Hi, I'm Riku Seppälä and this is page is my central presence on the web. I come from Finland and live in Montreal. I'm A Business Strategist And Corporate Information Systems Developer. Currently I'm Working on My Masters Thesis In Business Strategy. I'm A Firm Believer Of The Clan Of Getting Things Done. On my page you can find links to my CV and the projects I'm working on at the moment.

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    Wednesday, 29 July 2009

    The Shift to Utility Computing / Cloud Doesn't Erode Competitive Advantage From IT

    I sometimes see that researchers and technology analysts write that it is not possible to create competitive advantage through Information Technology. The reasoning is that as computing is becoming a utility and applications are moving to the cloud, IT becomes more of a competitive necessity that something that provides differentiation.

    The analogy is often made to electricity;
    1. first electricity was produced locally. In the same way as companies have their own data centers for computing today.
    2. electricity then shifted to grids, and was provided as a service or "utility".

    As a utility, electricity didn't provide any competitive advantage.

    Computing is now becoming a utility just as electricity did.

    But what about machines that were run on electricity?

    Companies that used machines and integrations of machines that supported their specific processes were able to create competitve advantage even after the shift to electricity as a service or "cloud" electricity.

    In the same way, companies that can use applications and integrate them in ways that support their specific processes will be able to create competitive advantage.

    It's just the infrastructure that is not in-house anymore, not the way we use it.

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