May 9, 2005 (Computerworld) --
In the spring issue of the MIT Sloan Management Review, Nicholas G. Carr continues his controversial writings about the future of IT. His ideas have been vilified and embraced, but no one has called them boring. This time, he told Computerworld that the corporate IT department is an idea whose time has almost gone.
You call your article "The End of Corporate Computing." Why? Up till now, it's been assumed that companies have to own the basic assets involved in computing. I think we're moving to a time when that assumption will be overturned and those assets will begin moving from within companies to more centralized utility suppliers. It's a shift similar to what we saw 100 years ago, when all manufacturers maintained their own electric generators to power machinery. Over 20 or 30 years, they shut down those generators and began to buy electricity from utilities. Just as today we wouldn't talk in terms of corporate electricity generation, I think tomorrow we won't talk in terms of corporate computing.
There has been lots of discussion over the past few years about utility computing. What's different about your take on it? I try to look at the economics of business computing as opposed to the technology of utility computing itself. I argue that up till now, a lot of the utility computing discussion looked at isolated instances of hosted applications, like Salesforce.com or one company hosting another's Web sites. It's easy to believe this is a fragmented phenomenon that will have a bunch of companies providing a limited number of outsourced services. I believe it's a much bigger wave of change in that today's entire model of business computing is built around fragmentation of basic assets -- everyone having to buy what, in many cases, is similar equipment and software. All that stuff will ultimately be centralized outside companies, and that will lead to much greater efficiency that will translate into lower costs and greater reliability for users.
Nicholas G. Carr
Assuming you're right, this is more of a gradual evolution than a "sky is falling" event, right? Absolutely. We're not going to wake up tomorrow and get all our computing requirements through a socket in the wall. It will take a couple of decades for this to roll out. It's a matter of utility suppliers slowly building up enough scale and enough expertise that they can replace ever larger internal data centers. It tends to start with smaller companies that find it difficult to buy and maintain their own systems. Those are the first ones to move to a utility model. As the utility model gains greater efficiency, it will
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