What Commodity IT? Google Buys Strategic Engineering, Wal-Mart Too
Nick Carr is apparently feeling very confident that he got his forthcoming “The Big Switch” right.
In the last four days alone, as he pitches preorders of his soon to be follow-up best seller to “IT Doesn’t Matter,” Carr shares with the world at his blog that he knows “precisely what the future of personal computing looks like,” i.e. the Apple-Google product roadmap, and he offers up a Wal-Mart IT fueled ”I told you so,” plus a New York Times pay wall spurred “so there” to counter would be critics and non-believers.
1) The Carr ‘Jobs-Schmidt’ crystal ball: So how long before the first Google-Apple Cloud computer appears? I would say it’s months, not years. Robert X. Cringley rebutted Carr’s “simple” fortune telling and I refute Google’s world wide advertiisng domination “fantasy.” SEE: Radio Ads Stall: Google Pins Offline Advertising Hopes On TV
2) Carr riffs off of reporting done by the Financial Times regarding an esoteric academic study of how newspapers’ online editions may cannibalize flagship print publications to counter “whoops and hollers from the members of the Web’s hallelujah chorus” which cheered the demise of the New York Times’ pay wall last month; For his part, Carr declares “setting prices should be a rational act, not an ideological or sentimental one.” I postulated same upon the NYT’s announcement of no more Times Select last month. SEE: NY Times $10 million Free News Bet NOT a Sure Thing
3) “For Wal-Mart, too, IT is a commodity” Carr now declares in defense of his old book:
After I wrote “IT Doesn’t Matter” back in 2003, critics would routinely present Wal-Mart as the killer counter example to my argument that information technology rarely provides a competitive advantage anymore…
Now, with commodity software greatly advanced, Wal-Marts’ custom systems have turned from advantage to disadvantage, and the IT analysts have changed their tune.
Carr deems Wal-Mart to be scrambling to buy packaged software so it is not left in the legacy IT dust:
The company has recently purchased off-the-shelf pricing and business-intelligence software form Oracle and HP, and on Thursday it announced it would install an SAP system for financial management and reporting.
BUT, do (big) buy versus build decisions really signify Wal-Mart has admitted defeat in its strategic deployment of information systems? NO!
SAP is claiming its products help companies “achieve their goals for leadership and growth, resulting in competitive advantage.”
Moreover, by being IT source neutral, Wal-Mart’s technology investment decisions become even more strategic for an even greater ability to create competitive advantage.
Google employs a similar strategic buy-versus-build rationale in its engineering acquisition strategy:
dMarc Broadcasting, YouTube, Writely, JotSpot, GrandCentral, Zenter, Postiini, Zingku, Jaiku…
Google is IT source neutral, big time, buying lots of companies and/or software and/or engineers, as well as recruiting its own in-house rocket-scientists, lots of them.
If Google is cheered for its strategic scoffing at the “not invented here syndrome,” Wal-Mart ought to be as well.
Google even touts how supposedly commodity IT becomes a competitive advantage, when it becomes Googley:
From the beginning, Google’s developers recognized that providing the fastest, most accurate results required a new kind of server setup. Whereas most search engines ran off a handful of large servers tha often slowed under peak loads, Goolge employed linked PCs to quickly finds each query’s answer. The inovation paid off in faster response times, greater scalability and lower costs. It’s an idea that others have since copied, while Google has continued to refine its back-end technology to make it even more efficient.
Bottom line: information technology does matter, and it matters what companies do with it, just ask Google.
BTW: When Google was a Stanford research project, it was nicknamed BackRub because the technology checks backlinks to determine a site’s importance.
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