The document summarizes a presentation on hosted IP services and how they relate to Nicholas Carr's theory that IT no longer provides strategic advantage. It discusses how hosted IP services represent a fundamental shift in the ITC industry by allowing companies to outsource non-core IT functions. Examples are provided of how hosted services can enable business functions like mobility, disaster recovery, and multi-site unification. Early adopters are said to value the cost savings and focus on their core business that hosted services provide.

1. Case Center and Syracuse Technology Garden present:
The Syracuse Technology Roundtable

2. For years now, the rally cry to the creative has been…
Think Outside The Box”
“
My message …STOP THINKING ABOUT THE “Box”!
My prediction …In 10 Years “Hosted Everything” will be the
way businesses acquire technology-based services
My belief …We are witnessing the birth of a new industry
…the HSP (Hosted Services Provider)
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3. Presentation Summary
Chances are you have heard the term Hosted IP Services touted
as the latest voice and data technology…what are they?
How do Hosted IP Services relate to the controversial ideas put forth
by Nicholas Carr in his article “IT Doesn’t Matter”?
Is this just another Fad fostered by vendors to generate new
business or is there something more going on here?
We’ll discuss what services are available today, where the industry
may be headed and some things to think about back at the office
3

4. Presentation Summary
Chances are you have heard the term Hosted IP Services touted
as the latest voice and data technology…what are they?
How do Hosted IP Services relate to the controversial ideas put forth
by Nicholas Carr in his article “IT Doesn’t Matter”
Is this just another Fad fostered by vendors to generate new
business or is there something more going here?
We’ll discuss what services are available today, where the industry
may be headed and some things to think about back at the office
Expanding The Definition of IT ..to include Communications
Information Technologies often refers to hardware and software that support a computing
infrastructure. To fully understand what is happening in the Converged Network, we must
expand that definition to include Communications as well…or what I call ITC
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5. What are Hosted Services?
Computing What Are Hosted Services?
A 'hosted service' is one in which the application is
run on a central server and accessed by users
Infrastructure Information over a broadband pipe
Remotely delivered application services using
shared resources
Communications The primary advantage [today] is that no capital
investment or technical expertise is required from
Hosted Services the business
The HSP provides all operational aspects
including security, software upgrades, server
admin, backups, and fallback procedures
A Hosted Service Provider is a business that delivers a combination of
traditional IT functions over the Internet or other wide area networks
Enables customers to consolidate and outsource much of their IT needs for a predictable
recurring fee or subscription
provide economies of scale, delivering the same software and services to many
customers at once
5

6. The “Shock Jock” of Technology Change
Nicholas G. Carr is a consultant, business writer and speaker
whose work centers on strategy, innovation, and technology
In 2003, then Editor-At-Large for Harvard Business Review, he
wrote an article entitled “IT Doesn’t Matter”
His views roiled the Information Technology industry, spurring
outcries from executives of Microsoft, Intel, H-P and other leading
technology companies
“Don’t listen to this guy…keep the faith in IT…”
- Steve Balmer
Microsoft's Paul Flessner says: "It's just silly to think that there's no
competitive advantage in IT. It's insanity in my mind."
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7. “IT Doesn’t Matter”
The Central Theme: “There is nothing all that special about information
technology”
He argues that IT has been commoditized…that its become practically invisible; that
IT no longer matters
“Does IT Matter?"
He argued that the strategic importance of information technology in business has
diminished as IT has become more commonplace, standardized and cheaper.
"The End of Corporate Computing"
That in the future, companies will purchase information technology as a utility service
from outside suppliers.
7

8. “IT Doesn’t Matter”
The Central Theme: “There is nothing all that special about information
technology”
He argues that IT has been commoditized…that its become practically invisible; that
IT no longer matters
“Does IT Matter?"
He argued that the strategic importance of information technology in business has
diminished as IT has become more commonplace, standardized and cheaper.
"The End of Corporate Computing"
That in the future, companies will purchase information technology as a utility service
from outside suppliers.
“When a resource becomes essential to competition but inconsequential to strategy,
the risks it creates become more important than the advantages it provides.”
- Nicholas Carr
8

9. So What? ..That Was Four Years Ago
Four years later, the controversial subject still generates heated
debate regarding its accuracy and relevance…
“Nicholas Carr” returned 2.1m Google hits
“IT Doesn’t Matter” returned 126m Google hits
The provocative issues and incendiary rhetoric in this piece ignited a
worldwide debate on the strategic value of information technology in
business
With his follow-up books, blogs and articles Carr has renewed and
deepened that debate and become one of the business world’s most
significant voices
“Carr’s article just won’t stay debunked.”
- Robert Metcalfe
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10. What I Believe He Was Saying
The title is misleading…Carr is not arguing that Information Technology
doesn’t matter…of course it does
As IT Technologies mature, spread and become more standardized, the
strategic advantage any individual company can gain from that technology
diminishes
You only gain a strategic edge over rivals by having or doing something can’t
have or do
Today, most IT-Based competitive advantages simple vanish too quickly to be
meaningful
Many IT Technologies are no longer a potentially strategic resource…they
are being transformed into a commodity factor of production
Essential to competitiveness but inconsequential to strategic advantage: that's
why certain technologies are best viewed (and managed) as a commodity
To help explain this, he introduces the concept of two categories of
technology
Proprietary and Infrastructural
10

