Tuftin Jay o. Stacy Proposal Rewrite (4) 11-4-05 Unbundling IT: Examining critical elements that will revolutionize the way we perceive and use Information Technology For a technology to reach its maximum potential it must first become standardized. Standardization addresses two primary concerns by increasing economies of scale and decreasing barriers to entry. But before significant levels of standardization are possible a technology must be broken-down to its smallest parts and rebuilt using the most efficient and cost effective components. History has proven that the process of standardization is natural over and over again, from the integration of electricity in the work place to the utilization of the railroad. Drawing on these evidentiary examples, comparing the way Information Technology is employed today and evolving to meet demands of tomorrow, this paper will provide evidence that Information Technology has begun an inevitable process of becoming standardized and that only as a result of this standardization can IT realize its highest levels of efficiency and muscle. In order to support this claim this paper will carefully examine and support what I consider to be the paramount issues involving fully realized Information Technology. These issues include: user maturity, which proceeds and lays the groundwork for two additional and critically important factors; incremental vs. quantum implantation and the commoditization of IT services and applications, while this paper will focus primarily on software there are strong correlative motivations influencing the hardware industry as well. The crucial component and motivator toward the standardization of IT will be the ever expanding capability and utilization of Open Source software models. Open Source Software is software whose core programming code is fully available to anyone to read, make changes to, and build new versions of the software incorporating their changes. These software programs are frequently free and often the only requirement to use them is to publish any modifications that are made to the program so that everyone else can benefit from them. Through this communal programming process Open Source will advance the homogeny of IT, proving the means for more services and applications to be engaged regardless of the hardware that is running them. In order for this phenomenon to occur traditional proprietary software sold by companies such as Microsoft will be replaced with Open Source software programs. What makes Open Source software different and powerful, as compare to traditional proprietary products, is that anyone who chooses to use it has the ability to modify how it works to best suit their specific personal or business requirements. Further, all code and modifications developed under the licenses governing the use of various Open Source programs must be freely distributed- this means that any and all innovation involving Open Source software’s use is made available to everyone. Today, the affects of Open Source software can be most clearly discussed in terms of how it has shaped the internet and the Web in particular. For instance, when a person enters a website’s name into the address bar on top of their screen Open Source software called Bind which runs DNS (Domain Name Server) automatically converts the numeric address into words so that we can type www.Virginia.edu rather than 184.108.40.206. Other notable examples include, Yahoo.com, the world’s largest Web site, which runs almost entirely on Open Source software. Or how AOL uses the Open Source program Sendmail as its email engine to handle every email distributed throughout its enormous subscriber base. These are just a few examples of how Open Source has gained momentum towards shaping the way Information technology is utilized. This paper will introduce more evidence and further elaborate on these illustrations in order to investigate whether Open Source will become the catalyst to transform IT. One of the more interesting concepts that will be thoroughly developed in this paper will the idea that IT must become commoditized. This notion is perhaps best explained in the book Does IT Matter?, by Nicolas Carr. Carr, former Executive Editor of the Harvard Business Review, theorizes that like electricity, the telegraph, or the railroad Information Technology is a tool that over time needs to “become ordinary- needs to lose its strategic importance as a differentiator of companies- if it is to fulfill its potential.” (Carr, 11) This argument, not surprisingly, has been met with quite a bit of resentment from parts of the IT community. Some, who disagree, posit that the ethereal nature of IT make it inappropriate to compare it to other forms of technology more restricted by the laws of physics. They claim that innovations in the field of IT will protect it from ever being a simple input and that a comparative advantage of one application or service over another can be expected for the long-term. Carr’s rebuttal to this notion is that although innovations will forever take place they will create little real (or long lasting) comparative advantage since competitors will quickly adopt any new innovation proven to reduce cost or increase profit thus actually creating the standardization of IT required to advance its ubiquity. Once IT becomes standardized to a point where Open-Source programs begin to dominate the market traditional giants like Microsoft, Oracle, and IBM will be forced to realign their products and search for the next technological frontier or face the similar outcome as the telegraph. In addition to Carr’s books I have also reviewed an article by Robert J. Gordon (Stanley G. Harris Professor in the Social Sciences, Northwestern University) titled, “Does the “New Economy” Measure up to the Great Innovation of the Past?” published in the Journal of Economic Perspectives, April 2000. In his article Gordon dissects the emergence of his “New Economy” starting with his notion that it began in the mid 1990 when computer’s capabilities grew exponentially while at the same time the cost of computers fell. Gordon uses representative mathematical formulas to calculate the productivity of different generations in order to compare the affects of those generations’ innovations against one other. His conclusion is that while computers and the internet have indeed resulted in new productivity efficiencies in certain aspects of the economy directly associated with the use of this technology overall their affects have been marginalized by the larger part of the economy based on the durable manufacturing sector. (Gorgon, 17) Perhaps most importantly in regards to how his research intersects with my own is his assertion that the “computer revolution does not measure up to the earlier great inventions” (Gordon. 