(You know, I once thought Fatal Exception was a quirky title for a column, but now I realise it’s just an accurate description of the cognitive processes of its author.)

McAllister writes:

Ask any company that hosts an open source software project how many outsiders actually commit code changes on a regular basis and you’re likely to hear a discouraging figure.

His conclusion is that low uptake makes opening APIs a high risk activity. That’s as may be, but isn’t it equally possible that these organisations aren’t successful because they’re doing it wrong?

Unless I have some kind of moral ownership stake in the project (such as I might have if I maintained a Linux software package, for example) what incentive to I have to invest my time? I understand the reasons for it, but many large businesses today are notoriously unreliable when it comes to strategy. Driven as they are by quarterly returns and subject to the whim of an increasingly sociopathic class of managers driven by MBA culture to abstract all decisions into monetary terms, why in the hell should I, the lowly FOSS developer, want to hitch my wagon to their star?

(More accurately, they’re asking me to hitch my horse to their wagon, without giving me any say on the destination or even the route.)

There are a few organisations who really get how community relations and management work, but they are a tiny minority. The overwhelming majority baulk when they come to the realisation that FOSS means sharing ownership and control.

None of this is news to us geeks. What gets me riled up about this article is that someone who should know better spends his time chiding FOSS processes for being inappropriate to business status quo instead of explaining to business how they’ve got to adapt to a new set of circumstances.

The reason McAllister doesn’t want to say that is because he’s holding out for a new set of actors in the online world: Middlemen who build out standardised (but presumably proprietary) API and data management services for small and medium businesses so they can keep up with the Amazons and Tescos of the world without having to build their own data infrastructure.

McAllister is, in other words, trying to reinvent the Distributor in an environment that was invented precisely to remove the need for intermediaries. My only response is to apply an aphorism from another age of commercially appropriated social phenomena: ‘You’ve come a long way, baby.‘

That said, it’s hard to imagine how this essay by Nicholas Carr could be more wrong. While his analysis is dead on, his conclusions consist of little more than wishful thinking.

From his post:

“The fundamental problem facing the news business today does not lie in Google’s search engine. It lies in the structure of the news business itself.”

This is exactly right. The digitisation of publishing and distribution militates strongly in favour of bytes over atoms. While holding a newspaper in one’s hands is not without a certain appeal, the desire for specific information, delivered quickly and at low cost, trumps the old approach most of the time.

Carr thinks the problem is supply, and he’s right, as far as that goes. But he’s dreaming if he thinks there’s any practical way to arbitrarily limit supply in an economy defined by ubiquity and ease of access. The problem is mechanical in nature: Bytes are infinitely replicable and transportable. Reducing the number of bytes requires that we control all sources of replication and I can’t see this happening even in a police-state online environment.

Most of Carr’s arguments are predicated on the all-too-long-lived idea that one can make money by attracting an audience, holding it and throwing advertising at it. I blame Bob Metcalfe for that.

I vividly remember one keynote address at the 1999 World Wide Web Conference in Toronto, given by Bob Metcalfe, the technological whiz who helped to invent modern computer networking and founded 3Com.

Bob had this nice tight little riff he’d made up, wherein he announced that in order to thrive on the web, a company had to eyeballize, memberize and then monetize their website. His message, as much as any other, epitomised the Oklahoma-land-rush feeling at the time, where people grabbed turf first and asked questions later.

Unfortunately, some of those questions were rather nuanced. Like, for example, ‘do you not like ads at all, or do you just not want to be distracted while you’re reading online?’ Google found the answer to that. Go.com, MSN and others did not, to their chagrin.

The first and biggest question that needs to be asked – and Carr gets close to it when he observes that syndication is a game that newspapers can’t win – is the question of uniqueness and what Flickr.com calls ‘interestingness’. Flickr is so invested in measuring what’s interesting to people that they’ve developed a proprietary algorithm that measures popularity, novelty, and depth of interest (i.e. is it glister or gold?). I’m not convinced that we have to go to such lengths, but we’d all do well to consider what it is that most engages our audience.

Carr is right to toss a word of warning to the AP and related services. They need to adjust to the fact that newspapers are no longer their market, and to the fact that the generic pabulum that makes up the majority of their content is of limited appeal to a global Internet audience.

