Critique of the Arguments of Carrs: IT Doesnt Matter, C.

Madewell, 1

Critique of the Arguments of Carrs: IT Doesnt Matter

Informational Paper
Charles D. Madewell
August 17, 2013

ABSTRACT
In the year 2003, Nicholas Carr published a controversial article that shed the world of
information technology in a bad light. The basic thesis of Carrs article was: when an
information technology has become prevalent, ubiquitous, and part of the status quo, that
information technology has become a commodity in a non-proprietary technology infrastructure
and has therefore lost its ability to provide a competitive edge or strategic advantage for business
growth and profitability at the company level. Carrs article was successful in stimulating
thought but it did not hold to the principles of rigor and reliability required to be considered
scholarly, peer-reviewed research. Carrs article was, at best, a conceptual paper. Although his
article was compelling from the standpoint of conjecture, it provided very little quantitative
evidence to back his statements. Even from a qualitative analysis research method perspective,
there was not sufficient information presented to provide validity, credibility, or trustworthiness.
Our article therefore is an argument against the validity of Carrs article and provides evidence
showing that little academic rigor in research methodologies was used in the development of
Carrs article. Further, this article provides viewpoints that could have been cited to provide
evidence to support Carrs claims or alternate viewpoints to argue against Carrs claims.

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 2

CRITIQUE OF ARGUMENTS

Critique of Argument 1
A set of related arguments that Carr makes is that scarcity, uniqueness, and proprietary
technologies bring about strategic advantage and lock-in the vendor (Carr, 2003, pp.6-9). He
also states that as information technologys power and ubiquity has grown, its strategic
importance has diminished (Carr, 2003, pp. 5-6). Finally, he argues that information technology
(IT) can no longer be used to gain a strategic competitive advantage (Carr, 2003, pp.6). To
provide evidence for his argument, Carr discusses that a simple assumption typically drives IT
investment and that assumption is that IT is potent and ubiquitous and therefore it must have
strategic value (2003, pp. 6). He then argues that this assumption is false and mistaken. In fact,
he states that the only way to gain an edge over rivals is to offer something they cannot. To this
point he mentions that if a competitor finds something hard to replicate, it is an advantage. The
core point to his argument is that as long as the technology remains proprietary, it can provide
strategic advantage and that it has strategic potential. Carr states, when a resource becomes
essential to competition but inconsequential to strategy, the risks it creates become more
important than the advantages (2003, pp. 6). Later in the article, Carr counters his arguments
above by stating that, some specialized applications that do not offer strong economic incentive
for replication will survive. It would seem that if these specialized applications do survive there
is a good reason why they survived and it is probably tied to the openness of current IT systems
and not purely economic incentives.
For almost all of Carrs arguments and statements above, he could have provided
references to multiple subject matter experts or seminal authors to support his arguments. For

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 3

instance, had they been available, Carr could have used Porters Five Competitive Forces (HBR,
2013, pp. 39-76). Using Porters Five Competitive Forces would have provided subject matter
support as to why Carr believed that non-proprietary technologies cause an organization to lose
strategic competitive advantage. Specifically, a discussion of Porters Rivalry Among Existing
Competitors (HBR, 2013, pp. 46) could have been used. In another instance Carr uses the
example of American Hospital Supply (AHS) who is the developer of Analytical Systems
Automated Purchasing (ASAP) as a company that prospered due to proprietary technology. He
argues that ASAP essentially locked-out their competitors with this proprietary technology and
that it was the closed nature of this technology that made it valuable (Carr, 2003, pp. 9). Here
Carr could have cited Porters barriers to entry (HBR, 2013, pp. 44) as supporting evidence.
Another problem is that Carr gave no empirical evidence to prove his statements about AHS.
His arguments are made from soft research methodologies and are from a conceptual standpoint.
Had Carr provided some quantitative evidence to support his generic statement, his argument
may have been more believable and reliable. Furthermore, Carrs arguments in this section
would definitely not hold up from the standpoint of Kim & Mauborgnes, Blue Ocean Strategy
(HBR, 2013, pp. 123-142). In that strategy, the IT vendors would be looking for opportunities to
link technologies and provide what is needed for customers at a lower cost. For example, Carr
could have discussed how knowledge management is linked to information technology and how
knowledge management is changing the way managers make better decisions. Strassmann
(2003) makes this point in his Letters to the Editor. The Blue Ocean Strategy may provide the
differentiation and strategic advantage that Carr says is not possible. The data Carr provided to
support the set of arguments in this section did not provide any quantitative evidence to support
his claims nor did it use subject matter expertise. There was no form of qualitative research

