Frustrated by definitions of commodity

PlugI keep hearing people describe IT as increasingly commoditized and they are often discussing PC’s and office products at the time.  This gets me frustrated because in my experience these particular technologies are anything but commodities.  Although there are very many definitions of commodity I used to think that Peter Cochrane was getting close when he said:

It seems to me that we find commodity items and services useful by definition! But when the price has fallen sufficiently, we no longer value them. That is, we tend to take things for granted and at some point consider their availability as good as free. Water and electricity are two good examples. We turn on the tap for a drink and flick a switch for light without even a second thought.

However I now think this style of thinking takes us to a dangerous place, its very similar to thinking about the purchase cost, rather than the total cost of ownership.  I think a much safer definition of commodity goes as follows:

A commodity is something that has a total cost of replacement that is very close to the purchase cost of the replacement, ie ownership has no value and ceasing to own has no penalty.

Now this definition might seem a bit too subtle,  but let me give you some examples of commodities and see if it works:

I can switch electricity and telephone supplier in the UK simply by making a short phone call.  I can replace my fridge by unpacking it, sliding it out of the kitchen and sliding in another one and re-packing.  These seem to fit my definition is commodity pretty well.

Now lets look at my PC, which is often referred to as a commodity,  unfortunately by my definition we have a problem,  the replacement cost is very considerably greater than the cost of replacement,  not only might I have compatibility issues to resolve but I will have data to transfer, application licences to find, media to find, software to install and configure etc etc.  Whilst the hardware might be a commodity the working system is anything but.  When looked at in this way commoditization looks like a great way to go though,  I would love to replace my PC and for all of the “state” to just transparently restore itself to the device.  With enterprise management software we are getting closer to this situation,  but we are a long way away from it in the home.  As data volumes increase and the state definition becomes increasingly complex I also think we will also continue to struggle in the enterprise.

I recently had a discussion with Microsoft planners about requirements for Windows beyond Vista and this issue was high on my wish list.  In fact I said to them that my high level requirement was for Windows to meet my definition of commoditized, and for loss and upgrade events to cost me little more than the purchase cost of the replacement device.  A more concrete suggestion was to be able to treat everything like data, ie I can just copy my PC to another PC, or to a USB memory stick and ironically Microsoft’s acquisition of Softricity might be one of the stop gap technologies that makes this more practical.  However I think the long term solution will need a lot of work by the whole industry, Graham also comments on this

Steve Richards

I'm retired from work as a business and IT strategist. now I'm travelling, hiking, cycling, swimming, reading, gardening, learning, writing this blog and generally enjoying good times with friends and family

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