Information Utility
When electricity first came to industry, most companies built and operated their own power plants. They did so for two reasons: 1) Public infrastructure wasn’t mature enough to meet their needs reliably. 2) They could use electricity to get a leg up on the competition.
Over time, of course, companies gave up their own power plants in favor of public power. Public power became reliable, ubiquitous, and cheap. Every company had easy access to it and there was no simple way to gain a competitive advantage. Power became a background factor rather than a competitive factor.
Fifty years ago, most large companies operated their own printing presses. Then they realized that the printing industry was highly efficient and very cost effective. By eliminating their internal printing operations, companies could reduce costs while improving quality, flexibility, and service.
If it happened to electricity and printing, could it also happen to information technology? IT is becoming cheaper, more reliable and more ubiquitous. Is there any reason to keep it in house any longer?
Information visionaries foresee an age where information processing power is so cheap that it’s effectively free. Companies would be silly to pay money for something they can reliably get for next-to-nothing.
The counter-argument is that information is fundamentally different from power or printing. Electricity is undifferentiated – all companies need the same thing. Information, on the other hand, is highly differentiated. Each company needs something different. It’s self-defeating to put your information on a “common carrier” where anyone could conceivably find it, retrieve it, and use it against you.
It’s an interesting debate and – so far – a largely academic one. But that’s about to change. In January, Nicholas Carr will publish a new book entitled, The Big Switch, in which he will argue that IT is about to go through the same transition that power did a century ago. Carr is the author of Does IT Matter?
- Information Technology and the Corrosion of Competitive Advantage. Given the controversy surrounding his last book, it’s likely that his next one will also be hotly debated. The debate will move from academia to business where real decisions will be made.
As the debate heats up, the Opinionizer will keep you posted. Look for the book in January and send us your opinions. In the meantime, the Opinionizer is going to take a holiday until 7 January. Happy New Year.
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