Has I.T. become a commodity? And if so, is this new state of play beneficial to businesses?
Technologists have been writing about the commoditization of I.T. since Nicholas Carr said that ‘I.T. doesn’t matter’ in 2003. And with the move to the cloud, one I.T. service can look very similar to another.
There is a school of thought that says, to a certain degree, businesses just see I.T. as a product, much like buying milk, therefore all that matters is whether it’s the kind they need or not.
Additionally, I.T. has certainly become commoditised at the component level. For example, there aren’t many server manufacturers of any scale anymore, because they’ve all been commoditized.
In this context, it is possible that I.T. managed services could be seen as a commodity too, but is this the right approach for companies looking to create business value from I.T.?
Standard offerings like Office 365 could certainly be perceived as a commodity. However, when it comes to a conversation about managed services, requirements are always different. A customer with a trading arm might want support for a business-critical application, in which case they will want high availability and SLAs. Yet a customer looking for an application that only has five users and is only utilized once a month needs a very different managed service.
On the other hand, modern managed services have become less of a commodity than ever before. Indeed, managed services are moving more towards outcome-based SLAs, which by their very definition are industry-oriented and thus highly individualized.
As soon as a managed service agreement begins, it has to morph to meet the needs of the business. Thus, the provider must add innovation to their managed service to successfully deliver the business outcomes required.
Businesses who are not exploiting I.T. commoditization are missing out on cost savings and efficiency benefits. They should use productized building blocks to consolidate core infrastructure. Every business faces a unique set of challenges hence customization and integration – the layers that sit above the building blocks – require a specialized approach. These are the layers where innovation occurs and where new ways of working can be pioneered.
This is the foundation of what is called the New Economics of I.T. On one hand, it is about using the commoditized building blocks of I.T. to reduce the cost and complexity of core I.T. systems. But on another, it is also about using innovative technologies and approaches to create real business value and market differentiation.
Are you looking to create quantifiable value from your company’s I.T. infrastructure? Contact Aileron I.T. and we will call you back shortly to answer any of your questions.