One simple phrase, I believe, expresses the new groundrules for IT resulting from the convergence of computing with the Internet. This is Wainewright's Axiom:
"Think access not assets"
Before the Internet came along, businesses and individuals that wanted instant access to computing had no choice but to own and operate it on their own premises. Now they have many other options. They can still own the computing assets but have them remotely managed by others or located in a third-party data center. Or they can pay to use computing that's owned and operated by a service provider.
With each of these different possibilities, the key question becomes, "What gives me the best access to the functionality I need?" measured in terms of performance, availability and security. The more accessible that external services become, the fewer advantages there are in owning proprietary infrastructure. There are cases where ownership still ensures the best access. But in many cases, it makes it worse:
Users need access to collaborative systems such as email and Internet servers 24x7, 365 days a year. Few companies can afford the internal resources to achieve such high availability.
Because of skills shortages, many companies struggle just to keep internal enterprise systems and desktops running throughout the business day. Downtime denies users access.
Investment in an existing system limits a company's freedom to access alternative computing resources as they become available.
Lack of investment in external connectivity impedes access to the expanding range of services available from third-party providers.
Although ownership is the norm today, the shift towards accessing computing as a service is already under way. Once the shared, IP-based infrastructure of Internet computing has completed its evolution into a robust, commercial-grade system, access will become the predominant consideration in IT strategy. Enterprises will want providers to be able to manage services throughout their entire computing infrastructure, within a contract framework that holds them wholly accountable for the quality of access users experience.
Once confidence in the service provider model has been fully established, ownership will ultimately be seen as a high-risk option of last resort, best left to the infrastructure and application service providers whose core business is the provision of computing services.
Asset Risks for Providers
Infrastructure providers undertake a high-risk business. High margins are available only in the early years of innovation. Since infrastructure aims to be efficient, it always converges on commodity architectures. Long-term survival depends either on achieving the highest economies of scale, or on continuing to innovate new enhancements and preferably both.
For providers at the application layer, striking the right balance between access and assets will be a crucial success factor. They must maximize their openness to third-party services to be able to access the innovations of others as soon as they become available. Equally, they must make their own services as accessible as possible to others.
In a connected world, investment in infrastructure assets is always at risk of being devalued by the advent of innovative new services that supplant some or all of their functionality at a lower cost of access. Allowing for that risk, owning computing assets still has some value in these cases:
When the security risk of using a service provider outweighs the cost of ownership
When ownership delivers enhanced performance without impeding access to external services
Where there are sufficient economies of scale to maintain performance cost-effectively
When the assets are a proprietary innovation that can be marketed as a service or product to others
Increasingly, the lowered cost and enhanced performance and adaptability of externally-delivered services will diminish the value of owning computing assets for all but the largest or most specialist of organisations. IT managers will soon be making it a priority to develop a strategy that emphasises access to external service providers rather than acquiring ever more complex computing infrastructure they will think access not assets.
Phil Wainewright founded ASPnews.com in 1998 and is the publisher of Loosely Coupled. He can be contacted at