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The author uses a power generation metaphor to indicate that as increasingly reliable networks make the physical location of computers less important. Services traditionally provided by internal IT departments can be acquired externally from service providers. This shift, as the author points out, reveals a common pattern: Standardization and technology advances permit specialization by individual firms resulting in economies of scale and higher service levels. 

 

Microsoft senior VP of research Rick Rashid remarked that 20% of all servers are being bought by a handful of large Internet companies, including Amazon, Google, Microsoft, and Yahoo. It's evidence that, behind all the talk about cloud computing, there are huge investments in server infrastructure.

 

Sun's CTO Greg Papadopoulos a couple years ago came up with a similar "red shift" theory, in which a few companies account for a disproportionate amount of IT infrastructure and consumption. An elite group of companies are acquiring inordinate amounts of IT infrastructure, well beyond most other businesses, and their demand is growing exponentially."

 

According to Papadopoulos, the red shift phenomenon threatened to exceed the ability of Moore's Law to keep up. Cloud is the answer.

 

Microsoft and Google are building new data centers. The tens of thousands of servers going into these new and existing data centers underlie the Web traffic and content of not just the companies running them, but millions of consumers and thousands of business customers. Increasingly, through virtualization and multi-tenant architectures, they're being used in support of cloud offerings such as Amazon Web Services, Google Apps Engine, and Microsoft's Azure services.

 

Amazon Web Services has established itself as a leader in the cloud computing market, and Microsoft has been playing catch-up. However, as Microsoft's Azure cloud strategy falls into place, it's sounding more like these would-be partners are on a collision path.

 

As the cloud computing becomes more promising, I agree that how cloud services should interact with existing IT and organizational systems will be the subject of managiement.    

   

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I agree with the idea that taking a risk and being an innovator in your industry can make or break a company.  If someone else takes the risk and succeeds, you could lose marketshare.  Also if you take the risk and fail, you could lose marketshare. 

Currently, Boeing has taken a risk with the 787.  The CEO has even described it as "betting the company".  While Airbus went for the super jumbo A380, Boeing believes the future of air transport is more centered around point to point trips instead of connecting through hubs.  Boeing's position makes sense judging from the success of the 737.  Let's see for which company the gamble pays.

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After doing more survies about Chapter 4, I found a more specific idea for which IT should do. It is on page 116-Development the Business Case for IT. It asks IT three questions, “Why this,” “Why now,” and “Why you.” As everyone knows, nowadays, the economic is very bad, so saving money is earning money. IT should know why they have to do this, if they think it is not necessary for the company, maybe they can save it and focus on more important project.

Also, I think IT should always think about what the important things they have to do now, if Boeing IT didn’t do this now, is it possible for causing some problems in the future. Like page 176, “In 2004, the leadership of Boeing’s commercial airplanes division assembled a team to begin analyzing how the new strategy would affect the airlines.” The “MyBoeingFleet.com” should be a good example for what Boeing’s IT did. Page 199 also mentions that “If the transition into the new frontier of services was risky, it was also inevitable.” I think it has another meaning beyond the words. It means if you didn’t take the risk, someone will, and if someone is successful, your company will disappear, so it is very important to think new.

 Finally, I think IT should think “why me,” it means I will be the person who change the company, if I do something new, I can achieve something different and something that no one have done before. It is a very important thing for Boeing IT to do.

The main point of these three concepts is that always thinking new and being creative. Boeing did a very good example when it made Boeing 747. Although, it spent a lot of money to develop this airplane, which almost let Boeing bankrupt, but it still insist to develop it. At last, it succeeds, and dominates the big airplane market for decades.

 

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Boeing wrestles with the problem of transiting fully into a service company. The company invests heavily in R&D and creates myriads of services under the auspices of e-Enabled Advantage program ranging from solution consulting to VPN access. The comprehensive nature of these services is an advantage but the company must cross the chasm and package a product, systems, or service that fit with the market.

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Great summary on Boeing IT efforts. Central to issues in this case is how to transit fully into a service company offering features and functions that are critical to business value. Boeing invests heavily in R&D and creates myriads of services under the auspices of e-Enabled Advantage program ranging from solution consulting to VPN access. The comprehensive nature of these services is an advantage but the company must cross the chasm and package a product, systems, or service that fit with the market.

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You mentioned an interesting observation: Boeing's implementation of e-enabled advantage not as a product but as a program, a way of doing things. This is laudable. However, one of the central issues in this case is how to transit fully into a service company.

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Here is my take on the e-enabled advantage: it is not a set of products but a program.
Central to issues in this case is how to transit fully into a service company. Boeing invests heavily in R&D and creates myriads of services under the auspices of e-Enabled Advantage program ranging from solution consulting to VPN access. The comprehensive nature of these services is an advantage but they company must cross the chasm and package a product, systems, or service that fit with the market.

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The e-enabled advantage is a program not a project. I do not think Boeing did a great job here. Though laying the foundation for execution, the company has not got the fit for the market.

Central to issues in this case is how to transit fully into a service company. Boeing invests heavily in R&D and creates myriads of services under the auspices of e-Enabled Advantage program ranging from solution consulting to VPN access. The comprehensive nature of these services is an advantage but they company must cross the chasm and package a product, systems, or service that fit with the market.

[More]

One of the central issues in this case is how to transit fully into a service company. Boeing invests heavily in R&D and creates myriads of services under the auspices of e-Enabled Advantage program ranging from solution consulting to VPN access.

[More]