Do you agree with the argument made by Nicholas Carr to support his position that IT no

longer gives companies a competitive advantage? Why or why not?

Do you agree with the argument made by the business leaders in this case in support of the
competitive advantage that IT can provide to a business? Why or why not?

I strongly disagree with the argument made by Nicholas Carr on his position that IT no longer
gives companies a competitive advantage; he has offered some clarifications of his argument
in that, he doesnt really mean that information technology doesnt matter; rather his point is
that because IT has been commoditized, like electricity, it confers upon its business users no
competitive advantage. Carr concludes that since information technology no longer provides a
competitive advantage to businesses and that they should stop spending wildly on advanced
information technology products and services.
I believe Carr misunderstands what information technology is, in that he simples passes it as
merely a bunch of networks and computers. The glaring flaw in that perception is its complete
disregard for the centrality of software and the fact that human knowledge or information can
be mediated and managed by software. Also using his analogy of electricity and its lack of a
competitive advantage, controlling electrical power grids is still famously problematic and not
to mention major developments in technologies such as wind, solar, fission, fusion, hydrogen,
and batteries, all of which present strategic opportunities. And information technology is
bigger and more recent than electricity. Both are still rapidly evolving; both are very much
alive as important elements of corporate strategy.
Quotes from business leaders:
Charles Fitzgerald, Microsofts general manager for platform strategy, says that Carr doesnt
put enough emphasis on the I in IT. The source of competitive advantage in business is
what you do with the information that technology gives you access to. How do you apply that
to some particular business problem? To say IT doesnt matter is tantamount to saying that
companies have enough information about their operations, customers, and employees. I
have never heard a company make such a claim.
Paul Strassman who has spent 42 years as a CIOat General Foods, Xerox, the Pentagon,
and most recently NASAwas more emphatic. The hardwarethe stuff everybodys
fascinated withisnt worth a damn, he says. Its just disposable. Information technology
today is a knowledge-capital issue. Its basically a huge amount of labor and software. Says
he: Look at the business powersmost of all Wal-Mart, but also companies like Pfizer or
FedEx. Theyre all waging information warfare.
In both quotes, I believe the key phrase is what you do with the information from IT that really
matters. Utilizing it effectively is what gives that competitive edge and to that end, I agree with
the argument made by the business leaders in support of the competitive advantage that IT
can provide to a business.

RobertHoff,AndyGrove:WeCantEvenGlimpsethePotential,BusinessWeek,August25,2003,
pp.8688;SpeakingOut:ViewfromtheTop,BusinessWeek,August25,2003,pp.10813.
I have to disagree with your statement that though innovation strategy is used, threat
of substitute and rivalry of competitors provides no competitive advantage. The threat
of substitution and rivalry of competitors is exactly what creates competitive
advantage. The texting app Whatsapp was born from said rivalry and facebook, which
put to rest all its other rivals during its budding years, Friendster. In the face of rivalry
and competition a company is forced to innovate, in the case of Apple, which created
the Mac in a market dominated by the PC creating its own competitive advantage and
PC later countering by making more complex and intelligent software like Windows XP

and Windows 9 and 10. But lets not forget that it was rivalry and a threat of
substitution that created all these innovations.

Hey Cameron,

Following along the lines of Prof B's statement, Carr uses Moore's law as an analogy to how
the advantage does not last and is quickly replicated keeping in mind that he uses it as a
prediction as opposed to being merely an observation. Companies such as Oracle or SAP as
IT vendors are bound to be against his statements as their business model revolves around
selling of such products and would have affected their bottom lines as Prof B mentioned.
Who Carr is specifically or generally targeting (depends on point of view) is the idea on the
use of IT itself. Hes right that the hardware infrastructure of business is rapidly becoming
commoditized and, even more important, standardized. Computers and networks per se are
just infrastructure. However, as I pointed out in my post, he completely disregards the
centrality of software and the fact that human knowledge or information can be mediated and
managed by software.