IDC Forum: Why IT matters

IT commoditization? Asian threat? Crippling viruses? Speakers at IDC’s European IT Forum 2004 in Paris didn’t have to look far for contentious issues.

In the opening session on Monday two authors, Nicholas Carr (“Does IT Matter”) and Don Tapscott (“The Naked Corporation”), butted heads over whether competitive, economic and technological forces are transforming IT from a strategic resource into a commodity.

Carr believes the trend toward commoditization is here to stay and users should take advantage of it. His thesis: Now that IT has become a commodity – a pervasive infrastructure – any company has access to standard technology and any system can be instantly replicated. Thus any competitive advantage gained from new-system implementation is lost.

“IT will deliver its greatest value when it becomes invisible to users – when it’s taken for granted,” Carr said.

Vendors have “overshot” users by pushing technology to the cutting edge, according to Carr. “Users don’t see advantages in being at the cutting edge,” he said. “They’re resisting the upgrade cycle; they’re searching for lower-cost innovation.”

Tapscott’s counter thesis: Sure, some IT hardware has become a commodity; it’s not scarce. What’s scarce, though, is knowing how to use IT in an innovative manner and gain a competitive edge by doing so. Companies should focus on what they do best and partner to do the rest in “business webs,” taking advantage of new computing and networking systems.

Tapscott is hardly alone in his conviction that IT offers a competitive advantage. Speaking in a round-table discussion, John Schwarz, president and COO of Symantec, said utilities, such as gas, water and electricity, have changed little over the decades and have evolved into commodity infrastructures. “Our industry is changing every day,” he said. “That’s a big difference.”

While admitting that some IT commoditization exists, Leó Apotheker, a board member of German business software vendor SAP AG, said he doubts the entire industry will go down this path. “Some software in the lower stacks, for instance, could become a commodity,” he said. “But never in the higher stacks – there’s too much intellectual power needed there.”

Jean-Philippe Courtois, CEO of Microsoft in the Europe, Middle East and Asia (EMEA) region, said the IT industry is still in its infancy, pointing to the need for sophisticated software to make daily routines, such as meetings, still more effective.

As for the Asian threat, it’s real, warned Symantec’s Schwarz. “The number of engineers in Asia is reaching a level where this region is rapidly gaining a knowledge edge,” he said. “It could someday be very difficult for the (industrialized West) to compete.”

Asia has a growing skills base and highly attractive cost base, according to James Richardson, senior vice president and chief marketing officer at Cisco. China, in particular, is becoming an IT powerhouse. “We must be able to compete against this region in the future,” he said.

Focusing on viruses, Symantec’s Schwarz warned they’ve become nasty and are getting worse, and if users don’t take preemptive measures, they’re in for big trouble.

“A couple of years ago, it took attackers five to six months to penetrate systems through new viruses,” Schwarz said. “Now the average is around six days, and in some cases down to two.”

Most viruses today aren’t being written by school kids or geeks but criminals eager to steal personal data or extort companies, according to Schwarz.

Forty percent of Fortune 500 companies suffer frequent virus attacks. Users should be concerned about the consequences, according to Schwarz.

“Your brand is at stake if your servers are hijacked,” Schwartz told users in the audience. “You need processes and tools to deal with these very serious threats.”