IT as a Service and cloud computing is often described as disruptive (examples here and here), a paradigm shift (examples here and here) or some other term with similarly deteriorating meaning. However, beyond the buzz words, I guess one can make out a consensus around IT as a Service potentially having an impact on how enterprises use IT and on the IT industry. At the moment, cloud computing is technologically diverse and legally uncertain, but from a strategic point of view it is quite straight forward to see the implications and broad strokes of the future trajectory.
In essence, IT as a Service boils down to :
- Commoditization
- Vertical integration and disintegration
At first, these two might seem to mean the same thing and they are surely interconnected, but it is a mistake to think they are interchangeable. In this case, the technology itself implies vertical integration and disintegration (moving computing resources into the cloud), and commoditization is in part a result of that. Nicholas Carr have very convincingly described the commoditization of computing through cloud computing and the similarities it bears to developments a century ago. However, computing resources becoming a commodity triggers further rearranging of the value chain, which makes it practical to separate commoditization and vertical integration (and disintegration).
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