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 / Autumn 2009 / Issue 56(originally published by Booz & Company)


The Consumerization of Corporate IT

Allowing employees access to online IT services, such as e-mail, desktop applications, and file storage, could save corporations money and improve productivity.

In the early 1980s, when the personal computer first landed on store shelves, a quiet rebellion took place in corporate America. At companies large and small, employees began to purchase PCs outside their IT department’s purview. To the workers, the PC offered a means of doing their jobs better and becoming more productive. To business executives, the PC represented a blow against centralized control of information and software applications, manifested by massive mainframes and desktop dumb terminals.

Those days are mostly forgotten now. But IT departments are on the verge of repeating history. Indeed, IT managers, who felt the initial threat from PCs most keenly and led the charge against them, are now (perhaps unknowingly) standing in the way of what could be a second wave of consumerization in enterprise technology — and it’s costing their companies dearly.

During the past five years or so, high-technology companies have shifted their emphasis toward consumers. As Intel Corporation Chief Executive Paul Otellini put it in late 2007, “Consumers today are the number one users of semiconductors; they surpassed IT and government in 2004. That’s a big change; prior to that period, most people developing silicon in the industry were focused on the...enterprise and IT. Today, most of us are focused on consumers as drivers.”

IT equipment has become commoditized and reliable, to the point that fixing a laptop is now as pain-free as taking it to the local Geek Squad, waiting for an hour, and then paying US$50 — a far cry from the drawn-out, expensive computer repairs done by the IT departments in most companies. And at no or relatively low cost, consumers can access online services including e-mail, instant messaging, desktop applications, document management, and file storage that equal or exceed most corporate equivalents.

To take advantage of this phenomenon, IT departments must begin to give corporate users access to the scale and innovation of the consumer market. Repairs can be made by Geek Squad or similar shops, device connections should be made through the Internet, the use of Web-based software should be encouraged, and employees should connect to a corporate network only to access data and applications that must remain inside a firm’s firewall.

Most important, IT consumerization could release a lot of money from the IT budget. Because so few companies have adopted this approach, it’s difficult to quantify precise savings. But, according to CIO magazine, semiconductor manufacturer Avago Technologies Ltd. recently adopted Internet-based Google Apps (Gmail, instant messaging, word processing, and spreadsheets, among other programs) for $50 per user per year and has trimmed its annual IT costs by $1.6 million.

But the appeal goes beyond cost. Consumerization opens up the organization to consumer-grade services that innovate at a much faster pace than the organization can. For example, in the consumer model, antivirus and software updates can be set up to install automatically and seamlessly, whereas in most companies upgrades can take weeks or months to complete. Or take Skype, the Web-based telecommunications service. Consumers love it and the price is right: Calls are generally free or cost just pennies per minute. For workers, Skype offers the ability to communicate inexpensively with colleagues, even through videoconferencing, from virtually anywhere; because Skype is carried via the Internet, it often works where cell phones don’t. But despite its obvious advantages, corporate IT departments tend to prohibit Skype’s use, claiming that it could weaken internal security protocols — a problem that could be alleviated easily by permitting its use only outside the firewall on laptops or iPhones, for example — or that it will be a broadband hog. Considering the low cost of new broadband circuits, that, too, is a specious complaint.

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