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 4

methodology mentioned as being utilized such as thematic analysis (Boyatzis, 1998) or any of
the five qualitative approaches (such as phenomenological or case study) mentioned by Creswell
(2013, pp. 69-110). Carrs arguments in this section lacked the academic rigor required to be
considered scholarly, peer-reviewed research.

Critique of Argument 2
The second set of arguments that Carr makes is that information technology has become a
non-proprietary commodity, invisible, and has therefore become an infrastructure technology
(Carr, 2003, pp. 6-7). Because of this he argues that the window for gaining advantage from an
infrastructural technology is open only briefly with lower cost being the only advantage
information technology vendors have to offer yet information technology vendors are rushing to
be commodity suppliers (Carr, 2003, pp.7). The details he gives to support these arguments are
as follows. Carr says that the internet has transformed the business world and is the skeletal
backbone of commerce. He states that information technology has become available to all and
companies can gain real advantage using them. Then he notes that there is only a short window
to gain that advantage because the cost of information technologies will be driven down. Collin
& Porras (HBR, 2013, pp. 77-102) would have pointed out here that if a company can be
profitable (even for a short time) that could be part of the companys vision and strategy. The
vision would hold the companys core ideology while the envisioned future (HBR, 2013, pp.80)
would contain the audacious goals that would keep the company profitable over the long term
stretching past the short profit runs that Carr argues will happen. In other words, Carrs
argument is week from the standpoint of managements ability to do long term planning.

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 5

Carr also provides details on his definition of commoditization and infrastructural

technology (2003, pp. 6-8). He notes that information technologies that have become
commodities or infrastructural technologies have no real future to a company as far as profit or
strategic advantage is concerned. He even refers to them as inconsequential (Carr, 2003, pp.
6).

Carr then provides a series of example industries to support his claim that information

technology will also become inconsequential and infrastructural. He discusses the power
generation industry, the electric utilities industry, and the rail-line industry. But then he counters
his own argument by stating that infrastructural technologies do continue to influence
competition (Carr, 2003, pp. 7). Is he arguing with himself? It can also be pointed out that all of
the industries he mentioned are still in business today and are still profitable whether they are
considered commodities or infrastructural technologies or not.
From an academic research methodology viewpoint, Carr again made no references to
conducting any research to provide evidence for his arguments. He could have provided
quantitative empirical study data to support the claim that the window of gaining advantage for
an infrastructural technology is short. This could have been done using the experimental
research method discussed by Glatthorn & Joyner (2005, pp. 41). Carr could have also provided
a correlation study (Glatthorn & Joyner, 2005, pp. 44) showing how the time span for
competitive advantage is correlated to lasting profits. Regardless, Carr did not use any
qualitative or quantitative research method to support this set of arguments. Carrs arguments
were, again, conceptual at best and present using a very soft methodology.

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 6

Critique of Argument 3
The third set of arguments that Carr makes is that commoditization of information
technologies cause information technology businesses to crumble (Carr, 2003, pp. 8-9). Due to
this fact, he argues that information technology vendors must therefore learn to provide services
of the commodity that help customers overcome their vulnerabilities (Carr, 2003, pp. 9). Carr
provides little to no evidence to prove the argument that these business offering commodities
crumble. He states they will crumble on one hand but then gives advice how the company will
survive. If he had actually believed the companies would crumble, would he have given advice
to help these companies survive and thrive? On the contrary, all of the business examples he
gives for companies offering infrastructural technologies (electric companies, power generation
companies, rail-road companies) are still thriving. Again, is he arguing with himself?

