapolis Star Tribune.
James Morris, dean of the School of Computer Science at Carnegie Mellon, chimes in an article in the Sept. 7 Pittsburgh Post-Gazette.
Also on Sept. 7, Jeff May mentions my article in a piece on the tech industry’s crisis of confidence in the New Orleans Times-Picayune.
Lou Bertin discusses my “incendiary” article in the Sept. 8 Information Week. It’s “the vision thing,” he contends.
Although there has been a great deal of reaction to my article from IT managers and the IT industry, there have been relatively few public comments from business managers. It’s particularly noteworthy, therefore, to see Tony Comper, the chairman and CEO of BMO Financial Group, one of the largest North American financial services companies, discuss my article and the current IT landscape in a wide-ranging and often eloquent speech at the IBM Global Financial Services Forum on Sept. 8 in San Francisco. At one point, he addresses my much-debated contention that “IT’s power is outstripping most businesses’ needs.” Here’s what Comper says: “Let’s think about that for a moment. I’d hazard an educated guess that the vast majority of the two main end-users in my organization – customers and employees – actually utilize about 20 per cent of their computing capabilities (and I’m being generous here). The rest of the investment is mostly wasted. . . . This leads to a greater truth about IT in 2003, which is that like most A-list organizations, BMO Financial Group has just about all the basic technologies we need to successfully compete right now.” Highly-recommended reading for anyone interested in the general manager’s viewpoint.
Also in San Francisco, Intel’s Craig Barrett again responds to my article in remarks at the Oracle World conference on Sept. 10. He talks broadly about IT’s ability to provide business benefits (which no one debates) while sidestepping the issue of whether those benefits can form the basis for a competitive advantage or whether, as I argue, they become rapidly shared by all companies. Apparently, he also rode around the stage in a Ford concept car.
Peter Hind writes a concise summary of my argument and the counterarguments in the Sept. 9 edition of CIO Australia.
My debate with Scott McNealy and Bill Gurley, moderated by Stewart Alsop, at the SunNetwork conference on Sept. 18 can be viewed at Sun’s site (scroll down). The discussion was covered by the San Francisco Chronicle, San Jose Mercury News, and InfoWorld.
“If you read one thing this year, make it Carr’s article.” So counsels the Global IT Services Report in its July issue (print only).
Information Week mentions “IT Doesn’t Matter” in an article on IT budgets in its Sept. 22 issue.
General Electric CEO Jeffrey Immelt appears to have touched on my article in a Sept. 25 speech at MIT, terming “stupid” the idea that now that “everyone has information technology it is a waste of money.” I actually agree with him about that. Although companies have wasted a great deal of money on IT, continued investment in IT will remain a competitive necessity even if it doesn’t provide a competitive advantage. The key now, as I explain in the article, is to make sure that the future investment isn’t wasted.
Meanwhile, in Europe, Pedro Navarro discusses my article in Actualidad Economica, a leading Spanish business journal; Pierre Lombard offers a contrary view in France’s JDNet; Billy McInnes supports my argument in Ireland’s Business World; Jorge Nascimento Rodrigues looks at both sides of the issue in a piece for a Portuguese business site; Serdar Turan examines my article in Turkey’s Infomag; and the Holland Management Review features my article in its September-October issue.
Gary Flood examines my article and the reaction to it in a Sept. 29 piece in Accountancy Age. Rebutting the “knee-jerk” responses of some critics, he says “a reading of the nine-page piece shows careful research, effective marshalling of figures, convincing use of historical parallels and a refreshing sense of ‘emperor’s new clothes’ truth-telling.”
Dan Farber offers a smart and balanced take on the “IT Doesn’t Matter” debate in a Sept. 30 article at ZDNet. Highly recommended.
Jack McCredie, CIO of the University of California at Berkeley, says that “at least in higher education, IT certainly matters.”
I’m quoted at the end of Dean Takahashi’s Oct. 3 San Jose Mercury News article on Merrill Lynch’s criticism of Sun Microsystems.
Believe it or not, an entire book has now been written in response to my eight-page article.
In a long and notably lucid essay in the Australian edition of CIO magazine, Tim Mendham corrects some of the mischaracterizations of my argument and provides an incisive reading of the reactions to it. Toward the end of the piece, he writes, “There is an element of fanaticism and over-protectiveness in some of the responses, particularly as so many seem to indicate clearly either they have not read the article or they did not understand it. There are reasoned responses that do not rely on knee-jerk defensiveness, anti-outsider prejudice or self-serving position-selling, but these all tend to come back to the same “it’s the way that you use it” argument: it’s all about strategy and people, which are, of course, technology-reliant but should not be technology-driven.”
