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Provocateur predicts 'end of corporate computing'





nylenz
Nicholas Carr, the former Harvard Business Review editor who agitated the information technology industry with his article "IT Doesn't Matter," has published a sequel that predicts another, even more disruptive change.

"The history of the commercial application of IT has been characterized by astounding leaps, but nothing that has come before--not even the introduction of the personal computer or the opening of the Internet--will match the upheaval that lies just over the horizon," Carr predicts in a summary of his next work, "The End of Corporate Computing." The article appears in the spring 2005 issue of the MIT Sloan Management Review.

Carr's previous work made the case not that computing technology was unimportant, but that it's no longer a route for one company to gain competitive advantages over others. Carr riled many in the computing industry; Intel Chief Executive Craig Barrett was among those to deride the position.

This time around, Carr argues most companies will stop messing with information technology altogether, instead tapping into the resources of gigantic centralized computing utilities.

"Information technology is undergoing an inexorable shift from being an asset that companies own--in the form of computers, software and myriad related components--to being a service that they purchase from utility providers," Carr argues. "IT's shift from an in-house capital asset to a centralized utility service will overturn strategic and operating assumptions, alter industrial economics, upset markets and pose daunting challenges to every user and vendor."

Carr's latest position jibes better with prevailing computing industry thinking.

Many computing companies are embracing the idea of utility computing in varying degrees. In particular, Sun Microsystems rents out the use of its own grid of computers for calculation tasks; in the future, Sun expects chiefly to supply plumbing to business partners that actually sell the service to the ultimate customers.

Sun Chief Executive Scott McNealy said the shift is slow in coming, though.

"They don't seem to have any problem buying electricity on that basis, but when it comes to computers, they freak," McNealy said this week at a product launch. "It's more of an anthropological issue than a technological or business model issue."
quex
nylenz wrote:
Carr's previous work made the case not that computing technology was unimportant, but that it's no longer a route for one company to gain competitive advantages over others. Carr riled many in the computing industry; Intel Chief Executive Craig Barrett was among those to deride the position.


I agree as far as it applies to global corporations. At a local level, however, you can still get a huge hand up over your competition by having a website or selling products online. So many small businesses neglect even simple computational mainstays like databases of their clients and communication via email... those who make a good site and do just a little IT quickly take the top positions for local goods and services.

Quote:
This time around, Carr argues most companies will stop messing with information technology altogether, instead tapping into the resources of gigantic centralized computing utilities.


I agree. And if "computing utilities" in Carr's mind still involves human data-crunching, I think he could stand to go a step further. We will eventually, though millions of programmers and terabytes of database analysis, come to have algorithms that handle everything but invention of new products. Optimum marketing, based on analysis of ALL the information, will soon provide a system that knows in New York city, in August, Product X will sell best to women when made of leather in Pantone color 1234, in stores that are open between the hours of 8am to 7pm, when placed at a height of three meters from the ground on a white shelf.... AND will automatically order and ship the appropriate product to be there in time.
ocalhoun
quex wrote:
Optimum marketing, based on analysis of ALL the information, will soon provide a system that knows in New York city, in August, Product X will sell best to women when made of leather in Pantone color 1234, in stores that are open between the hours of 8am to 7pm, when placed at a height of three meters from the ground on a white shelf.... AND will automatically order and ship the appropriate product to be there in time.


I think we're not nearly there yet... In order for software to predict human psychology, the programmers need to understand it... and although marketing has become quite a science, it isn't up to being able to make predictions like that without outside input just yet.

And, if the program is made without a full understanding of psychology... then you've just got the good old 'garbage in, garbage out.'
menino
I think Carr's prediction is true, as I'm currently in that market, and I think businesses will move from their own IT infrastructure to outsourced IT, and it has already started the transition altogether, especially a lot of big companies.
The only problem I see with outsourced IT, is that the data is with another company, and can be used or sold to another competitor, but I don't think that will happen, with proper security in place.
deanhills
menino wrote:
I think Carr's prediction is true, as I'm currently in that market, and I think businesses will move from their own IT infrastructure to outsourced IT, and it has already started the transition altogether, especially a lot of big companies.
The only problem I see with outsourced IT, is that the data is with another company, and can be used or sold to another competitor, but I don't think that will happen, with proper security in place.
How about greater potential for hacking the company's accounts? Sounds pretty scary to me as Internet Security is already challenging as it is.
quex
ocalhoun wrote:
quex wrote:
Optimum marketing, based on analysis of ALL the information, will soon provide a system that knows in New York city, in August, Product X will sell best to women when made of leather in Pantone color 1234, in stores that are open between the hours of 8am to 7pm, when placed at a height of three meters from the ground on a white shelf.... AND will automatically order and ship the appropriate product to be there in time.


I think we're not nearly there yet... In order for software to predict human psychology, the programmers need to understand it... and although marketing has become quite a science, it isn't up to being able to make predictions like that without outside input just yet.

And, if the program is made without a full understanding of psychology... then you've just got the good old 'garbage in, garbage out.'


All agreed... but there are a few simple psychological straightaways that marketing has already learned to exploit to great effect. Really basic stuff that plays on human instinct, I mean, like the use of specific colors in packaging, light placement, scents, sound in advertisements... these hundreds of little parlor tricks can compound into a powerful matrix when developing products for select markets. I imagine that it will not take much longer before social media and the willingness of the consumer to provide direct feedback (times millions of consumers) results in a programmable matrix that can spit out optimum decisions beyond the design stage, going as far as shipments, display, and other factors.

...which is creepy. ._.
menino
deanhills wrote:
menino wrote:
The only problem I see with outsourced IT, is that the data is with another company, and can be used or sold to another competitor, but I don't think that will happen, with proper security in place.
How about greater potential for hacking the company's accounts? Sounds pretty scary to me as Internet Security is already challenging as it is.


With cloud computing the provider has to ensure data security from hackers / viruses / malicious intent etc, including data loss.

If a company can afford the security, then its in its best interest to do so, but with the flailing economies, it makes sense to invest in the cloud and ensure data / information security, and moreover to try and reduce costs.

In my view, its tougher to hack the cloud (unless proper security measures are not in place), than hack accounts within a private company (if its on the internet).

In my view though...... anything can be hacked.

But from my point of view of being an administrator for Cloud services in the middle east, I do get to see private emails. Mind you, I do not go looking to read these emails, but part of my job is to filter suspicious messages which are held as spam on the spam server, and also check emails for connectivity diagnostics, for which I have to access the customer accounts.
Therefore unless there is an agreement between a company and cloud services provider, I think perhaps that the cloud services will more opted for than today's IT infrastructure, especially for small to medium sized businesses.
deanhills
Wow Menino! I was unaware you're in the UAE as well. After all of this time. Cool

I'd say this is definitely applicable here in the UAE as BlackBerry messages seem to be monitored too. I just don't know how they do that. And of course large Government organizations would have their own IT Departments that would do something similar to what you are doing. Must say it sounds scary, but VERY logical.
Very Happy
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