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Potential Barriers

By Edward Cone  |  Posted 01-09-2008 Print

What kind of constraints do you see on this movement? What needs to happen and what could keep it from happening?

Carr: There are a number of potential barriers. One is the capacity of the Internet. So far that hasn't been a problem—and it may be a while before it becomes a problem—but eventually you have to believe, particularly with the shift to video and multimedia, that current capacity will tap out. But I don't see the technology as being the big constraint. The technological advances—in the fiber optic network, virtualization, grid computing and parallel processing—are pushing this transition to the utility model.

The bigger constraints are probably related to data security, including regulatory constraints on what companies can do with their data. That is a very real issue for a lot of companies. It will ultimately resolve itself.

In many cases, it takes a while for governments and their regulatory frameworks to catch up with new technological capabilities. We're probably in one of those situations today. Ultimately the utility model will provide greater data security than we have in today's fragmented model. But companies are often nervous, and for good reason, about where their data is stored.

The issues about security are in one sense a little bit overblown. Companies get used to allowing third-party suppliers access to sensitive information all the time.

CRM is one of the leading software-as-a-service offerings. That means putting very sensitive account information into somebody else's database. Companies have been doing that with payroll for many years. Recently a bank CIO mentioned that his company and a lot of others use outside suppliers to print up their statements. They supply all the information of accounts to these third parties.

We'll see technological solutions, whether encryption or other focused advances, that will alleviate these concerns. As big companies like Google, Salesforce.com and SAP move into this arena, they will invest a lot of time, money and technological expertise to make sure companies can be confident that data will be safe and secure and isn't going to leak through to other companies' hands. It's going to take time. It comes down to a matter of building trust between supplier and buyer.

What about user and customer experience?

Carr: Moving to a Web model will have benefits for companies beyond cost. IT has been organized as an isolated asset. Every company builds its own systems [and its own] networks, even if it uses the same components as its competitors. It's based on an assumption of isolation of systems and isolation of data.

As we move to a Web model, we move to a model based on communal assets and easily sharable data. With the isolated model, sharing information, whether between business units or between partners, can be a big hassle. Sharing information becomes much easier as we move toward more multi-tenant systems or shared systems.

Ultimately, corporate systems will look more like the Web 2.0 systems people use at home or in their dorm rooms, built with the ability to customize the way an application works so it fits your particular needs, to share information with people and organizations you choose to share it with. It's a much more flexible, much more personalized, much easier-to-use model.

Page 4: Not All-or-Nothing


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