From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Nicholas Carr is at it again, questioning the strategic value of IT.  Only this time I find myself in nearly total agreement with him.

Carr became famous, or infamous, for his 2003 Harvard Business Review article “IT Doesn’t Matter,” in which he argued that IT is an undifferentiated resource that has little strategic business value.  His thinking has evolved since then, and in his new book, The Big Switch, he proposes that utility computing will increasingly become the corporate information infrastructure of the future.

Utility computing means different things to different people.  Some people draw an analogy to the electrical grid, but Carr argues that the information utility is far richer and more strategic.  He outlined some of his perspective in this Q&A interview in CIO Insight magazine.

Nicholas Carr

The utility computing model that Carr foresees encapsulates many of the hottest concepts in IT today: virtualization, modular computing, software as a service, Web 2.0 and service-oriented architecture.  Computing utilities of the future will be anchored in enormous data centers that deliver vast menus of applications and software components over the Internet. Those programs will be combined and tailored to suit the individual needs of business subscribers.

Management of the computing resource, which for many years has been distributed to individual organizations, will be centralized in a small number of entities that specialize in that discipline.  Users will increasingly take care of their own application development needs and will share their best practices through a rich set of social media tools.

In this scenario, the IT department is transformed and marginalized.  Businesses will no longer need armies of computing specialists because the IT asset will be outsouced. Even software development will migrate to business units as the tools become easier to use.

This perspective is in tune with many of the trends that are emerging today.  Software is a service is the fastest growing segment of the software market and is rapidly moving out of its roots in small and medium businesses to become an accepted framework for corporate applications.  Data centers are becoming virtualized and commoditized. Applications are being segmented into components defined as individual services, which can be combined flexibly at runtime.

There are sound economic justifications for all of these trends, and there’s no reason to believe they won’t continue.  So what does this mean for IT organizations and the people who work in them?

Carr sums up his opinion at the end of the CIO Insight interview: “[I]nformation has always been a critical strategic element of business and probably will be even more so tomorrow. It’s important to underline that the ability to think strategically…will be critically important to companies, probably increasingly important, in the years ahead.”

Taking this idea one step further, you can envision a future in which a pure IT discipline will become unnecessary outside of the small number of vendors that operate computer utilities.  University computer science programs, which have long specialized in teaching purely technical skills, will see those specialties merged into other programs.  Teenagers entering higher education today are already skill at building personal application spaces on Facebook using software modules.  It’s a small step to apply those principles to business applications.

Sometimes, the past is a good predictor of the future. In my next entry, I’ll give an example of how technology change revolutionized the world a century ago and draw some analogies to the coming model of utility computing.