Tuesday, April 8, 2008

IT Leaders Must Prepare for the Industrialization of IT

Many organizations are failing to exploit falling prices in products and services that should accompany the commoditization of IT, according to Gartner, Inc. In 2007, 25 percent of IT spending was on unnecessary and redundant customization and although this will decline, it will remain at least at 10 percent overspending through 2010.

The need to move ever faster and at a lower cost is driving a shift from ‘integration’ activities toward greater interoperability and interchangeability with the direct result that many IT product and services markets are becoming commoditized. Gartner likened this ‘industrialization of IT’ to the two earlier industrial revolutions (of mechanization and electrification) calling it the third industrial revolution: that of digital business in the cloud.

For most organizations, the shift from buying and building IT to accessing IT as a service is not new, but the trend is set to accelerate as traditional delivery models are augmented by a range of new, alternative delivery models that rely on a combination of technology and business advances to delineate and define the extent of the service. Increasingly, these are being used both internally and externally to deliver scalable IT software and hardware functions. These alternative delivery models often make irrelevant the governing principles that worked with the traditional models.

At the same time, the giants of the software and services industries are building the facilities to deliver these services. They are building the capacity for mass production: platforms for industrialization. These new mega data centers will form part of the new "mass production" capabilities companies need for IT.

To deliver these applications in a readily configurable and customizable manner, with the promised advantage of scale, will require Web platforms. In a Web platform ecosystem, a service provider uses the facilities of a Web platform provider to build, host or deliver the service. At a minimum, the service provider will use hosting services of the Web platform and may use additional platform services (compute, storage, security, application management, ecosystem management, information, component, application and business process) to build and deliver its services.

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