Cloud Computing and Commoditization of Supplier Inputs

I've heard the term cloud computing thrown around a lot and never quite knew what it was. I quickly Google'd it. I may be simplifying things, but it basically sounds like software (or hardware)-as-a-service. Amazon's Web Services (AWS) is likely the leader in this category. It seems like a natural evolution in computing - just a further packaging and abstraction of computing power. I think what's important about it, though, is that from a strategic perspective, IT will become less and less of a differentiator among companies. In the long-run, if everyone can quickly integrate and bring applications from a salesforce.com or AWS online in their business quickly, IT in and of itself will become more commoditized as an input in the value chain. Or maybe it will kick-off another round of IT innovation that could serve as a differentiator.

Comments

gnp said…

My personal opinion is that individual pieces of IT functionality will become a commodity but the way that people assemble them, the overall experience they create, and the pace with which they can shift/fine-tune them based on changing market conditions will become the differentiator.

January 2, 2009 at 6:47 AM

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