Hello Inner Circle readers,

I can always tell by the volume of response mail I receive how compelling a letter has been. Without a doubt, my June 2008 column entitled "'The End of IT' Strikes a Nerve" did just that — it struck some nerves.

So for this issue, I'm going to explore some of the comments I received from readers around the world and hopefully, provide some additional insight. Some responses are combined into common themes and I've omitted names to protect readers' privacy.

Reader Comment: These services don't yet exist and I'm concerned about my data being with a service provider.

Bob's Response: A couple thoughts here. Regarding the first point, I'm looking at a Web site called asp.thelist.com that has 3084 service providers that do this for a living. There is clearly an industry out there today, albeit an emerging one.

Regarding keeping your data elsewhere — I'll use, as I did in my June letter, the example of payroll services. I don't know of a major company today that runs its own payroll system. There are many examples of service providers that are delivering secure services to companies that have decided that it's not a core competency to run payroll.

Isn't that the most precious data you can imagine? People's personal information like home addresses and social security numbers? So when I ask the question, "What makes you comfortable doing that but not your CRM data," there's never a response. The industry needs to mature and get better with its own marketing and branding. There are some robust, mature service providers today that are making lots of money doing it.

Reader Comment: Does this new model give competitive advantage to IT shops that take advantage of it versus those who don't?

Bob's Response: Organizations that adopt service-based solutions to applications will be able to provision applications much more quickly than those who develop applications and support them internally. It takes person-years, if not person-decades, to write most business applications. If you go to a provider, you can sign a contract and be online in 20 days. The IT shops that adopt this strategy will be faster in responding to business needs, and correspondingly, to changes in the business environment.

Additionally, the cost model for IT shops that adopt these new service-based solutions will be lower — or at least more flexible. They won't have the fixed costs of developers, datacenters, or associated infrastructure. Instead, they'll be free to look for the most cost-competitive solutions to meet business demands — perhaps even using reverse auctions to find the lowest cost providers. Services will be provided on a per-unit basis, so as demand fluctuates so can the IT spend. That's simply not possible with today's capital-intensive IT models.

Finally, mobility will be enhanced. Today, most IT shops put a thick firewall around the organization and its applications. If you're a mobile worker, it's difficult to get access to those applications. In the world I'm describing, every application should be available as a simple URL from any browser on any device.

Reader Comment: I wholeheartedly agree that a services-oriented model is the right way to go. However, please consider that in Africa, the cost and availability of bandwidth is so extreme that in many cases it is simply not possible to house applications offsite because the access costs alone will exceed the costs of the applications themselves.

Bob's Response: Good point. It's absolutely true that in Africa, and parts of the Middle East, Latin America, India, China, and elsewhere, bandwidth costs are simply prohibitive. Having said that, it's undeniable that the cost of bandwidth is declining worldwide while availability is increasing.

AT&T, Verizon, and other big players are investing billions of dollars in those regions because they recognize the untapped revenue potential. Application services, and all Internet traffic for that matter, are going to explode. But you have a valid point. It's an evolutionary timescale, and I think it's a relatively short-lived problem.

Reader Comment: Our IT shop is frustrated. We get it, but the business doesn't.

Bob's Response: Don't think of it as a revolution. Map out a slow, gradual series of steps and events that let you test the technology in a low-risk way. Select a service with no or negligible implications for revenues or other hot-button areas that may concern the business side. Then, find a service provider with a good track record. Trial it carefully and demonstrate the success in terms of benefits to the business.

In time, you'll win over the naysayers. Find business stakeholders who are sympathetic. There are plenty of areas to target — even in the most traditional IT shops.

Reader Comment: I'm a young person just graduating from university. What do I do?

Bob's Response: The evolution we are talking about is just that. For many companies, it will be years or even decades before they get to the point we've described. Progressive companies might get there in a shorter period. Across the board, the "end of IT" may not be imminent — but it is inevitable.

If you're a computer science or related major, you have a few things to think about. First, due to the timeframes I've described, there will be companies that need to fill "traditional" IT roles for years to come. If you're interested in those types of roles, don't panic yet. You might want to consider looking at companies who are less progressive in their IT thinking — or you might want to consider going to work for one of the service providers.

Another option to consider is focusing your skills/education on the roles that will become increasingly important in this new world we've described. Specifically, vendor management (people who understand contracts, negotiations, SLA management, etc.) and all aspects of security (important as we build federated security models between services providers), and business engagement roles (including business systems analysis, communications, and program management).

So to wrap up, let me just say I'm thrilled to be able to engage in such active dialogue with you, our readers. Keep those compelling questions and thoughts coming my way. Until next time...

Bob Worrall
CIO, Sun Microsystems
cio@sun.com