Kevin Francis, CEO of CenterBeam, examines my article and the state of corporate IT in an October 28 article on CNet. He concludes: “F. Scott Fitzgerald wrote, ‘The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.’ As we watch the mentally vapor-locked IT pundits continue to splutter and fume and blast Carr’s article, it’s painfully clear they are unable to pass Fitzgerald’s test.”
Forrester’s Jean-Pierre Garbani mentions “IT Doesn’t Matter” in an October 30 interview on SearchNetworking.com.
An article on the Taiwan server market mentions my article in the October 31 Taipei Times.
My article is discussed in an article on IT planning in higher education in the November 1 issue of Syllabus.
“What Does IT Mean?” asks Greg Neilson in an article at CertCities.com that examines the implications of my ideas for IT professionals.
A trio of Accenture consultants mention my article in a piece on IT misspending at CIO.com.
“Has IT Run Out of Big Ideas?,” a November 11 article on IT innovation in the Australian edition of CIO, discusses my article.
An article in Federal Computer Week describes a panel discussion on IT in the public sector, which I participated in.
W. Brian Arthur cites my work in an essay on the broad economic implications of the new IT infrastructure in the November 10 issue of Fortune (requires subscription).
Rich Karlgaard discusses “IT Doesn’t Matter” in a column on CIOs in the November 24 issue of Forbes.
James Champy, the erstwhile reengineering guru, gives his take on “IT Doesn’t Matter” in the December issue of Fast Company.
Dean Takahashi discusses “IT Doesn’t Matter” in a review of Clayton Christensen’s new book in the November 16 San Jose Mercury News.
My ideas are featured in “Twilight of the PC Era?,” Steven Levy’s cover story in the November 24 issue of Newsweek. Levy also moderated a panel discussion on the same subject at Comdex, which featured author Edward Tenner, Microsoft executive Jeff Raikes, IBM marketer Deepak Advani, and me. Stories on the panel ran on InfoWorld and ZDNet. Levy and I also discussed the issue in a segment on Newsweek’s radio program on November 16.
Here’s a new discussion thread on the article at Slashdot.
Colin Boag writes on “IT Doesn’t Matter” at vnunet.com. He notes that “support, maintenance and upgrades are the biggest problems faced by many businesses.”
Kevin McKean, editorial director of InfoWorld, says IT’s glory days still lie ahead.
The Los Angeles Times features an article on my “bold, Olympian pronouncement” (aw shucks) in its November 28 issue.
Looking back on the past year, ADT Magazine says that “Nicholas Carr’s critique, “IT Doesn’t Matter,” in the May issue of the Harvard Business Review was perhaps the most talked about happening in 2003. More important than the criticism from the corporate IT and IT supplier world, the most important result was the debate Carr started. You and your suppliers have been forced to explain what you do, why you do it and why it’s vital to your organizations. And that’s a good thing.”
Singaporean CIO Teo Chin Seng draws on my article in providing a thoughtful account of the current IT environment in the December cover story of the Asian edition of CIO.
Northwestern University economist Robert J. Gordon cites “IT Doesn’t Matter” in “Five Puzzles in the Behavior of Productivity, Investment, and Innovation” (pdf download).
The Red Herring refers to “IT Doesn’t Matter” in an article about the ongoing trend to keep tight control of IT costs. The article predicts that “companies will invest in cheaper, fast-commoditizing technologies like open-source software, blade servers, and voice-over-IP (VoIP), in addition to outsourcing functions that others can do more efficiently.”
Information Age lists the publication of “IT Doesn’t Matter” as one of the key events in IT in 2003.
ZDNet cites “IT Doesn’t Matter” in an article on Oracle’s bid for PeopleSoft.
Over at MidrangeServer.com, editor Timothy Prickett Morgan writes an insightful commentary on my article for the newsletter The Four Hundred.
For those keeping score, Network World has named me the 28th most important person in networking, just after HP’s Nora Denzel and just before SCO’s Darl McBride.
In “IT Does Matter,” an article in the European Business Forum, IT professor Enrique Dans stands atop his ivory tower andpokes at demons.
The November/December 2003 issue of Educause Review, a journal on IT in education, is devoted in large measure to commentary on my article. It also includes the full text of my article.
The always-interesting Paul Murphy comments on my article in a January 15 piece at LinuxInsider.
Andrew Wahl discusses “IT Doesn’t Matter” in “Techies Now Cogs in Corporate Machine,” an article in the January 19 issue of the Toronto Star.
Also on January 19, John Seely Brown and John Hagel examine “IT Doesn’t Matter” in a Financial Times article on thecommoditization of IT and its implications for business strategy.
