Commoditization has become a familiar concept in the ever-evolving landscape of information technology. From personal computers to smartphones and extending into the enterprise realm with databases and cloud systems, the ability to swap these technologies based on price and support services has been well-established. But the question now arises: Is artificial intelligence (AI) reaching this point of commoditization? Opinions on this matter are diverse.
Commoditization refers to the process where products or technologies become widely available and interchangeable, leading to the democratization of these offerings. When a product or technology reaches this stage, it no longer provides a competitive edge to enterprises, similar to how a well-wired electrical system is essential but not a differentiator. AI tools and platforms, especially generative AI, seem to be heading in this direction. With their widespread availability at little to no cost and increasing use across the board, AI may no longer offer a significant competitive advantage.
Reflecting on this phenomenon, Nicolas Carr, author and former editor of the Harvard Business Review, highlighted two decades ago in his work "Does IT Matter?" that IT had become a utility that everyone is expected to have. The affordability and availability of technology have leveled the playing field, eliminating the competitive advantage it once provided. This observation also rings true for AI; as it becomes a commodity, the focus shifts from the technology itself to how companies utilize it to produce processes and business outcomes.
Brian Fitzgerald, chief revenue officer at Augury, draws a parallel between AI and the evolution of e-commerce. Initially, e-commerce was a significant differentiator for companies, but today, it's considered standard and simply called shopping. AI will likely follow a similar trajectory, moving from a buzzword and novel enhancement to a standard expectation in business processes.
Furthermore, Scott Cook, Andrei Hagiu, and Julian Wright suggest in a recent Harvard Business Review article that while some companies may temporarily gain an edge by leveraging publicly available generative AI tools more effectively than their competitors, this advantage will be short-lived. As using these tools becomes a basic requirement, established companies must rethink their business strategies and find new ways to add value to their offerings.
This discussion raises important questions about the future of AI in the business world. As AI becomes more accessible and its novelty wears off, how will companies differentiate themselves? Will the focus shift from technology to the innovative application of AI in creating unique business outcomes? How will this commoditization impact the competitive landscape across various industries?
I invite you to share your thoughts and insights on AI's commoditization and its implications for the future of technology and business strategy.
Read the article: https://www.forbes.com/sites/joemck...ill-fade-from-view-by-design/?sh=4a58819c7769
Commoditization refers to the process where products or technologies become widely available and interchangeable, leading to the democratization of these offerings. When a product or technology reaches this stage, it no longer provides a competitive edge to enterprises, similar to how a well-wired electrical system is essential but not a differentiator. AI tools and platforms, especially generative AI, seem to be heading in this direction. With their widespread availability at little to no cost and increasing use across the board, AI may no longer offer a significant competitive advantage.
Reflecting on this phenomenon, Nicolas Carr, author and former editor of the Harvard Business Review, highlighted two decades ago in his work "Does IT Matter?" that IT had become a utility that everyone is expected to have. The affordability and availability of technology have leveled the playing field, eliminating the competitive advantage it once provided. This observation also rings true for AI; as it becomes a commodity, the focus shifts from the technology itself to how companies utilize it to produce processes and business outcomes.
Brian Fitzgerald, chief revenue officer at Augury, draws a parallel between AI and the evolution of e-commerce. Initially, e-commerce was a significant differentiator for companies, but today, it's considered standard and simply called shopping. AI will likely follow a similar trajectory, moving from a buzzword and novel enhancement to a standard expectation in business processes.
Furthermore, Scott Cook, Andrei Hagiu, and Julian Wright suggest in a recent Harvard Business Review article that while some companies may temporarily gain an edge by leveraging publicly available generative AI tools more effectively than their competitors, this advantage will be short-lived. As using these tools becomes a basic requirement, established companies must rethink their business strategies and find new ways to add value to their offerings.
This discussion raises important questions about the future of AI in the business world. As AI becomes more accessible and its novelty wears off, how will companies differentiate themselves? Will the focus shift from technology to the innovative application of AI in creating unique business outcomes? How will this commoditization impact the competitive landscape across various industries?
I invite you to share your thoughts and insights on AI's commoditization and its implications for the future of technology and business strategy.
Read the article: https://www.forbes.com/sites/joemck...ill-fade-from-view-by-design/?sh=4a58819c7769