11. Carr’s “Two Technology Types”
Proprietary Infrastructural
Can be owned by a More mature & widely
single company available
Technology
Proprietary
Exclusive rights, patent Guided by standards
Te
ch
Innovative way to Viewed more as
no
log
yC
ur
employ a technology “plumbing”
ve
Competitors find hard Part of the general
Infrastructural
Technology
to replicate business infrastructure
Can be a foundation More value when shared
for long term strategic than when used in
advantages isolation
THINK: Google Search THINK: Ethernet / IP
In addition to enabling new, more efficient operating methods, infrastructural
technologies often lead to broader market changes.
Here, too, a company that sees what’s coming can gain a step on myopic rivals.
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12. Carr’s Underlying Concepts…not new stuff
What Carr was talking about or predicting is actually the
confluence of a number of existing theories:
The Law of Disruption and The Disruptive Innovation Model
First introduced in the book “Unleashing the Killer App”
• Moore’s Law + Metcalfe’s Law + Coasean Economics
Further developed in “The Innovator’s Dilemma” and “The
Innovator’s Solution”
• The dichotomy of Sustaining vs. Disruptive innovations
These theories are playing themselves out today in the ITC
Industry…fueling the rapidly growing concept of Hosted IP Services
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13. The Type Types Of Innovation
Sustaining vs. Disruptive
Sustaining innovation improves
the performance of existing
products along the dimensions
that mainstream customers
value
Disruptive innovation will have
characteristics that traditional
customer segments may not
want, at least initially
Early on, such innovations will appear as cheaper, simpler and even with
inferior quality if compared to existing products, but some marginal or new
segment will value it
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14. Today’s Infrastructural Technologies
Wide Area Access Networks Messaging
Both voice and data Email, voicemail, fax, IM, etc
Business Voice Systems Data Storage
PBX’s & Key Systems Online, offline, backup, archival
Core IP Infrastructure Security
Layer 2 & Layer 3 devices SPAM, Firewalls, IDS/IPS, etc
Voice & Data Services Business Applications
Local, LD, 800, Internet, MS Office Suite, SFA, CRM,
VPN, DNS, etc ERP, etc
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15. The Business End of Hosted Services
The great thing about Hosted Services is that it maps
very well to business initiatives such as
Cost Savings - reducing system acquisition & management
costs
Improving worker productivity
Flexibility - facilitating User/IP mobility
Risk Management & Disaster Planning - maintaining business
continuity
Integration & Control - Unifying Communications
Other business services can be built around vertical
industries like healthcare, education, hospitality,
government, law firms, professional services, etc.
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16. Example – Multi-Site Unified Network
SITUATION
A High-Tech Mfg is growing quickly via acquisitions and needs
to integrate operations quickly and cost-effectively. Also, their
culture is steeped in “Work-Force Flexibility” requiring creative
use of technology
SOLUTIONS
Identical phone sets, features & Interoffice Dialing
Single IVR, Voicemail and ACD System
Geographic Abstraction of Telephone Numbers
Hot-Desking and Cell-Twining
Remote Office Solutions
• Remote Call Centers and Agents
• Regional & Small Office/Home Office
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17. Example – User Mobility
SITUATION
A Sales-focused company with 40+ professionals on the road
calling on regional clients relies heavily on communications
between its clients, sales force and HQ
SOLUTIONS
Single Number Service – Simultaneous Ring
Multi-Number Service – Personalized Agent
Find Me/Follow Me – Unified Communications
Cell Twining and Cell Cloning
Telecommuting with Voice & Data VPN’s
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18. Example – Hosted Messaging
SITUATION
A very large Community College provides extensive information to its
students using a premise-based IVR. However, it frequently is
unavailable due to high call volumes and can also block in-bound &
out-bound voice calls. Very antiquated and needs to be replaced.
SOLUTIONS
Hosted Messaging – IVR & Voicemail
Number Portability – No need to change
Burstable Voice Bandwidth – Virtual expansion for high traffic
Management Portal – Web interface from anywhere
Service Creation Environment – Object based changes
Real-Time Schedule Integration – via simple vXML
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19. What the Early Adopters Are Saying…
"We can focus on our core business.”
Smart companies focus on growing their business and not on managing
complicated office systems.
"We can easily add/manage office locations."
Hosted IP systems are designed to treat multiple locations as one office…for
example, the ability to share a centralized receptionist and use four-digit dialing
between locations.
"We're guaranteed access to the latest technology."
Hosted IP providers handle software upgrades at no additional charge.
"Hosted IP satisfies our business continuity & disaster-recovery needs."
Hosted providers house their equipment in carrier-grade collocation facilities with
high levels of resiliency, back-up power and advanced safety features. An IP PBX
resides in the client's office where it is susceptible to emergencies such as fires,
floods or natural disasters.
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20. Hosted IP Services - Stages Of Value
Stage 1 Stage 2 Stage 3
Business Enablers
& Growth Drivers
Productivity & Convenience
Cost & Control
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21. Hosted Services…the key messages
Hosted IP Services…
is the business of housing — and managing — the
Infrastructural Systems that run a business
is NOT a Fad…it represents a Fundamental Shift in the
ITC Industry
• There are several immutable technology and economic laws at
work
are Evolutionary…not Revolutionary
• This is NOT an “All Or Nothing” proposition
are NOT “Futures”…
• You can use them to create completely new services…Today!
Are you ready?
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22. One Final Thought…
“Decide what is Core to your company --
absolutely critical, strategic…
strategic
Your Competitive Advantage -- and then
outsource everything else”
- John Turner (Aug, 2007)
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23. Q&A
John Turner
EVP and Chief Strategy Officer
USA Datanet
jturner@usadatanet.com
318 S. Clinton St.
Syracuse, New York 13202
Phone:315-579-7105
Fax:315-579-7201