I’ve been reading Nicholas Carr’s latest book The Big Switch. I enjoy his penchant for business history and find that he makes some very interesting arguments about where technology is heading. So far The Big Switch is an expansion on his previous work IT Doesn’t Matter, which made him a notorious killjoy in the IT community. His central thesis is that, over time, information technology becomes commoditized and the competitive advantage of technology among competing firms will eventually be eroded to insignificance. He cites as an example the history of electricity. Companies that first harnessed electricity had to produce it themselves – if you had it, it was a significant advantage over your competitors. Eventually electricity was mass produced, economies of scale saw its price drop and it became cheap and readily available to all. He argues that the internet is doing the same thing to computing power now. At first only those who could build computer hardware, develop computer software, or maintain computer networks themselves had a major advantage, and with the internet this is no longer the case.
Carr’s analogy has a point, and the proliferation of cloud computing is an example of his idea in action. But the existence of readily available computer power, like cheap electricity, may facilitate business innovation but by no means ensures it. A business is more than the sum of its parts. Just because I have cheap and plentiful electricity doesn’t mean I can build a Toyota factory any more than having cheap and plentiful computer power means I can build an Amazon website. You still need suppliers, distributors, financiers, workers and the like, and you need to know how they all fit together.
Thomas Redman, in his book Data Driven, describes how data is the one company asset that no one else can replicate (short of actually stealing it). Your competitors can buy the same computer systems or services, hire away your employees, buy from your suppliers, sell to your customers, but no where can they fully replicate your distinct business intelligence. He describes meta-data as data about how your various business assets fit or work together and argues this is what defines your enterprise. In this sense, data and information technology is more than raw computing horsepower. It is about the whole business and as long as this is so, it will always be part art and part science.