What is IT, anyway?

Posted by Robert Merrill on September 17, 2008 under Concepts | Be the First to Comment

Here’s what IT is.

I’ll explain later, after commenting on why I posted this to begin with.

In his book The Big Switch, Michael Carr argues that within 10-20 years, IT will become completely commoditized, like electricity. In his review of Carr’s book, titled Big Switch, little experience, James Carlin, columnist for the Wisconsin Technology Network, says,

If you are not using IT strategically, then maybe you should step down as a CEO because you are still living in a 1950s framework of corporate strategy. If your CIO or CTO are not focused on harnessing new capabilities to expand and create new markets using information technology networks and instead, are just looking at how he or she can reduce IT budgets to get their yearly bonus, it is time to replace them.

Depending on how you define Information Technology, they’re both right. Are switches, routers, servers, and storage arrays IT? Certainly! Is the proprietary, custom software that runs the Chicago Mercantile Exchange IT? Sure it is. (Carlini used the CME software in a discussion with Carr).

The term “Information Technology” is too broad. I suggest that we make Mr. Carlini and Mr. Carr both happy (or angry) by dividing IT into two parts, that which can be commoditized and that which can’t.

All businesses have the former. They need an office network with file and print, desktops with the typical productivity applications, connectivity to the Internet, and email. Some businesses stop there. Their competitive advantage has nothing to do with hardware, software, or any of that. For them, Carr is probably right.

But Carr is definitely not right for what I call Software-Intensive Business. As one of my former bosses would say, they’re “up to something” with their Information Technology.

In my own series of WTN articles, starting with That Sinking Software Feeling, I hope to help the executives of Software-Intensive Businesses (SIBs), especially those with no software management experience, provide effective guidance to those programmers they’ve hired.

The next article in the series will be called something like “Software is Different.” It will explain the diagram at the top of this post.