May 14, 2013, 8:47 PM —
Image credit: flickr/SandyFleishmann
Nick Carr rocked the tech world with his controversial essay in the May 2003 issue of the Harvard Business Review, titled "IT Doesn't Matter." Carr claimed companies were overspending on IT and that the competitive advantage to be gained by tech investments was shrinking as technology became more commoditized and accessible to everyone. On the 10-year anniversary of the article's publication, Carr talked with Network World's Ann Bednarz about what he got right, what he got wrong, and how the piece remains relevant today.
"IT Doesn't Matter" is 10 years old. How do you think the ideas have held up?
The article was really about the IT infrastructure, which is basically what IT departments were mainly concerned with 10, 11 years ago. I think that has become fairly uninteresting from a strategic point of view. Back then, IT companies tried to sell the latest server model as the key to strategic advantage -- you need to be on the cutting edge of infrastructure or your business is going to be overwhelmed by competitors. At that level, the idea that the basic technology was going to be neutralized as a competitive differentiator has basically panned out.
Although it's very briefly mentioned in the article, as I remember, there was a prediction that a lot of this stuff is going to become a utility, and I think that's what is happening with the cloud.
One of your conclusions was that IT management would become boring, it would be about managing costs and risks. Do you think that's the case?
Yes and no. In the context of the IT world that existed 10 years ago, I think that has become true, that it really is about risk management and costs and not about getting the latest stuff and getting a big competitive advantage because we have a new server. On other hand, there have been all sorts of other developments that you have to figure out -- your cloud strategy, social media, marketing, apps. So from another point of view, I think I probably understated the new things that IT departments would have to grapple with. Some of those things aren't necessarily located within IT departments anymore. They're as much about marketing departments and other things. But I don't think I expressed the full range of what was to come, and what was to influence what IT departments would do. I was mainly focused on the state that they were in back then.
When you think about the backlash, what were people most upset about?
The biggest backlash came from IT companies. Steve Ballmer called it hogwash, Carly Fiorina dissed it. All the vendors were really up in arms. That's because -- and this was one of my intents -- the article went right after what was the essential marketing message that vendors were using then. Which is: You need to be on the cutting edge or you're going to get left behind. You need to spend big money on the latest hardware and software. And I said well, no, you don't. And that was upsetting to them.
On the part of CIOs in IT departments, I think the reaction was much more mixed. Some of them really took offense at the article, but others said, "Yeah, I can see a lot of sense here. This is kind of where we're heading, this is what I'm trying to do." And so there was a great divergence of reactions among CIOs, IT departments and other corporate managers.
Was the backlash more or less than you expected?
It was definitely more. I knew I was writing something that was provocative and that went against the grain of a lot of the rhetoric that was out there about information technology and business. But the reaction went way beyond what I expected. The article came out right at the beginning of May, and I remember the immediate Sunday afterwards, Steve Lohr picked up on it and wrote a big story that mentioned the article in the Sunday New York Times, in the front of the business section. That also galvanized attention.
Back then, the article was only available to subscribers. What might it have been like if it were widely available on the Internet?
Back then, if the world had been like it is now, I think it would have gone viral, but I think it would have been forgotten very quickly, which is true of a lot of things that go viral today. I think it would have made a big splash immediately, but I'm not sure it would have had the kind of long-lasting impact that it had in coming out in print in the Harvard Business Review. It was a different world. A lot of people's awareness of the article came not through the article itself, because they didn't have immediate access to it, but though the coverage elsewhere.
How did the article change your career?
It completely changed it. Based on the reaction to the article, I got a contract from Harvard Business School Press, which was a separate operation but a sister company to Harvard Business Review, to expand it into a book, "Does IT Matter?", which came out a year later in 2004. I left HBR and figured I'd take a year to write the book, then find some other editing job at a magazine, but there was so much interest in the article, I started getting speaking engagements, and other writing opportunities, and suddenly it became possible for me to be a freelance writer. I've been on my own ever since. One book led to another. So it really completely changed my career, it's fair to say.
In some ways it doesn't seem like a 10-year-old piece. Many of the ideas you wrote about are issues that companies today are still grappling with.
