A new book by Nicholas Carr, called 'The Big Switch – rewiring the world, from Edison to Google', due to be published next Tuesday, predicts the takeover of firms' IT by the software-as-a-service (SaaS) model.

Carr argues that the cost benefit to firms, through use of large scale utility computing providers whose economies of scale would dwarf in-house efforts, will eventually lead to SaaS dominating firms' IT. Carr's timescale for such domination is imprecise, but he said, "It may take decades for companies to abandon their proprietary supply operations and all the investments they represent. But in the end the savings offered by utilities become too compelling to resist, even for the largest enterprises."

Butler Group analyst Rob Hailstone argued that such an end point will never be reached since IT is always going through some sort of gross movement from one extreme to another. "We've been through the whole centralisation/de-centralisation insourcing/outsourcing process so many times now," he said. "It's not one of these things that has an obvious endpoint, it's just the economics and the technology capabilities mean the balance is always shifting."

Hailstone said that a lot of firms would use "top up" services and probably outsource some of their IT, adding, "If you're dealing with a pure commodity, it doesn't make sense to run it yourself."

Quocirca service director for business process analysis Clive Longbottom pointed out that the biggest barrier to Carr's model of IT is mindset. "It's all theoretically feasible, but for large organisations in particular, it would be a very brave CIO and COO, who would go the whole hog - the first time there's a break in connectivity they'd suddenly say, 'Hell, we can't do anything at all!' "

Longbottom agreed with Hailstone that firms would be moving to a far more hybrid model. "But there'll be certain aspects and processes that define firms which they'll be unwilling to outsource because it's too important to them," he added.