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IT is about to meet the Amazon Effect

Steve Duplessie | June 6, 2013
IT upheaval is inevitable— like it or not.

Five years ago, we were all going to stores when we wanted to buy something, just as our ancestors had done since at least the 1600s. Merchants needed to have storefronts and a place to house inventory, along with people to manage those stores of inventory — all just in case you were to come by looking to buy something. How medieval!

Enter Amazon. Its business model (perhaps never stated exactly this way) was: "We're just not going to do it that way anymore. We're going to use this technology called the Internet and enable you to buy whatever it is you want while you sit on the toilet." No bricks, no mortar, no fuel, no time, no kidding.

And everything that came before is now extinct. Just like that. Out with the old, in with the new — because a new business model that enabled a new consumption model decimated the old way. The amazoning of retail.

Along the way, entire new ecosystems evolved that couldn't have prospered in the old world. The UPS guy comes to my house every day with a box from Amazon. I kid you not. Amazon and its business model revolutionized package delivery and logistics. I don't even pay per shipment. The Amazon business model has caused downstream upheaval that allows me to pay one fee per year — $75 — and I get my stuff shipped second-day free. Somehow UPS makes money where no one could previously in this model. The amazoning of package delivery.

So while the IT Industry says, "It can't happen here," it's inevitable. It's ignorant to think otherwise.

The IT business is a 60-year-old, boring, staid, predictable business where the bulk of the money made on the vendor side is well known and predictable, and the way buyers consume goods and services is equally well known and predictable — with neither party outwardly willing to give up the old ways it has come to love so deeply. Uh-oh, seems like this industry might just be ripe for a good old-fashioned amazoning.

Some people are blind to this, even though Amazon is actually in the IT space. But that is not the reason IT will be amazoned. The reason it will be turned on its head in short order is that someone (more than one, actually) will figure out that it's about the business-model and consumption-model disruptions that will be brought to market that will completely ruin a half-century or so of dominance of a few vendors. Amazon the Retail Slayer enabled millions of retailers to play where only a handful could play before. The same can happen in IT. Some will grow massive, others will shine as ancillary benefactors. Maybe a few of the big guys will ride the wave and survive — but certainly not all of them. The revolution is on.

 

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