Carr

offers proof that profits are evaporating (2003, pp. 8) and the industry is doomed in his detailed
breakout discussion of rail-roads yet, as previously stated, rail-roads have been in business since
the late 1800s and are still profitable and well utilized. Carr argues that if a technology is
available to all, it will quickly reduce it price (cost) yet it is commonly known that the prices of
rail transportation and electricity are rising.
Instead of focusing on the infrastructural commodity crumbling (Carr, 2003, pp. 9),
Carr could have focused on using the concepts offered by Applegate, Austin, & Soule (2009,
pp.41-118) on understanding the business model, the impacts of IT on the business model &
organization, and making the case for IT. Applegate, Austin, & Soule point out that many
organizations have a flawed business model which may be Carrs problem since he
consistently argues with himself. The core idea of the business model is to define a unique
strategy, attract the resources required to execute, execute, and create value for the organization

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 7

and its stakeholders (Applegate, Austin, & Soule, 2009, pp. 43). By performing this one
operation, Carr may have been able to see the long-term value of offering commodities and
infrastructural technologies.
From a research methodology viewpoint, Carr did very little to provide evidence that he
conducted any type of academic research that included rigor, repeatability, or reliability. For the
argument that commodities companies will crumble, Carr could have done a case study report
(Merriam, 2009, pp. 259) on how many companies offering commodities or infrastructural
technologies have failed in the last 50 years. Again, the examples that Carr gave, prove that
they, on the contrary, have lasted the time test. Carrs argument that companies must learn to
provide services that help customers overcome their vulnerabilities is a good argument and one
that is supported by other authors. Carr could have added a reference to Neilson, Martin, &
Powers article, The Secrets to Successful Strategy Execution (HBR, 2013, pp. 143-166).
Neilson, Martin, & Powers point out that solid execution will keep you on top as a provider.
Further, they state that handling two key aspects can help in strategy execution. These are:
clarifying decision rights and ensuring information flow (HBR, 2013, pp. 143). Part of ensuring
information flow is the use of IT which further amplifies its value and provides evidence against
Carrs arguments. Carrs argument that businesses will crumble was not proved or validated.
His argument that vendors should focus on helping customers overcome their vulnerabilities is
valid but he could have provided additional supporting data on how to execute that strategy.

Critique of Argument 4
The fourth set of arguments that Carr makes is that information technology vendor
should: follow not lead, become tight-fisted with spending, and manage cost and risk

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 8

meticulously (Carr, 2003, pp.11-12). By doing this, Carr agues this will cause them to be
successful (Carr, 2003, pp. 9). To support these arguments, Carr gives a series of statistics about
capital expenditures for IT. These were: 5% for IT in 1965, 15% for IT in the 80s, 30% for IT
in the 90s, and 50% by the end of 1999 (Carr, 2003, pp. 5). This is one of the only places that
Carr tries to use actual data to support his arguments. The data presented was cited as coming
from the U.S. Department of Commerce Bureau of Economic Analysis which is a reputable
organization that has perceived credibility and typically utilizes quantitative research methods
that provide statistical significance for the reports they provide. Here, Carr does provide reliable
evidence. The only problem is that he does not tie this data to his argument that companies
should manage cost and risk meticulously (Carr, 2003, pp. 12) nor does he give any explanation
on why the IT costs have increased over time or if they have increased profitability for the
companies. Carr could have conducted or provided a quantitative correlation study (Oates,
2006, pp. 258-259) showing how IT costs were negatively correlated with profit margins. Then,
his argument that companies should become tight-fisted and manage cost more meticulously
would have been move valid, credible, and reliable. Carr also offers no quantitative proof that
his recommendation will be successful. Again, an empirical study would have supported this
fact if the fact is actually true.
Although Carrs arguments that companies should manage spending, cost, and risk
meticulously are very generic, they are typically good arguments overall. To support his
argument, Carr could have cited Maizlish & Handler where they discus very specific survey
results that highlight the shortfalls of a majority of companies in obtaining value and increasing
profitability (2005, pp. 10). Providing this type of empirical evidence from survey data would
have supported Carrs argument in a much better fashion. Although Carr did provide some

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 9

empirical data in this section of arguments, he did not tie it to his argument well which left his
argument soft and conceptual, lacking real academic research rigor.

