Disintermediation of IT: Lessons from "Bubble 1.0"

Disintermediation of IT: Lessons from "Bubble 1.0"

by Jake Sorofman

**Register now for a related webinar on 6/24: "Focus on IT Agility"**

Back in the silly season of the late 1990s, all measures of reasonability were suspended in favor of a punch-drunk land grab for "eyeballs" on the path to IPO. While e-commerce was absurdly hyped, it was also an important new context for selling stuff that was bound to disrupt the established value chain.

E-commerce promised to take the friction out of the value chaina more efficient way to connect supply with demand. To call a retailer "bricks and mortar" was the highest form of degradation; these out-of-touch progenitors of modern business were doomed to become footnotes in the annals of commercial history.

But no participants in the value chain were more maligned than the wholesaler or distributor. These folks made money by aggregating and matching supply and demand. But in the age of online commerce, was this role necessary? Many thought it wasn'tand from this premise, their obituaries were written.

The fancy word for this was "disintermediation"a fundamental shift in the value chain that rendered a set of participants irrelevant. It's a concept that got a whole lot of ink in now-defunct and previously high-flying "new economy" publications.

Fast forward to 2010, and the same sort of dynamic is at work again.

Cloud computingspecifically, swipe-a-credit-card forms of public cloudpromises to disintermediate enterprise IT. As the story goes, in the face of long delays, business lines and developer groups will follow the path of least resistance, deploying their workloads to the public cloud. Applications will go rogue and traditional IT will become irrelevantdisintermediated by the cloud.

Do I believe it? Yes and no.

Bubble 1.0 did not change everythingbut it did force everyone to change.

Participants in the value chain willing to rethink their roles and value propositions capitalized on the shift. Those who dug in their heels and shook their fists in angry protest? They're featured in the footnotes.

There is a sober lesson for IT buried in the drunken silliness of Bubble 1.0: Don't fight the forces of change. Some degree of skepticism is certainly healthy, but look at these punctuated shifts as new opportunitythe natural course of evolution.

That's exactly what we'll cover on Thursday, June 24th in a webinar discussion bringing together CTOs of newScale, rPath and Eucalyptus Systems to envision the future of IT in the age of cloud computing. Be sure to register to participate!

The premise of the discussion: IT must transform into something that looks a lot more like a public cloud. At the heart of this transformation is a new tool chain that allows IT to change the economics of IT service delivery and to remove the friction from the IT value chain. IT becomes a self-service provider of on-demand business, infrastructure and compute services.

So, will cloud computing change everything for IT? Probably notbut it will force everyone to change. Those who don't change? We all know how that story ends.

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