Does your enterprise have a director of electricity? Perhaps a CSO – Chief Sewage Officer? A Natural Gas Manager? I would doubt it. Such services represent managed public utilities which might be accomplished in vast economies of scale offering low unit, agency, and transaction costs to many consumers. Low costs of production are forwarded to consumers as affordable structural operating expenses. For many firms, to contemplate a business plan that capitalizes on generating their unique electrical, sewage, or, gas systems seems ridiculously variable, cost prohibitive, and redundant.
Now, imagine if I were to suggest this is actually the future of IT? Isn’t IT infrastructure?
Imagine IT being a mass utility instead of an internal cost center reinventing the wheel at higher costs than could be provided like a public infrastructure. Small to mid-range businesses would most likely find that the expenses of managing an in-house IT function would far exceed its value. Thus, an organisation without tremendous competitive involvement in technical capability – a core competency in technology, disaster recovery, innovation, or legacy support – establishing and looking after an IT function may be a competitive distraction.
That’s right: IT to be a utility could offer less risk, more structured expenditures, and every one of the competitive advantages needed to stay relevant out there.
Consider the trends:
Centralized Network Storage and Hosting. Why not allow a 2nd party to deal with all secondary and tertiary storage constraints? If the results are needed everywhere along with the risk of confidentiality, integrity, and availability excessive, why don’t you outsource the full data center in an expert party doing the work for others?
WiFi Max. A wireless, 30-mile, 75 mbps solution that might provide a relatively mediocre onramp on the information superhighway (when compared with 802.11n), yet, regardless, a significant onramp offered for no more by municipalities or corporate sponsors.
Maintenance Outsourcing. Cost containment strategy through Service Level Agreements (SLA’s) and competitive bidding, allowing a tiny to midrange firm for taking advantage of comparable advantages found outside their domestic boundaries.
Subscription-based Licensing/Open Source. The distinctions between licensed and open software are starting to blur. Historical problems of usability, functions, the simplicity data integration between applications, and ubiquity boils software down to a software application, too. Salesforce.com, Netsuite.com, or eBay.com are just as much utilities because air conditioning: no barrier to entry, immediate use, scaled licensing, and contained risk – BANG! IT like a utility offers instant ERP and CRM. Just add water.
Today, the tiny to mid-range company is confronted with many options that make an effort to in-source the IT function. Today, more progressive IT strategists have blended in-sourcing and outsourcing where it made both competitive and financial sense. This approach balances risk, lowers barriers to entry, gains immediate competitive capability, possesses cost.
However, tomorrow, we could possibly be looking at a rapidly imploding IT market in the tiny to midrange business category where competitive IT services, support, and capability undoubtedly are a part of the public commons. On the one hand, this really is going to be a transformative competitive expertise in an information-based economy. Yet, in contrast, skill-set diversification to the IT professional could even be more important. What will happen should the skill-based value you provide today is tomorrow’s white noise? Whether or not you manage an interior IT shop or else you are concerned about your own competitive relevance, you probably should start thinking about how a services you provide exceeds the need for a common utility.