It Doesnt Matter Summary :: Nicholas Carr Article Summary

Electricity, the telephone, the steam engine, the telegraph, the railroad and..IT? In his HBR article, IT Doesnt Matter, Nicholas Carr has stirred up kind of a bit of controversy around ITs role as strategicalal business differentiator. He examines the evolution of IT and argues that it follows a pattern very analogous to that of earlier technologies like railroads and electricity. At the beginning of their evolution, these technologies come throughd opportunities for competitive advantage. However, as they do more and more available as they become ubiquitous they interpret into commodity inputs, and lose their strategic differentiation capabilities. From a strategic viewpoint, they fundamentally become invisible.Carr distinguishes between proprietary technologies and what he calls infrastructural technologies. Proprietary technologies can provide a strategic advantage as long as they last out restricted through physical limitations, intellectual property rights, high monetary value or a lack of standards, but once those restrictions are lifted, the strategic advantage is lost. In contrast, infrastructural technologies provide far greater value when shared. Although an infrastructural engine room might appear proprietary in the early stages of buildout, at long last the characteristics and economic science of infrastructural engine room necessitate that they leave behind be broadly shared and will become a part of the broader business infrastructure. To illustrate his point, Carr uses the example of a proprietary railroad. It is possible that a company might gain a competitive advantage by build lines only to their suppliers, but eventually this benefit would be trivial compared to the broader good realized by building a railway network. The same is true for IT - no company right away would gain a cost-effective competitive advantage by dwindling its focus and implementing an Internet only between their suppliers to the exclusion of the rest of the world. To bring forward shore up his IT as commodity theory, Carr cites the fact that major technology vendors, such as Microsoft and IBM, are positioning themselves as IT utilities, companies that control the provision of business applications over the grid. Couple this IT-as-utility trend with the rapidly decreasing cost of processing power, data storage and transmission, and even the most cutting-edge IT capabilities readily become available to all. Although IT may seem too diverse to be compared to commodities such as electricity and the railroads, Carr points out three specific characteristics that take on rapid commoditization IT is a transport mechanism IT is highly replicable and IT is subject to rapid price deflation.