In 2003, Nicholas Carr, then the executive editor of Harvard Business Review, sparked an enormous debate (and enraged quite a few technology vendors) with an HBR article entitled “IT Doesn’t Matter.” Because every company now has access to the same commodity computing hardware and software, Carr asserted, big IT investments no longer confer a competitive advantage, the way they did in the early days of corporate computing.
He reiterated his case (hedging a bit) at book length in 2004’s Does IT Matter? and became a fixture on the technology lecture circuit, polarizing audiences at every stop with his argument that, in the end, it makes little difference whether a company chooses HP or Sun, Oracle or IBM, Windows or Linux: that’s not where companies should be looking for an edge.
Some people read Carr’s original article as saying that information technology itself is unimportant. That’s a misinterpretation that, as Carr admitted in Does IT Matter?, may have been “traceable in some cases to a lack of clarity in defining the terms and scope of my argument,” and he spent much of the book trying to correct it. Indeed, he insisted that the replacement over the last two decades of expensive, customized, proprietary computing systems by a standardized infrastructure was a “natural, necessary, and healthy process” that continues to lift the entire global economy.
If there is any doubt left that Carr believes information technology to be critical to modern society, his latest book—published yesterday—should erase it. The Big Switch: Rewiring the World, from Edison to Google (W.W. Norton) takes a far broader view of the IT landscape. The book draws out the compelling parallels between an earlier technological transformation—electrification and the rise of electric utilities—and the emergence of “utility computing,” the transfer of many of the software and storage tasks once handled by our personal computers and local servers to far-away data centers handling millions of tasks simultaneously. Google’s online spreadsheet, word processing, and calendar software, which competes directly with Microsoft’s desktop productivity programs, is a low-intensity, consumer-oriented example of utility computing, while Salesforce.com’s Web-based account management software for small-to-medium-sized companies is one of the prime “software-as-a-service” offerings giving older business-software companies like Siebel and Oracle fits.
Aimed at general rather than managerial audiences, The Big Switch thoroughly explores both the positive and negative effects of the “computing cloud” that’s settling quickly over consumers and small businesses (and only slightly less rapidly over large corporations). Among the potentially negative effects is what Carr calls “the great unbundling”—the fact that Web technology has removed most of the constraints on the distribution of creative work and made it possible for consumers to obtain content without paying a subscription or even viewing an advertisement. Some of the best creative work, Carr worries, may be “crowded out of the marketplace by the proliferation of free, easily accessible” alternatives.
Carr, who lives outside Boston, visited Xconomy’s office last week to talk with me about his book and its themes. You can read the entire 6,000 word transcript of our conversation here (including fascinating digressions on Lewis Mumford, technological determinism, the future of newspapers and magazines in an era of information commodification, and the value of blogging versus book-writing). For readers with slightly less time to commit, here’s a handy streamlined version.
Xconomy: This book has a slightly different perspective from Does IT Matter?, which looked at whether IT matters on a more fine-grained scale to companies and organizations. And if I can summarize that book, the answer was no, because IT is ubiquitous and therefore there’s no particular competitive advantage to any one company. But now you’re saying that in a much broader sense, IT as a utility, just like electricity, does matter. In fact it makes a huge difference to the way our society is evolving.
Nicholas Carr: I’m taking a completely different perspective, really. The new book could even be called IT Matters, because it’s looking at all the ways that information technology does change things, in what I think are very important ways. The original book was written mainly for a managerial audience, who were thinking “Can I get a competitive advantage from these enterprise systems?,” and my answer there was largely no. This book is written for a much broader audience. And as I said, it really looks at what happens when IT—partially as a result of shifting to the utility model—becomes much cheaper, much more available, much more ubiquitous.
X: So there is a shift in perspective from your last book to this one. But there is also a shift in tone or perspective within the book itself. The first half is largely about the philosophy and logic behind utilities and how they arise, and how that laid the foundation for the amazing industrial growth seen in the U.S. in the 20th century, and for the growth of the middle class and all of the things that spread from that. That’s a hopeful story. Then in the second half of the book you turn the tables and say, “Okay, well, now that we have this stuff, let’s not pretend that it’s totally rosy.” I wonder where you come down
