There are seemingly countless theories about how the Web has changed the dynamics of the IT industry, but here is one of my favourites: for the first time in the industry's history, people are buying computers based on what other IT buyers are doing. IT product vendors, although hardly irrelevant, clearly are no longer in charge.
Allow me to explain what this means and why it matters. Today, most of us care much more about what is happening at our favourite Web sites than about anything going on at Intel, Microsoft or Netscape. How often do we think about the latest Pentium chip or browser, or what's new about Windows 98? By contrast, every day there's something new on the Web that could be of immediate use to us. (Whether we can find it or not is, of course, another question.)This might seem obvious, but in fact the IT industry has never worked this way. Before the Internet, we all bought computers based on what either we or our organisations wanted to do with them. What other organisations did with computers didn't directly affect us.
Today, however, customer IT activity is the most compelling link in the IT supplier value chain. In other words, what Web retailers, publishers, educators and entertainers are doing is the main reason many people are now buying computers. Businesses such as Amazon.com and Yahoo entice people to get on the Internet and then drive the traffic that drives further investments in IT infrastructure. In the PC era, whether I used my PC or not essentially had no effect on the value of PCs to you.
This is more than just semantics; it's really a new phase of the industry's evolution. Telephone communication is the only other business I can think of where my use of a product directly creates value for other people using that very same product. For example, how Citibank uses airplanes, clothing, cars or copiers has no effect on how its customers use those products. But how Citibank uses the World Wide Web creates real value for its Web-oriented customers.
Most important, the idea of users creating value for other users isn't just a consumer phenomenon. The same pattern of mutual benefits is found in just about all extranet, electronic data interchange, supply-chain management and other cooperative business systems. Stated simply: what your customers, suppliers and partners are doing with IT is likely to have much more effect on your IT strategy than anything coming from your chosen set of IT suppliers.
The overall effect is that innovation in IT hardware and software is now much less important than innovation in specific, network-based services. This represents real industry progress. Services exist in virtually limitless variety and typically provide tangible customer value. These attributes will both expand and stabilise our industry.
They also explain why the whole issue of IT return on investment is fading away. It is fundamentally easier to assess the value of specific services provided directly to customers than it is to determine the ROI for the internal use of generic IT products.
The bottom line is that computers are now used to create value for those who use computers. It's this mutually reinforcing dynamic that makes it all but certain that our industry will continue to move ahead -- but with customers now clearly in the lead.
Moschella is an author, independent consultant and weekly columnist for Computerworld. His Internet address is [email protected].
