Nicholas Carr: IT Departments Face Extinction

The author of the provocative “Does IT Matter?” strikes again with a new book suggesting a radical reevaluation of IT’s future.
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The idea that every company needs its own IT department is dying, opines Nicholas Carr. Instead of maintaining in-house data centers, companies will tap into the processing power of remote mega-computing facilities, much as they now tap into electricity from centralized utility plants.

As he theorizes in his new book, The Big Switch: Rewiring the World, from Edison to Google, this radical shift is greatly needed:

"The replication of tens of thousands of independent data centers, all using similar hardware, running similar software, and employing similar kinds of workers, has imposed severe economic penalties on the economy," he writes. This duplication “has led to the overbuilding of IT assets in every sector of the economy, dampening the productivity gains that can spring from computer automation."

nicholas carr, does IT matter?

Nicholas Carr

The traditional IT department is a dinosaur awaiting news of its own extinction, in Carr’s view. And when the change comes the landscape will look far different. The in-house IT department “will have little left to do once the bulk of business computing shifts out of private data centers and into the cloud,” he writes. “Business units and even individual employees will be able to control the processing of information directly, without the need for legions of technical people."

Naturally, to suggest this type of tectonic change upsets interested parties (including those IT staffers who must contemplate losing their positions). But upsetting the status quo is a specialty of Carr’s. His provocative 2003 Harvard Business Review article, “Does IT Matter?” theorized that the competitive advantage of IT is limited because everyone has access to the same technology. His widely discussed thesis earned him few fans in the boardrooms of tech vendors.

With his new tome fresh on bookshelves, Datamation spoke with Carr about his views on IT’s future, as well as his book’s theories about the Internet’s impact on culture.

Discuss this article in the Datamation discussion forumComment on Nicholas Carr's theories about the future of IT

Q: You draw a portrait of the future in which all computing power resides outside the corporate data center, and we tap into it like we tap into electricity today. If this comes to pass, it will radically reorganize corporate IT. What will some of the effects of this change be?

First of all, it’s important to realize that, for big companies at least, this is going to be a slow transition, playing out over a decade or two. In the interim, what this does is open up new choices for corporate IT departments in that they’ll no longer be constrained by what they can buy and install locally.

I think what it means over time is – at the least – a fairly dramatic shift in the nature of IT departments. Right now, for most corporate IT shops, the majority of workers and the majority of the budget go to building and maintaining their IT internal infrastructure. As that moves out into the supplier community, the utility community, a lot of those jobs are going to move with it, from the corporate data center into the supplier side.

At the same time, one of the big trends that corresponds to what I’m talking about, but also exists separately, is the automation of a lot of IT processes that used to require a lot of manual labor. As that continues as well, certain IT jobs are going to dwindle.

Now ultimately, what becomes of the IT department? I think if you look ahead far enough – 10, 20 years – you can probably assume that, in a lot of companies, what we think of as the IT department will probably not exist anymore.

Q: Because remote computing facilities supply all the processing power?

That’s right. That doesn’t mean that all the jobs and all the skills that today reside in IT departments, things like thinking about information management and information flows, and how software can be used to automate processes, it doesn’t mean those jobs are going to disappear – in fact they might become more important.

But my guess is that, as the IT department shifts away from being a technical resource, those kind of jobs will probably be incorporated into traditional business units and other corporate departments.

Q: Your theory suggests that IT will be a tough profession in the years ahead – employment will be slashed dramatically. There will be some “super workers,” so to speak, but the rank and file will see far fewer jobs.

I think that’s right for some categories of IT workers. Obviously when we talk about IT employment we’re talking about a broad range of jobs. And, if anything, software is going to become more important to the general economy even than it is today. So those kinds of jobs, there may be more of them, but they won’t necessarily reside in IT departments. But the more maintenance-focused jobs, which obviously count for quite a lot of IT employment today, I think we can assume those jobs are going to become fewer rather than greater.

Q: What about, for example, a huge corporation like Johnson & Johnson, a wealthy, highly competitive multinational company. Would a resource-rich company like that be willing to A) allow sensitive information to be processed by a remote computing facility, or B) allow a third party to completely handle its all-important technical infrastructure?

I think it will ultimately. But I think the largest companies are going to be the slowest to make the move to the grid. For smaller companies and mid-size companies, utility computing is a great boon for them. It allows them to catch up and tap into very sophisticated infrastructure without having to buy it themselves.

But larger companies, you’re right, big companies have such economies of scale in their IT operations that until the utility services mature, and build up their own scale, it’s unlikely that you’ll see a big shift in terms of big companies closing down their data centers or whatever.

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