Kos recently proposed that newspapers should quit being generalist wire service aggregators, that they should focus instead on quality local content. I agree with him, with two provisos:

- Doing so requires a re-evaluation of the inherent value of the publication. How unique, in other words, is too unique to be commercially viable? For most large urban newspapers, the answer is clear enough – local stories of national and international interest, coupled with localised, specialised services for their particular urban area. For smaller pubs, this question is problematical, to say the least.

- There is still a role for the coffee-time aggregator. Introducing one’s audience to a focused distillation of a vastly larger information pool is a useful service, one that Google can never adequately provide. Blogs do it well, but there’s still a place for a dead tree version, provided that ‘interestingness’ is carefully measured. (Example: Harper’s Index and its Readings section are both fabulous aggregation services.)

Nick Carr and others need to take note: The Internet operates in an economy of plenitude and nothing is ever going to change that. Finding a place in it will be an uncomfortable and sometimes disappointing exercise for many – but not all – print publications.

The solution, if they choose to recognise it, is not to stand like Canute among the waves and order back the tide. The secret is to find news, analysis and insight that is in short supply, and to add it to the flood.

My fundamental objection to online payment is that most people won’t pay for something of unknown value. Speaking for myself (and a few others I know), the moment a website starts putting obstacles between me and the content I want to access, it’s easier for me to move on than it is to leap whatever interface hurdles are barring my path.

That’s because:

1. I refuse to buy something sight unseen. In the material world, I can at least take a look at the package and compare with a few competing products before I pull out my wallet. On the Web, I can’t really know whether something is worthwhile until I’ve had a look. For a bit of writing of less than 5000 words, that means I need to see most – if not all – of it before I decide what it’s worth to me. For a short video, that means all of it. (The mere idea of a trailer for a 15 minute video makes me shudder.)
2. The whole point of micro-payment is that the amount is ‘throw-away’ money. Increments so small that we don’t even have to think about it. Forcing someone through the UI equivalent of a toll booth creates an impediment that’s out of scale with the benefit.
3. As I mentioned before: Online payment is not really payment, it’s reward. So much comes free with the price of admission (i.e. an Internet connection) that the only way we can assess the value of content is in the context of a gift economy. Think of it as a pay-as-you-exit performance, or busking, if you like. Modulo a few stingy, poorly socialised freeloaders, anyone who really enjoyed the show will happily toss a few coins into the hat. But not before they’ve seen the show.

To sum up: It’s best to leave interface and program flow issues alone until we’ve established the proper intellectual framework. Conceptualising a rewards system generates very diffierent results than a payment system. Given that reward and payment systems are both easily circumvented, the only thing we can rely on is the visitor’s goodwill. Place a little box at the exit, allow people to click right past it if they want, and you’ll never have any complaints about access to data.

More to the point, everyone who gives, gives gladly. This is more than just a moral point. The importance of goodwill from one’s website visitors cannot be understated. Remember: karma comes first, reward later, when it comes to online success. In fact, karma is the primary reward. Cash is just a symbolic representation of the goodwill people feel toward you.

I suspect that some manifestation of the Endowment Effect underlies most efforts to control access to online content. It’s irrational in the online context, but it’s human nonetheless to say, “I worked hard to produce this. I have a right to be paid for it.”

Those of us who have more or less grown up online have fewer reservations about the benefits of sharing content without precondition, and I suspect such expectations will become the norm for at least a significant subset of society before too very long.

We need fiber, and we need it soon.

No, I’m not talking about changing the nation’s diet. I’m talking about fiber-optic cable. Made of very long strands of glass fiber, this kind of cable has the unique ability to allow light to turn corners. This means that we can shoot tiny laser pulses into one end of it and have them emerge intact from the other end, even if it’s thousands of kilometers away.

The result? Fast, very high-capacity communications become possible. In laboratory experiments, researchers have achieved rates of up to 14 trillion bits of data per second. Current commercial implementations don’t go nearly that fast, but even a single thread of fiber a few millimeters wide can carry billions of bits every second. Just a few strands would be enough to increase Vanuatu’s total available bandwidth to a large multiple of its current capacity.

So what’s the catch? Why haven’t we invested in a fiber connection yet? Fiji has it, and so does New Caledonia. Why not Vanuatu?

The stock reply is that it’s too expensive right now. But that answer is a little too pat. In order to understand how why nobody has done more than contemplate a fiber link with the rest of the world, we need to understand a thing or two about large-scale projects.

