Cloud Mea Culpa: Nick Carr Was Right and I Was Wrong

Nick Carr was right and I was wrong. Sort of, anyway.

I confess to having roughed up Nick Carr quite a bit (in print, of course) over the past couple of years. I thought he was plain wrong in his book Does IT Matter? His argument there could be summed up as the spread of IT throughout the economy makes it impossible for any company to achieve competitive advantage through IT; therefore, companies should settle for a commodity IT perspective, spending no more than the minimum necessary to perform basic functionality.

I feel that his characterization of competitive advantage is a straw man; he seems to imply competitive advantage is a permanent advantage, immune to attack by other market participants. Information technology, just like every other form of competitive advantage, is subject to erosion over time, whether through mimicry by competitors or being supplanted by newer, better forms of competitive advantage. Moreover, with the spread of IT throughout the economy, IT is more important to companies, not less, since it infuses whatever a company puts forth as its competitive advantage. To take an example, certain high-end hotel chains emphasize their personal service, remembering that you like early am wakeup calls, or always want to use a particular limousine service, etc. Those chains don't depend upon individual staff to remember those details; they use IT to support the service offering-behind every smiling staff member who seems to know what you want before you do stands a sophisticated database system which stores information on every guest, carefully graded by frequency of visit, typical spend patterns, etc, etc. So one could argue that IT isn't their competitive advantage; on the other hand, one could argue that IT is fundamental to their competitive advantage.

Therefore, I felt Carr was well off the mark with that book.

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