Some of the details are outdated, of course. But in some ways what I think I did that hadn't been done before, or at least hadn't been done as clearly as I set it out, was to put the question of IT firmly into the broader question of business strategy. My argument was that this isn't really about hardware or software, it's not really about technology, it's about broader issues of strategy. I think that question is always there. That's one of the reasons it's had legs, I think.
The other reason that I think it's had legs is that I've been told the article served as an inspiration to a lot of entrepreneurs who got interested in cloud-based businesses for corporations. The whole cloud movement, which was at least a little bit predicted by the article, has also been a reason that it continues to be meaningful to people, since we're still obviously working through that transition.
How far along are we on the path to the cloud? Are companies making progress?
This also happens to be the fifth anniversary of my book "The Big Switch," which was about cloud computing. And in that book, I said that I thought we were talking about a 20-year transition. I think that's probably still true. If we're five years into that, there's still more than a decade to go.
If you look at IT, the bulk of investment these days, certainly on the vendor side, is on cloud systems and applications. On the other hand, if you look at corporate spending, cloud is still a fairly small percentage of overall spending, even though it's growing quickly. So we're still kind of between two eras. A lot of corporate IT spending and attention still has to be devoted to proprietary databases and in-house systems. It's going to take a long time to make that transition. I think we're still at the beginning of that shift.
As IT makes that transition, what skills are most important?
My focus for the last five years has shifted more toward the cultural and social implications of computers, so I haven't been focused strongly on trends in IT. I do think that IT ultimately is going to be a smaller department in terms of headcount, but the successful IT departments and IT managers will play a more strategic and kind of consultative role -- thinking about marketing implications of apps and social media and things like that. I think the emphasis is still going to be on being the bridge between technological possibilities and business goals, and less about optimizing the technology itself. That's a trend that has been going on for some time now and I think will continue.
The 2003 essay advocated being more of technology follower than a leader. Do you think that's still the right approach for most businesses, to not be on the cutting edge?
Well, I was writing in the context of what IT's core responsibilities were 10 years ago, when it was very much about purchasing and managing infrastructure and enterprise applications. So in those terms, yes, very much so. I don't particularly think you'd want to install on-premises some cutting-edge CRM system, supposing a vendor offered such a thing anymore. You'd want to go the utility route. The idea of being on the cutting edge and being an in-house innovator at that level of IT is gone, pretty much.
Then again, there are other areas, particularly on the marketing side, such as, "How do we connect with consumers shopping through smartphones?" I think there are new areas that involve IT where being an innovator may well pay off.
What are you working on today?
I'm working on a new book. If all goes well I'll have a manuscript done by end of the year, and it will be out next year, maybe. I'm not talking about what it's about yet, but it's another examination of technology and its human effects. It will be a bit more about business, I think, than my last book, "The Shallows," was. Not the IT side of things, but more about talent and people and how they do their jobs.
Do people still ask about your older work?
Yes. One thing I've noticed is that a lot of colleges in introductory IT classes will use "IT Doesn't Matter" as the first thing students read to get them talking about bigger issues of how IT fits into a company. A lot of people I meet, that's still what they know me for. They might have been 10 years old 10 years ago, but they've just read it.
When you read the article, a lot of the content is relevant today and doesn't seem a decade old, but some sections immediately seem dated. One that stands out is the mention of Sun Microsystems, which isn't around anymore.
In many ways Sun, in their marketing messages and in their rhetoric, was the kind of company that was closest to the idea that I was talking about. And yet, they provide a case study about what happens when you're too early with a message. The network is the computer, thin clients ... they were just too early. And they had some execution problems.
Thanks for taking a trip down memory lane and revisiting the article 10 years later. Any last comments?
In talking about 10 years ago, the article was very much in my mind influenced by the dot-com collapse. There had been so much hype -- the only thing that matters is IT, it's going to take over everything. So the dot-com collapse was one of the reasons that I started thinking about the implications for this within companies, and within IT departments. The hype in the dot-com world in some ways echoed what was going on inside companies. It was a reaction to that.
Read more about infrastructure management in Network World's Infrastructure Management section.