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June 17, 2004 | Has IT become infrastructure? Well, duh. Yes. Try running your office without e-mail for a week. (We did, not voluntarily, and it wasn't pretty.) But is that all IT is?

By now you must know Nicholas Carr's answer to that question. His new book, Does IT Matter?, is a longer, more muted version of his Harvard Business Review article of a year ago, "IT Doesn't Matter."* The latter, of course, got pulses racing (and word processors clicking) in IT industry boardrooms. The resulting flood of outrage on op-ed pages drew mostly a big yawn from giant IT users such as Procter & Gamble and General Motors.

Here's Carr's argument: Like many previous game-changing technologies — Carr cites railroads at length — IT has been widely adopted, slowed its pace of qualitative advance (things other than speeds and feeds), and matured into a must-have utility rather than remaining a provider of competitive advantage. Turning on the lights and turning on a company's computers are practically the same thing.

Grid computing, Carr says, will be the apotheosis of this trend. "Many major IT vendors, including Microsoft, IBM, and Hewlett-Packard, are working feverishly to construct the required software, hoping they'll be able to spur the spread of grid computing and ultimately profit from it. Should they succeed, [it will] mark the final step in the commoditization of computer hardware, rendering all equipment indistinguishable to users." He dispenses of application software in much the same manner.

Does IT Matter?, published by Harvard Business School Press; "IT Doesn't Matter," Harvard Business Review, May 2003.
From the vehemence of IT industry (and some IT press) responses, you'd think Carr had written the Satanic Verses of IT. Is Carr wrong? If he's not, is that so bad? Maybe the real question is, does Carr's book matter?

Sound harsh? Perhaps. But Carr — however imperfectly — is merely retelling what the market has been shouting for a few years. Times have changed for IT. Is there really anyone who has looked at the consolidation in the IT market, the slowing of IT sales growth, the decline of IT profit margins, and who hasn't realized something bad — at least in relative terms for the IT industry — was happening? Microsoft and Sun Microsystems are becoming friends, for crying out loud.

Times have changed. IT has been wildly successful insinuating itself into every aspect of business life, and it will continue to do so. The developing world remains a great market, and selected industries — healthcare is a big one Carr rightly identifies — still have far to go in adopting IT. But much of the IT buildout is done. That includes hardware and most software. For both IT purveyors and IT users, figuring out competitive advantages based solely on the technology is difficult. It always was, but the rush to not be left out of the wiring of the world kept the corporate IT buying engine stoked.

So is the notion true that IT has run its course as a source of competitive advantage, as Carr suggests?
So is the notion true that IT has run its course as a source of competitive advantage, as Carr suggests? Good question. For the kinds of tasks we've come to expect from IT, the answer is probably yes. (Although our e-mail fiasco indicates that getting even this simple task right isn't easy.) Carr also argues that the ubiquity of IT supply means that even for tasks we haven't thought of yet, IT can't deliver persistent, competitive advantage. The genie is out of the bottle, so to speak.

Maybe. But unlike gas, water, and electricity, IT is remarkably malleable. Rather than compare IT to the railroads, better to think of it as the transportation industry, with PCs, servers, and mainframes (and their applications) as cars, boats, and planes. We have no idea what's next. At a minimum, IT will continue knitting together business and society in ways that are familiar and addicting. It's also likely that unexpected surprises are ahead, and who knows what competitive advantages they will bring. The market will tell us.

Carr's book isn't bad. It's often interesting, just not profound. How much you learn depends on how closely you've been watching the IT revolution. * 

For reprints and/or copyright permission, please contact Angela Parsons, 781.972.5467.