Former FBI CIO Darwin John mentions “IT Doesn’t Matter” in a provocative article about the role of the CIO in the January 1 issue of CIO Insight. John argues that the CIO’s job has become too much for any one person to handle; he suggests companies establish an Office of the CIO.
The February issue of American Airlines’ American Way magazine names me as one of 10 people to watch in 2004, saying of “IT Doesn’t Matter”: “Carr’s bombshell – denounced by the likes of Bill Gates, Intel’s Craig Barrett, and, of course, the ever-pugnacious Scott McNealy of Sun Microsystems – is still being cussed and discussed by the geekerati. Now, Carr’s legion of critics is bracing for his book-length salvo due out this year. Just don’t look for any latte-stoked book-signing parties at Microsoft headquarters.”
Computerworld reports on a panel discussion I participated in at a Feb. 10 CFO conference in New York.
The February issue of Australia’s MIS magazine features an article on and interview with me entitled The Reluctant Anti-Hero. The author notes: “For an industry nurtured in the ego-stroking and phenomenally successful nineties, it took a lone journalist – albeit an influential one – to reveal how sensitive the IT contingent has become about its strategic position in the world.”
Two texts from Michael Porter, the book Competitive Strategy and the article What Is Strategy?, are essential for understanding the relationships among industry structure, firm strategy, and competitive advantage. A third Porter book,Competitive Advantage, has a seminal chapter on technology and strategy. An extremely lucid overview of the current state of thinking about business strategy can be found in Richard Whittington’s What Is Strategy – and Does It Matter?
To explore the effects of earlier tehnological revolutions on business, see Alfred Chandler’s classics The Visible Hand andScale and Scope. A more recent, and extremely interesting, book is Carlota Perez’s Technological Revolutions and Financial Capital. For a lively account of the commercial and social impact of the telegraph, see Tom Standage’s The Victorian Internet. Martin Campbell-Kelly provides a comprehensive history of software in From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry. Steve Lohr’s Go To provides an enjoyable and illuminating account of key developments in software and the people behind them. Paul Ceruzzi’s History of Modern Computing provides an excellent overview.
Porter’s article Strategy and the Internet diagnoses the failures of e-strategy. Carl Shapiro and Hal Varian take a cold look at the economics of digital business in Information Rules. For a solid, practical overview of corporate information management today, consider Jon Piot and John Baschab’s weighty The Executive’s Guide to Information Technology.
Page 41, column 2:
The Bureau of Economic Analysis data on IT capital spending have been reported widely; see, e.g., page A1-7 of this report.
Worldwide annual IT spending figure is from a Gartner study.
Page 43, column 1:
Plumb, Burdict and Barnard is discussed in Schurr et al., Electricity in the American Economy (Greenwood Press, 1990), p. 27 (note that company name is misspelled in this book).
Rail, steamship, and telegraph growth figures are from Hobsbawm, The Age of Capital (Vintage, 1996). Electrical power figures are from DuBoff, Electric Power in American Manufacturing, 1889-1958 (Arno Press, 1979), p. 43.
Page 44, sidebar:
Deflation figure from Hobsbawn, op. cit.
Landes quote is from The Unbound Prometheus (Cambridge, 1969), pp 240-1.
Page 45, column 1:
MIPS figures are from Progressive Policy Institute’s Technology Project.
Computational power of microprocessor figure is from Delong, Macroeconomic Implications of the ‘New Economy’; Internet figures are from Zakon’s Internet Timeline; Business Week quote is from “The Fiber-Optic Glut in a New Light” in 8/31/01 issue.
Pages 45 and 46:
AHS case draws from a series of Harvard Business School case studies, particularly “Baxter International: OnCall as Soon as Possible,” HBS Case #9-195-103, and “American Hospital Supply Corporation: The ASAP System,” HBS Case #9-186-005, as well as “Seizing the Electronic Information Advantage” from Business Marketing’s January 1988 issue and “A Cure for Hospital Woes” from Information Week’s 9/9/91 issue.
Bill Joy quote is from Titans Still Gather at Davos, Shorn of Profits and Bravado in New York Times 1/27/03 edition.
Page 48, column 3:
PC sales figure comes from various sources such as IDC and Dataquest; see, e.g., this article.
Page 49, column 1:
Data storage’s share of spending is from Why Squirrels Manage Storage Better Than You Do in the April 2002 issue ofDarwin.
Computerworld figure is from Five Cost-Cutting Strategies for Data Storage in 10/21/02 issue.
Alinean figures were provided to me by Alinean. Forrester study was widely reported; see, e.g., this article.
Ellison quote is from this interview.