November 17, 2003 5:45 PM PST

Tech bigwigs dispute guru's pessimism

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November 7, 2003
LAS VEGAS--Executives from IBM and Microsoft on Monday attacked the findings of Nicholas Carr, the consultant who became a technology industry bad boy when the Harvard Business Review published an article he wrote titled, "IT Doesn't Matter."

Carr's article argued that information technology is becoming standardized and commoditized and thus no longer gives a company a competitive advantage that lasts more than a fleeting moment. Thus, it's better to wait to buy technology after it has matured, letting others pay the higher initial prices.


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"Because the first mover always spends more than the follower, you have less and less time to recoup the investment," Carr said, speaking at a panel discussion at the Comdex trade show here. "Most companies should move to a much more conservative and almost defensive mode in IT."

Such proclamations went against the grain for Jeff Raikes, the group vice president in charge of Microsoft Office, and Deepak Advani, vice president of marketing for IBM's PC group.

"There's lots of potential for how IT is going to make a difference," Raikes added. Wal-Mart Stores, for example, is requiring suppliers to adopt radio frequency identification (RFID) tags to track products. "Their adoption of RFID is a great example of where they think information technology matters," he said.

Advani concurred. "To take a complacent attitude and just lay back is very dangerous," he said. "IT absolutely matters. It matters even more than it has in the past."

Carr has become something of a celebrity with his article, which he is now expanding into a book titled, "Does IT Matter?" In September, he debated Sun Chief Executive Scott McNealy who, like Advani and Raikes, has a passion for and vested interest in new technology.

Technology is the only way competitors can avoid being left behind by fast-moving companies such as FedEx or Charles Schwab, Advani said.

A secondary reason for technology is to hire good talent, Raikes said. "Successful businesses compete in part by getting great talent. If you don't have an information infrastructure that allows people to do their best work, I guarantee that over a period of time, you're not going to get the best talent," he said.

Carr agreed that complacency is inadvisable but disagreed that fast adoption is essential.

"The faster you get something going, the more you overshoot the needs of the users," he said. "Only by becoming a shared standardized infrastructure can a technology produce its greatest productivity and benefits to society. But what it means for a company is that being an innovator rarely pays more."

 

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