Ten years ago, Nick Carr said IT doesn't matter -- sort of.
The jarring headline of Carr's May 2003 article, "IT Doesn't Matter," is what many people remember, and it tends to overshadow his more thought-provoking thesis: that companies have overestimated the strategic value of IT, which is becoming ubiquitous and therefore diminishing as a source of competitive differentiation.
"The opportunities for gaining IT-based advantages are already dwindling," Carr wrote in the Harvard Business Review article. "Best practices are now quickly built into software or otherwise replicated. And as for IT-spurred industry transformations, most of the ones that are going to happen have likely already happened or are in the process of happening."
Carr advocated spending less on IT, both to reduce costs and to decrease the risk of buying soon-to-be obsolete equipment and applications. He also predicted the rise of utility-like computing: "The arrival of the Internet has accelerated the commoditization of IT by providing a perfect delivery channel for generic applications. More and more, companies will fulfill their IT requirements simply by purchasing fee-based 'Web services' from third parties -- similar to the way they currently buy electric power or telecommunications services."
The article ignited an industry firestorm. It wasn't shared on Facebook, it didn't trend on Twitter and it wasn't voted up on Reddit -- none of those sites existed at the time. The article went viral the old school way: It was passed around the office, written about by other publications and discussed on IT news forums such as Slashdot.
Carr spoke with Network World this month about his inspiration for the article, the backlash, and the article's unexpected longevity. (Read the full Q&A here) LINK TO Q&A
"I knew I was writing something that was provocative and that went against the grain of a lot of the rhetoric that was out there about information technology and business. But the reaction went way beyond what I expected," Carr says.
His editor agrees. "He, I, and we (all of us at HBR) knew that it would be controversial," said Tom Stewart, former editor of Harvard Business Review, in an email to Network World. "We also suspected that it might be misinterpreted as being a Luddite's argument for typewriters rather than a nuanced argument that IT was strategically important not for itself but for what it enabled one to do, just as (using the analogy Nick used) electricity was more important for what people did with it than for the fact that it spawned a utilities industry."
"Our suspicion proved well-grounded: Nick was attacked as much for what he did not say as for what he said -- maybe more," said Stewart, who today is chief marketing and knowledge officer at Booz & Company.
IT suppliers were the most upset, Carr recalls, since he essentially was telling corporate leaders to ignore vendor hype and to stop overspending on IT.
"The biggest backlash came from IT companies. Steve Ballmer called it hogwash, Carly Fiorina dissed it. All the vendors were really up in arms," Carr says.
In the trenches, CIOs and IT executives had more mixed reactions. "Some of them really took offense at the article, but others said, 'Yeah, I can see a lot of sense here. This is kind of where we're heading, this is what I'm trying to do,'" Carr says.
Andi Mann, a former industry analyst and longtime enterprise technologist, saw that dichotomy among the IT executives he worked with. Some IT pros, threatened by the thought of losing control, wanted to prove Carr wrong to their CEOs and maintain the status quo. Others saw Carr's essay as a wake-up call.
"One group was trying to maintain their legacy and trying to stop the momentum of change, of innovation, of enabling rather than controlling the business," Mann says. "The other group was saying to me, 'I think this guy's onto something, and I want to be the innovative CIO, I want to be the CIO who actually uses this technology.' Both groups were interested in trying to prove Nick Carr wrong, but for different reasons and in different ways."
Making a career of it
"IT Doesn't Matter" turned out to be a career-defining missive for Carr, who followed it up with multiple books (including 2004's "Does IT Matter?" and 2008's "The Big Switch") speaking engagements, and another ire-raising essay titled "The End of Corporate Computing."
Looking back on the 10-year-old HBR essay, Carr says he got some parts right and some parts wrong.
"Back then, IT companies tried to sell the latest server model as the key to strategic advantage -- you need to be on the cutting-edge of infrastructure or your business is going to be overwhelmed by competitors. At that level, the idea that the basic technology was going to be neutralized as a competitive differentiator has basically panned out," Carr says.
On the other hand, IT pros have new challenges to address, such as cloud strategy, mobility and social media. "From another point of view, I think I probably understated the new things that IT departments would have to grapple with. I don't think I expressed the full range of what was to come," he says.
Industry watchers agree -- to varying degrees.
"He didn't look into the future. He looked at the present state and saw a lethargic, slow, controlling, almost domineering department of IT," says Mann, who today is vice president of strategic solutions at CA. "He got it right: IT needed to be fundamentally different. But he also got it hideously wrong."
Suggesting that IT doesn't matter, that it's commoditized, and that cloud providers can do the job of IT fundamentally underestimated the value that IT brings to businesses, Mann says. "Nick Carr is a provocateur and author rather than a technologist, and I don't think he understood what IT does when it does it well."
More on the same page as Carr was analyst David Tapper, vice president of outsourcing and offshore services at research firm IDC, who says he fundamentally agreed with Carr's article.
"I think he got people to start to think about it, to say, 'Let's step back from what we do and ask: Where is this all going, folks?' He was right. I think he needed to modify it a little bit, but he struck the right chords," Tapper says.
To Tapper, one distinction Carr should have made is to specify who will care about IT in the future: "I think he should have said, 'To whom should IT matter?' Because it won't matter to the consumer, it will matter to the suppliers and the service providers," Tapper says. "The service providers are the ones that are going to buy all this stuff, they're going to integrate it and operate it." To everyone else, technology is just a tool to do their jobs, something that's taken for granted, according to Tapper. "Do I wake up in the morning thinking about my telephone or the boiler in my house? No. Only when there's a problem. Otherwise I never give it a second thought."
Tapper agreed with Carr's prediction that IT would move to a utility model. "Once the masses of the world need something, it always becomes a utility. There are no exceptions," Tapper says. "It's the only way you can deliver it. And technology is now something we can't live without."
March to the cloud
Ten years after the HBR article, companies still have a long way to go on the path to cloud computing.
"If you look at IT, the bulk of investment these days, certainly on the vendor side, is on cloud systems and applications," Carr says. "On the other hand, if you look at corporate spending, cloud is still a fairly small percentage of overall spending, even though it's growing quickly. So we're still kind of between two eras."
Tapper agrees. "Companies are in the stages of restructuring their IT departments and trying to form them around cloud categories, such as platform as a service. They're outsourcing or procuring different clouds. They're trying to get it under control. It's a bit out of control now -- one company had 30 Amazon contracts and didn't know about them."
Back when "IT Doesn't Matter" was published, the idea of utility-like computing was relatively new in the trenches of enterprise IT. But Mann saw some IT leaders accept the implicit challenge and begin laying the groundwork for cloud computing because of Carr's article.
"There were a couple of organizations that specifically started talking to me about virtualizing everything, automating everything, implementing chargebacks and things like that. That was the start of a number of my clients' journeys to the cloud," Mann says.
The fact that it's still being talked about suggests Carr made some valid points.
"If Nick had just merely [been] a provocateur/bomb-thrower/iconoclast -- i.e., had he been wrong -- then the article would have been a 9 days' wonder, not something you'd like to write about on its 10th anniversary," Stewart said.
At the very least, the article left a lasting impression. "It's still a bit of a raw nerve for a lot of people," Mann says.
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