News Feature

Interview | Nicholas Carr - The Argument Over IT

May 01, 2004 — CIO — About a year ago, the Harvard Business Review published an article titled "IT Doesn’t Matter." It ignited a vehement and often acrimonious debate over the value of information technology. Since then, Nicholas Carr, the author of the article, has expanded on his original thesis that while IT’s value will increase as it becomes more standardized and ubiquitous, "the ability of any one company to use IT in a distinctive way to gain competitive advantage will diminish until...it will make more sense to manage IT as a commodity input?something that is absolutely necessary but [that] isn’t going to set you apart from competitors."

Carr has faced off with detractors in print and onstage, and this month sees the publication of his new book, Does IT Matter? the title of which suggests Carr may have backed off his original position a bit. (He hasn’t.) Carr spoke recently with CIO Editor in Chief Abbie Lundberg to explore his conclusions and the assumptions underlying them, one of which is that all information technology is "infrastructure." (See "The Engine that Drives Success" on Page 36 for author Don Tapscott’s response to Carr.)

CIO: Most people distinguish between infrastructure technologies and the applications that ride on them. You seem not to make that distinction.
Nicholas Carr: Over time, what we call infrastructure has expanded to incorporate much more of the hardware, everything from PCs to mainframes, and much more of the software, from fairly esoteric utility software that’s been incorporated into operating systems through various application packages as well. I don’t think that process is over. More and more of the IT that companies use will, over time, become viewed as infrastructure. And what isn’t infrastructure continues to shrink and is meaningful to a smaller and smaller set of companies as a way to differentiate themselves.

So if you think of all of IT as a pie, what proportion of the pie falls into the infrastructure segment?
For most companies, you may as well think of it as 100 percent infrastructure and base your approach to IT management on that assumption. Ultimately, you’d want to just manage it as infrastructure, by which I mean a shared set of standardized hardware and software that is fairly homogenous across companies.

I agree with you that the greatest value from IT will come once the infrastructure is standardized, secure, reliable, interoperable, transparent. Where we differ is that I believe once we have that, there will be a lot of opportunity for differentiation and new types of business activities that are IT-enabled. Take Google’s search algorithms, which it has developed in a specialized, proprietary way on top of the common platform of the Internet to gain a unique advantage, which it has, in fact, been able to sustain.