Critique of Argument 5
The fifth and final set of arguments that Carr makes is that technology sharing, cheap
processing, cheap storage, interconnectivity, interoperability, and standardization have caused
information technology to blossom rapidly (Carr, 2003, pp. 7-8). Due to this fact, he states that
information technology is nothing more than a transport mechanism that is highly replicable and
scalable; it has become doomed for most proprietary applications (Carr, 2003, pp. 7-8). Yet
again Carr presents doom and gloom when it comes to technologies that have become
standardized. To this end, he used electric utilities, rail-roads, and power generation companies
but also adds to that list the examples of the telegraph, processing power, and internet
connections. Carr presents a graphic of the sprint to commoditization where he compares IT to
railways and electric power. This chart does show quantitative values and gives a set of sources
as, Erick Hobsbawm, Richard Duboff, and Rober Zakon. The problem with the comparison
graphic is that Carr makes an assumption that all these IT host computers will allow free access.
Many might not and could require service level agreements and fees. This could slow down and
inhibit the commoditization of IT.
Then, yet one more time, Carr presents an argument against his own arguments by stating
that these type of technologies blossom rapidly and that companies will continue to spend large
portions of funding on IT (2003, pp. 11). For IT companies who choose the strategy of
becoming IT vendors, this does not sound like a scenario for doom. On the contrary, it sounds
like an opportunity for business as Johnson, Christensen, & Kagermann (HBR, 2013, pp. 103-

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 10

122) would point out in their article, Reinventing Your Business Model. They claim that a good
business model will often wrap a good technology to provide game-changing convenience for
consumers (HBR, 2013, pp. 105) and that you can reshape an industry. Thus, instead of stating
that IT is doomed, Carr should have presented ways to wrap technology to reshape the industry
by focusing on the customer value proposition, the profit formula, key resources, and key
processes (HBR, 2013, pp.106-114). This would yield a decision point as to if the business
model needs to change to prevent the doom and gloom Carr discusses.

Synthesis and Conclusions

The basic thesis of Carr presented in his article was not validated with credible
evidence to support his claims. In very few cases, Carr actually offered quantitative data to
support his claims and this data was always from someone else research. Carr referred to no
quantitative experiments that he conducted himself or did he present any research he did from a
credible qualitative analysis perspective. Carrs work was, at best, a conceptual article that
stimulated must thought and debate in the field of information technology but ultimately
provided no evidence to support his arguments. Often, the quantitative data Carr presented could
be shown to offer a counter argument against Carrs own argument. Carrs article did not hold to
the principles of rigor and reliability required to be considered scholarly, peer-reviewed research.
Even from a soft, qualitative analysis research method perspective, there was not sufficient
information presented to provide validity, credibility, or trustworthiness. This article presented
argument against the validity of Carrs article and provided evidence showing that little
academic rigor in research methodologies was used in the development of Carrs article.
Further, this article provided viewpoints that could have been cited to provide subject matter

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 11

expertise and evidence to support Carrs claims or alternate viewpoints to argue against Carrs
claims. Carrs article was conceptual and stimulating but was not real research.

References
Applegate, L., Austin, R., & Soule, D. (2009). Corporate information strategy and management.
New York: McGraw-Hill Irwin.
Boyatzis, R. (1998). Transforming qualitative information: Thematic analysis and code
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Carr, Nicolas G. (2003). IT doesnt matter. Educause Review, 38, 24-38.
Creswell, John (2013). Qualitative inquiry & research design: choosing among five approaches
(3rd ed). Thousand Oaks, CA: Sage.
Glatthorn, A. & Joyner, R. (2005). Writing the winning thesis or dissertation: A step-by-step
guide. Thousand Oaks, California: Corwin Press, A Sage Publication Company.
HBR (2013). HBR's 10 Must Reads on Strategy. Boston, Massachusetts: Harvard Business
Press.
Maizlish, B. & Handler, R. (2005). IT portfolio management step-by-step: Unlocking the
business value of technology. Hoboken, New Jersey: John C. Wiley & Sons.
Merriam, Sharan (2009). Qualitative research: A guide to design and implementation (2nd ed).
San Francisco, CA: Wiley.
Oates, Briony (2006). Researching information systems and computing. Los Angeles: Sage
Publications Inc.

Critique of the Arguments of Carrs: IT Doesnt Matter, C. Madewell, 12

Strassmann, P. (2003). Letters to the editor. Havard Business Review (6), 7-9.