Tuesday, August 02, 2005

The End of Corporate Computing and other Fables

Nicholas Carr is back and at his contrarian best with The End of Corporate Computing in this Spring's MIT Sloan Review*. He posits that Information Technology (IT) is in transition: from an asset owned and hosted by corporations for their own use, to a utility that is supplied centrally by specialized companies. His argument takes the concept of utility computing to its logical extreme, and holds that the corporate data center will go the way of the dodo.

Nick is wonderfully eloquent, and his argumentative skills are admirable. His case would have been very persuasive, had it been based more solidly in reality. As with his earlier article IT Doesn't Matter, he overstates his case here too. Business software often automates complex and firm-specific business processes, and does not easily lend itself to centralization with a utility supplier. It is difficult to imagine a car factory carrying out its manufacturing planning or control thru a subscribed utility, or an investment bank performing securities analysis on a vendor's computer sitting hundreds of miles away. The author's vision may, however be seen as providing a general direction in which computing will evolve.
Summing up, the horse sense view is: It appears far-fetched to state that utility computing will render the conventional model of each firm hosting its own IT applications extinct, or even that it will become the dominant mode of IT use in corporations. Utility computing may gain traction over the next few years for applications that are not highly firm-specific, where business-criticality and security requirements are moderate / low, and where speed of response is not highly material.
* Francis Fukuyama's epochal The End of History seems to have caught everybody's imagination so much that it has spawned an entire genre that is going strong even 15 years on! I remember lapping it up the article as a young, gawky research scholar, and the furore that followed it's publication!