The Implications of a Disappearing IT Industry

Christopher Mines [Posted by Christopher Mines]

Last month I had the pleasure of keynoting the "International IT Convergence Conference" in Seoul, sponsored by the Korean Ministry of Knowledge Economy. It was a fascinating combination of academic conference, government policy discussion, and technology trade show. And also my first opportunity to visit Korea.

The theme of the conference, and topic of the panel discussion I participated in, was "IT convergence." Convergence means many things to different people; in this case, convergence means the collision or combination of information technology and other industries, i.e., embedding IT capabilities in transportation, healthcare, construction, and etc. The case was well-argued by a number of speakers, and the example stories were compelling: phones becoming pocket computers, ships becoming floating computers, buildings becoming hi-rise computers, and the like. And we didn't have to stretch too far to imagine that big parts of the IT industry itself will eventually be subsumed into these other industries, becoming as important and ubiquitous -- and invisible -- as, say, electric motors.

Big opportunities for IT hardware, software, and services. But I felt it important to point out that such embedding or tailoring of IT systems into industrial and consumer systems will come with risks and challenges for IT suppliers, including:

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  • more diversity and specialization in IT hardware, which means less standardization and less benefit from mass-volume manufacturing.

  • a longer lifecycle for IT gear embedded into industrial systems, creating a mismatch between the IT industry's fast-release metabolism, and the longer cycle times for industrial systems like buildings, autos, or healthcare equipment.

  • the requirement for industry knowledge and specialization among IT manufacturers. Which means bigger salesforces, and more investment in training.

  • a similar requirement for professional services, which also equals people and therefore margin impact.

All of these challenges can and will be addressed by the IT industry as it becomes a central and hidden part of other industries and their products. But "convergence" in this parlance will represent opportunity only for those IT suppliers that can successfully navigate these obstacles.