An Exercise in Utility

We may be wired, but we're a long way from simply flipping a switch.


“All analogies are false.” So intoned a history professor of mine, usually just before or after making an analogy. Analogies are extremely useful, even when, as creative-thinking expert Edward de Bono has noted, they don’t quite fit, because they provoke fresh ways of thinking about problems.

One analogy receiving particular scrutiny at the moment is the notion of the information utility. As computers become cheaper, more standardized, and more connected via the Internet (the thinking goes), information processing and data communications will become, to steal a phrase from writer Nicholas G. Carr, “commodity factor[s] of production.” In an article in the May issue of Harvard Business Review provocatively titled “IT Doesn’t Matter,” Carr draws numerous parallels between the evolution of the IT industry and the development of electric power, the rail system, the telegraph, and other services that we now label utilities.

Some technology companies are actively pushing the same vision. IBM, Hewlett-Packard, and others, for example, now talk about making computing services available via a grid of interconnected machines that can be harnessed as needed. Software, aided by a set of standards dubbed Web services, may evolve toward a subscription model at both the business and consumer levels; Microsoft’s newest licensing terms are clearly designed around that vision. From “plug-and-play” to “apps on tap,” there have and continue to be a vast number of efforts to simplify technology, allowing those who use it to focus on what they want to do rather than how they must do it.

Even if IT were as easy to tap as electric current, Carr does not believe, despite the title of his article, that IT doesn’t matter. His real argument, which is difficult to refute, is that information technology is quickly becoming a commodity, and as such, it should be managed not as a source of strategic advantage but as a potential liability.

Systems need to be kept up, and costs need to be kept low. While it will (and has) become almost impossible to develop any applications that provide competitive differentiation, it will be all too easy to spend too much on technology, or to suffer a security breach or systems failure that proves costly.

IT as a utility? Would that it were so. Companies may be spending less, consolidating on a select group of vendors, embracing standards, and relying more on the Internet each day. But they will nonetheless be laying much of their own track and managing the various sources of their digital power for years to come. Yet in their strategic vision and management practices, companies can and should begin to regard IT as a utility. Such a view will drive smart decisions, and prove that a faulty analogy can be supremely useful.

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