Through the 50s to the end of the 70s, IT, as it was then, existed in computer rooms, and number crunchingwas its driver. With the coming of the PCs, in the very early 80s, IT shifted from the computer rooms to thedesktop. The driver was business and personal productivity, aided and abetted by Moore’s Law, which made thePC more and more affordable.
Today, it has moved from the desktop into our lives. And the driver is quality of life. The implicationsare significant.
Consider the four most widely (and frequently) used IT "applications" in the world (in noparticular order). Let’s start with email. Although a product of IT, it’s not about IT at all. It’sabout being in touch with friends and family. It’s about shrinking hierarchy in organizations. It’s aboutability to access people and information hitherto denied. It’s about communication and relationships. It’sa part of your and my life.
Bank ATMs are a result of some of the most complex and sublime work in IT. Yet, once again, to you and me,it’s not about IT at all. It’s about the freedom to take out money anytime, anywhere and party. It’sabout avoiding going to banks. It’s about saving time. It’s about convenience. It changes our quality oflife.
Video gaming is yet another killer IT application. IT? It’s all about entertainment. It’s about livingout your fantasies, primordial to subliminal. It’s about addiction and competitiveness. To the gamers, it’san integral part of life.
And what about the mobile phone? An IT product if ever there was one but used by millions who can’t evenspell IT. As Nokia says, it’s about connecting people.
All this doesn’t mean that IT applications in business productivity are going to decline. It doesn’tmean that IBM and SAP are going to get out of business. After all, we produce more food today than we ever didin the agricultural age. It’s just that, as mentioned before, the center of gravity has changed.
What does that mean?
Firstly, there is a high probability of rapid and extreme consolidation in the enterprise applicationspace. By extreme, I mean that only a handful of companies will exist, the rest would be devoured, includingmany big ones.
Secondly, and conversely, the new, "exciting" companies are likely to emerge in the areas ofentertainment, media, finance and such like, in large numbers. It can be the case of existing companiesre-inventing themselves or new companies usurping them by changing the very way business is done, leveragingIT.
Thirdly, in all probability, the kitchen and the home entertainment products will change beyondrecognition. They’ll start to become more and more intelligent. Embedded systems will be a hot area. Andnewer companies, especially from the computer industry, will jump into this area. Watch out for IBM microwavesand Motorola cameras.
Fourthly, the brighter minds will gravitate towards the new center and this will mean that there will befar more exciting innovations here and far less in the enterprise application space. This will create aself-fulfilling prophecy.
But the most profound change will be in the people in this new IT industry. They’ll need to understandconsumers as much as the people in the previous era of IT needed to understand business.
So, IT seems ready to split into two streams. One will become a utility for organizations like electricity.This will be characterized by maturity, low growth, and low stock multiple and will be dominated by giantenterprises. The other will become a Fast Moving Consumer Good (even if it’s a service), trying to create atingle in our life. A lot of these will be boring, a lot of these will be copy cats, but a lot of them willbe, hopefully, wow!
And then, the center of gravity will shift once again.
