Proprietary technologies are unique to one company and under its control. For instance, if a pharmaceutical company possesses a patent for a particular compound essential to a drug, it is considered proprietary technology. On the other hand, infrastructural technology proves more advantageous when shared and used by multiple organizations instead of being limited to only one.
While one company possesses the exclusive rights to construct railroads and highlight infrastructural technology, it is more advantageous for the economy when this technology is shared. By allowing multiple companies to build railroads, it enables connecting a larger number of buyers and sellers. Nevertheless, there are benefits in maintaining proprietary technologies.
According to Ben Bernanke, the IT revolution is still in its early stages as computing speed and memory continue to improve. However, IT is completely different from industries like transportation and electricity. Carr argues that IT has become a commodity due to its affordability for everyone. He emphasizes that using commodities does not give a competitive advantage, and he believes that IT has become commoditized for the following reasons:
- IT is highly replicable
- The arrival of the internet has accelerated the its commoditization
- IT is subject to rapid price deflation I agree with Carr’s assessment on the commoditization of IT to some degree.
It is illogical for organizations to spend money customizing a product when a similar product can be purchased at a good price. Nowadays, organizations no longer develop their own applications; instead, they opt to buy ones that are readily available in the market, like Microsoft Office. I disagree with Carr’s assertion that companies like IBM and Microsoft have positioned themselves as IT utility companies because more businesses are replacing customized applications with generic ones. The internet has contributed to the commoditization of IT by offering an ideal platform for delivering generic applications. As a result, more and more organizations will meet their IT needs by purchasing web services for a fee.