35). I find this particularly interesting because at the time Gordon wrote this the idea of IT ubiquity had not been introduced so Gordon formed his conclusion based on comparing inventions of the past, (Electricity, telephone, etc) which are now commonly accepted commodities, to computers or IT, which he regards as distinct utilities. I believe that it will be useful to expand on Gordon’s work to include Carr’s theories. As an example Gordon declares that there is a point of diminished returns when it comes to investing in IT. To demonstrate this he examines the slow productivity growth in the construction and home maintenance industry, comparing the technology of portable power tools to IT and concluding that like the cordless drill IT can only increase efficiencies to a point before diminished returns are realized. (Gordon, 41) However, applying Carr’s theory I would argue that portable power tools are manufactured by vendors who are attempting to reach the largest market share possible and as a result of this business model their tools have become standardized, (and mainly undifferentiated from their competitors) commodities. The result of this “Vendorization” is to strengthen the overall industry without providing any long lasting comparative advantage to any single manufacture. (Carr, 49) The pertinent discussion when examining the portable power tool’s affect on productivity when using Carr’s theory is to also realize the similarities with the computer, starting with the “operating system” in this case the household 120V electricity that provides power to charge the batteries regardless of the manufacturer, then the peripherals that can largely be interchanged among brands such as drill bits, screwdriver heads, and chucks. Caring this example further, imagine if each manufacture of a cordless drill required the use of proprietary bits, screws, batteries. If this were a reality the efficiencies realized by the use of that cordless drill over a screw driver by any single person may be close to equal but industry wide their would be a huge cost to productivity due to a lack of standardization because workers would not be able to share tools on the jobsite. Also the loss of economies of scale would dramatically drive up the cost of owning and operating the drill which could inhibit some workers from even being able to enjoy the advantage of the power tool to begin with. The same holds true for IT- where Gordon leaves off Carr picks up. I am also using a book written by Howard Smith and Peter Fingar titled, IT Doesn’t Matter: Business Processes Do. In this critical analysis of Carr’s theory Smith and Fingar acknowledge that Carr delivered a wake-up call to the IT industry however, they do not disagree with Carr’s stance that as ubiquity increases strategic importance diminishes but rather take question whether Carr is focusing on the real issues concerning IT. Smith and Fingar disagree with many of Carr’s arguments however, while reading their counterpoints it seems to me that they are more in heated-agreement than actual polarized dispute. Carr’s book was written with sweeping generalizations that he believes will steer the role IT in broad terms. The luxury Smith and Fingar have in rebuttal is sharply focusing on Carr’s expansive theory and refuting generalizations with specific examples. This is a very powerful book providing many very good illustrations of how IT services will continue to provide businesses with greater and more powerful tools as innovations are incorporated into the workplace. It also does an excellent job separating IT services from IT utilization. This separation is exactly where Smith and Finger miss Carr’s point. Commoditization of IT according to Carr provides for a level playing field however, he never implies that all players utilizing IT will do so equally. For understanding exactly how Open-Source Software works several books and websites will be used; however, the book Embracing Insanity, by Russell C. Pavlicek, has provided much useful information regarding licensing legalities and software protocols. Most importantly to this project however, Pavlicek’s book deals directly with the other two paradigms of fully developed IT- user-maturity and incremental versus quantum implementation. Utilizing these three books as a the primary basis of this project’s thesis question I will provide a straight forward, point-by-point roadmap of not only how but why Open Source Software will successfully standardize the desktop computer and in turn revolutionize the way businesses employ IT services. The proposed structure will look something like this- Part I will provide a general examination of the evolution of the desktop pc and IT in the workplace. Included in this section will be an introduction to the notion of the productivity paradox and begin to develop the idea of commoditization by relating previous technologies evolutions (electricity, telegraph, beta vs. VHS, Apple vs. PC) how through standardization technology reaches it greatest efficiency and productivity. Part II will introduce open-source software explaining its history, applications, and requirements. Part III will discuss how open-source software intersects with and promotes Commoditization of IT services and Applications (extensive examination of Carr’s theory) Part IV will explain how open-source software intersects with and promotes Incremental vs. Quantum implantation (a million programmers versus Microsoft staff, no more reloading of new proprietary programs, apache) Part V will explain how open-source software intersects with and promotes User Maturity (as users become more involved and invested in the services they utilize they will become better administrators of IT and more savvy users demanding smarter not glitzier IT services that solve real demands) Part VI will bring together all concepts in order to support notion that Open-source software will standardize desktop PC’s and therefore revolutionize how business employ IT. I begin this project having gained extensive knowledge of the Information Technology field from an advanced user standpoint through job related activities and responsibilities. This experience provides me the basis to learn the more technical issues addressed in the project and incorporate them such that that they are easily understood by all audiences. In addition to my own capabilities I will be relying heavily on the real world experience provided my mentor, a Professor at the University of Virginia; Peter Miller, who has significant experience as both an business consultant and professor of Information Technology dealing with many of the issues addressed in this project. Further, to substantiate claims made in this paper the audience will be provided a tangible demonstration of the capabilities of Open Source software as they exist today and will be left with an appreciation of the possibilities for tomorrow. Bibliography: Carr, Nicolas G. Does IT Matter? - Information Technology and the Corrosion of Competitive Advantage. Boston, MA: Harvard Business School Press, 2004 DiBona, Chris. Open Sources: Voices from the Open Source Revolution. Sebastopol,CA: O’Reilly & Associates, Inc. 1999 Fingar, Peter and Smith, Howard. IT Doesn’t Matter- Business Processes Do: A critical Analysis of Nicholas Carr’s article in the Harvard Business Review. Tampa, FL: Meghan-Kiffer Press, 2003 Gordon, Robert J. “Does the New Economy Measure Up to the Great Inventions of the Past?” Journal of Economic Perspectives 4, no. 14 (Fall 2000) Pavlicek, Russell C. Embracing Insanity- Open Source Software Development. SAMS Publishing, 2000.
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