Commoditizing enterprise IT

20.06.2005
Von Nicolas Callegari

It is obvious that enterprise IT is reaching ever-increasing levels of commoditization, so much so that integrators and resellers need to innovate and add business value around technology more now than ever before.

When considering the high levels of functionality and performance on offer, even in lower-end products, at the end of the day users are spoilt for choice, and definitely win from a cost point of view.

Implementing commoditized technology still requires a certain amount of skill, which, says Orcom GM, Daryl Blundell, will not push commodity pricing on enterprise IT just yet.

"Enterprise computing remains a highly complex and specialized practice," he says, "and, almost by default, commands a certain price premium." The commodity line can be drawn between medium and large enterprises, where the needs for entry-level client/server architecture differ from high-end, complex and virtualized environments.

However, it seems as if even this theory could fall short in the not-too-distant future. With talk of grid computing and "renting out" processors and storage resources to end-users at low per MB prices, large enterprise IT could become a commodity more quickly than we think.

According to BMI-T director, Mark Walker, enterprise IT will never commoditize.

"It is unlikely that large enterprise IT will ever commoditize, because these enterprises rely heavily on their systems to deliver competitive advantage, either through increased efficiency or access to their relevant markets."

The real question, Walker says, is where IT commoditization is happening. "Specialized technologies (such as VoIP for example), or products that require any amount of customization, will never commoditize."

The net result of commoditization is an increasingly standards-driven market.

But commodity stops when the product or technology has an impact on business processes, which means that jobs are still secure, and there is still place for integrators and resellers.