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Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

The ‘second IT revolution’?

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Well, I guess it’s that time of year for reflection and prediction – and while prediction can certainly be mildly dangerous it can of course also be a little fun to reflect back and see how one got on. And so onto the prediction! The term ‘second IT revolution’ has been used a few times already for sure – sometimes used to describe the ubiquitous nature of IT services, or to describe the move towards a kind of ‘cyberinfrastructure’. But from an IT industry perspective I think there’s something perhaps even more fundamental happening – which is highly relevant for business consideration in 2008 – and I think this can be best described as the IT industry’s own ‘second IT revolution’. The first IT revolution of course might be described as the start of the IT industry as we know it today – where business and more lately consumer IT products such as hardware and software became widely commercially available, and skilled labour grew in the market to either develop or make use of these products – with the latter in effect focused on developing the product into a useful service for the purchaser. Boil it down and this represents the bulk of the IT market today – and indeed adjacent core markets such as management consulting and business process outsourcing. And despite the multiple waves of technology change, till this point the bulk of industrialisation of IT within the industry itself has been mainly based on the first revolution – technology product based. The second IT revolution is already happening –of course it really started with the Web - and perhaps is best formalised now in industry terms through the Software as a Service model. But this alone describes a ‘how’ and doesn’t really express the ‘what’. Further, while the revolution is happening around us, the IT hype boy has cried wolf a little too often over the past 40 years which is good perhaps for the wolf and not so good perhaps for the town folk who only understand the farming business. So, I sum up the ‘what’ as: - from product to service - from specification for a service that doesn’t exist to making use of existing services that do - from specific services sourced by an organisation to mass-customisable shared services provided to a market - from internal focus first to external focus first - IT capitalization based more on information value and interaction rather than IT product functionality and transaction These distinctions seem to work equally well from an external or an internal market perspective and applying market service based thinking in a mixed internal and external approach is being adopted by the some pioneering major organisations. And if there was one word to pick which might incoproate these concepts - I'd choose 'Externalisation'. What will be really fascinating to see is how this starts to pan out for all those in the IT industry in 2008 – and for the businesses increasingly looking to gain value as opposed to cost reduction from IT. And some of the analysts are saying that by the end of this year around half of all corporates in the US will have adopted at least one SaaS service. Not bad for a model few had heard of only a year or so ago. If one considers the inherent value in the first revolution – which is still large of course – and the large footprint of current IT investment today – for sure this feels like an incremental and complementary revolution – but a revolution nevertheless. I’m reliably informed it’s not often one is part of a professional revolution – I think in 2008 those in the IT industry might realise they are going to have played a part in two. Voila the prediction! And a final thought on how business might work with the revolution – well, there are for sure many considerations but asking the question ‘what services can I use that already exist in the market (external and internal)?’ first, before one asks ‘how can I create the service myself for my business’, seems to be a good starting point for the new debate.

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C. Bate

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