Could be. Nobody's moved down there for weeks and the stink is awful.

No seriously. A new Nicholas Carr book predicts utility computing will replace internal IT shops. http://www.networkworld.com/news/2008/010708-carr-it-dead.html

The IT department is dead, and it is a shift to utility computing that will kill this corporate career path. So predicts Nicholas Carr in his new book launched Monday, "The Big Switch: Rewiring the World from Edison to Google." Carr is best known for a provocative Harvard Business Review article entitled "Does IT Matter?" Published in 2003, the article asserted that IT investments didn't provide companies with strategic advantages because when one company adopted a new technology, its competitors did the same.

This is called "table stakes". If you can't put in the table stakes, you aren't even in the game. He also ignores that first adopters of any given technology gain a marginal strategic advantage.  Hell, substitute "self-propelled vehicle" for "IT department". By his argument, horse-and-buggy delivery is strategically viable for most companies. Actually early adopters will simply improve their operational effectiveness in relation to the competition, this is not the same as strategic advantage, Michael Porter discusses this rather nicely in his November 96 article in Harvard Business Review. As the competition adopts the technologies you had adopted earlier their operation efficiencies will match yours and there will be a gradual erosion of the advantage that you have. A strategic advantage is something which cannot be easily duplicated by the competition.

Even if business spin off IT into the cloud, what then? Unless they're going to go for an all-in-one solution, it means someone is going to have to manage this. I agree that in the long-run we'll probably see a reduction in the number of IT staff for certain kinds of companies, using hosted apps, and outsourced IT. Heck I know quite a few mid-sized companies that contract out their IT services already, but there's a downsize to that. These same companies are looking to hire me, because their outsourced company cannot keep up.  I've heard of customer complaints because the network is down, and their contracted IT company takes a day or more to get out there to fix the problem. That's the one advantage of an in-house IT department, you tend to get pretty fast response times.

Nicholas Carr is over hyped and doesn’t know what he is talking about, if we stop talking about him maybe he’ll go away.