The Christmas edition of the Economist magazine features an article examining the results of the recently collapsed US housing bubble. The author writes that when there’s a boom in investment in material goods (as opposed to finance funds or other services), the prospect of benefits down the line sometimes create a speculator’s market.

People invest large amounts of money, often more than the actual long-term value of the goods produced, but rationalise it by their investment’s resale value. In Florida in the 1920s, land speculation reached such a fever pitch that some people were buying vastly inflated properties and flipping them the very same day.

When the bubble finally did collapse, investors lost their shirts. But that was inevitable; the amount of money invested was way out of line with the actual value of the properties. People’s perception of the properties’ value lost touch with reality.

Most people take a pretty simple (and valid) lesson from this: Avoid speculative investments. Don’t bet the farm and you won’t lose it.

But what happens when the potential benefits of a speculative venture could change the economic landscape? The channel tunnel linking England and France, the Panama Canal and the Golden Gate Bridge were all immense undertakings that opened new doors to business, but whose cost made even the most stout-hearted blanch.

The channel tunnel’s construction was backed by a bond issue, but because of cost overruns of nearly 80% of the original estimate, the tunnel operator has faced chronic financial difficulties. The first attempt to join the Atlantic and Pacific oceans by a French consortium failed in 1898. The US took over, and justified the immense cost for strategic reasons. The Panama Canal vastly improved America’s ability to project its naval power in the region. Begun during the Great Depression, the Golden Gate Bridge was underwritten entirely by the San Francisco-based Bank of America. The last bridge bond was paid off in 1971, a full 37 years after the bridge was completed. In 2006 its operating deficit was estimated at $80 million for the next 5 years.

In each case, the project was (or became) a labour of love for the investors. But the benefit to the larger community was immense, and of enduring value. And this is exactly the point that the Economist makes. Whatever fond hopes prompted people to commit, and whatever the fate of investors, the edifice remains and is still innately valuable.

Given the size of our respective economies, laying a fiber cable to Vanuatu is similar in scale to each of these projects. For some years now, people throughout the Pacific region have been weighing the benefits of fiber optic links against the relatively large financial investment required.

The problem has been sliced, diced and analysed nearly to death. I’d hesitate to say, though, that we’ve really come to grips once crucial detail: The government of Vanuatu simply can’t pony up the tens of millions of dollars required. So who else could pay?

The cost of laying a cable between Port Vila and Nouméa (the nearest location with existing fiber) would cost in the tens of millions. Annual operating fees would likely be in the millions as well. But compared to satellite communications, the cost per megabyte of pushing data over such a link would be much lower.

That’s one reason to move. But what happens to significant investment in infrastructure that our carriers have already made? In Digicel’s case, they’ve only just started to see a return on about $30 million invested. Given the state of financial markets today, would cost savings be enough to motivate them to turn around and drop half as much again – possibly more – so soon after their initial outlay?

TVL may be better positioned to consider this. They’ve been investing heavily in recent months, but that’s consisted mostly of incremental improvements to their existing infrastructure. Arguably, they wouldn’t face as much difficulty integrating fiber into their plans.

Laying the cable isn’t the end of the investment, though. Vastly increasing the size and the quality of our link to the outside world is one thing, but we have to be able to use it. The price of connecting to TVL’s urban fiber loop here in Vila is shockingly high right at the moment. I’m aware of few businesses that have even contemplated purchasing a link. Wireless Internet services from several providers will be rolling out soon, but we don’t know yet what access speeds they’ll be offering, nor what value-added network services they intend to provide.

A Vanuatu-based investor in fiber faces a bit of a chicken-and-egg scenario. Local bandwidth won’t increase radically until international capacity does, but if you increase international capacity via a fiber link, you sure as shootin’ don’t want to wait years for the market to mature.

Normally, this is where government steps in. They guarantee a loan (or offer some kind of concessionary deal) that allows the investor to recoup their outlay over a longer period of time. As I’ve said, though, the government of Vanuatu can’t do that. They manage their financial house moderately well, but there’s no such thing as extra cash in their budget.

The government could bring tools other than financial into the mix, though. By exercising a little regulatory discretion they could help create an environment that rewarded long-term thinking while at the same time ensuring that this new resource is open and accessible to all.

