Something happened in the first years of the 20th century that would have seemed unthinkable just a few decades earlier: Manufacturers began to shut down and dismantle their water wheels, steam engines and electric generators. Since the beginning of the Industrial Age, power generation had been a seemingly intrinsic part of doing business, and mills and factories had had no choice but to maintain private power plants to run their machinery. As the new century dawned, however, an alternative started to emerge. Dozens of fledgling electricity producers began to erect central generating stations and use a network of wires to distribute their power to distant customers. Manufacturers no longer had to run their own dynamos; they could simply buy the electricity they needed, as needed, from the new suppliers. Power generation was being transformed from a corporate function to a utility.
Almost exactly a century later, history is repeating itself. The most important commercial development of the last 50 years — information technology — is undergoing a similar transformation. It, too, is beginning an inexorable shift from being an asset that companies own in the form of computers, software and myriad related components to being a service that they purchase from utility providers. Few in the business world have contemplated the full magnitude of this change or its far-reaching consequences. To date, popular discussions of... To read the complete article, login or sign-up using the form below.
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