The bottom line is this: The economic benefits of a fiber-optic connection to the outside world cannot be overstated. But it’s got to be seen as a labour of love. The benefits to be derived from the operation of the cable itself might never be great. If it’s not managed properly, the cost of failure could be high indeed. That said, the knock-on benefits to the community are numerous.

Call center services for European customers, online education, interactive tourism resources (video feed from the Nangol, anyone?), live video lectures from universities overseas, online consultations by medical specialists, offshore financial transaction processing… the list goes on and on. All of this becomes possible if we improve our basic infrastructure.

All we need is to find someone foolish – or far-sighted – enough to foot the bill.

There is only one thing worse than a badly played football match: a badly refereed match.

What makes a bad referee? Players the world over agree that it’s not strictness or laxity; what makes a referee really bad is when he’s inconsistent and unpredictable. The ref consistently calls offsides in favour of the defence? Not great for the strikers, but a team can adjust and try different approaches to the net. The ref calls them consistently in favour of the offence? Drop the zone defence and mark your man carefully.

But when neither team knows how the play will be called, it creates uncertainty, which leads to sloppy play and sometimes a little opportunistic cheating, hoping that this time the ref won’t call a questionable play.

This principle applies everywhere. In numerous business surveys, company leaders consistently report that continuity and predictability in economic management and government affairs matter more to them than the economic structures themselves.

As long as clear rules exist around ownership, trade and the economic environment in general, a well-run company will be able to find its way – and possibly to thrive – under just about any regime.

But a company that can’t predict what will happen tomorrow can’t plan effectively. And a company that can’t plan finds itself scrambling from one day to the next. It finds that it can’t commit – neither to its customers nor to its staff. When this uncertainty becomes generalised, with nobody willing or able to say what tomorrow holds, the business climate worsens all round.

The government of Vanuatu has made great strides in recent years in its efforts to make its bureaucratic components simpler and more predictable for all concerned. The primary purpose of this is to insulate the civil service from the innate turbulence of Vanuatu politics. By carefully channeling initiatives through straightforward but rigourous processes, the worst weaknesses of government instability are compensated for.

The days are long past when political infighting could result in the failure to table a budget, as happened under then-Prime Minister Barak Sope.

These reforms are invaluable, but not sufficient. The process of creating new laws and regulations requires the same kind of predictability and respect of process. Currently, there is next to none.

To be clear: The State Law Office generally does excellent work in drafting legislation. With a few notable exceptions, Vanuatu’s laws in recent years have been clearly scoped, defined and written. But State Law’s influence is limited to ensuring the legality and clarity of the bills they draft. They have no say at all over their contents.

What a Bill actually contains is entirely up to the Cabinet members and their staff.

So how, exactly, did the recent amendments to the Employment Act come about? To the best of my knowledge, there was little if any consultation with business, unions, civil society organisations or the general public. Whatever actually transpired, the near-panic expressed by a number of prominent business owners demonstrates that they were singularly unprepared for the Amendments’ passage in Parliament.

Contrast that with the policy and legislative review conducted by the Ministry of Infrastructure and Public Utilities. For years now, they’ve been talking, thinking, researching and sharing their views with anyone interested. Policy papers and proposed legislation are made available months before they enter Parliament. By the time a Bill arrives on the Order Table, people know exactly what’s in it, and what motivated the choices made.

Not every stakeholder agrees with every aspect of what gets enacted. But at least they know what to expect. The player doesn’t have to like the call, but she needs to respect the referee.

In any given election, about half of all elected MPs are new to Parliament. Efforts are underway to educate them in Parliamentary process and the roles and responsibilities of Members and Ministers. But we need more.

The real battle behind the Amendments to the Employment Act is not over their constitutionality. Nor has it to do with the Minister’s prerogative – and responsibility – to legislate matters of employment rights. It’s not the Minister’s responsibility to make everyone like what the Act contains.

The shock of latest amendments has done nothing but create uncertainty. They undermined confidence across the board. Businesses are increasingly tempted to perform an end-run around the rules, to sack their fulltime employees and require them to return as short-term independent contractors.

This means that such workers will get no severance at all. Worse, benefits like VNPF contributions become the employee’s responsibility. This will almost certainly undermine the Provident Fund. There will doubtless be other negative consequences as well. In short, the Minister’s unquestionably good intentions are being subverted by the lack of due process and consideration.

It is up to the Minister and the Government to ensure that Vanuatu’s market place is ruled fairly, clearly and consistently, according to rules that we may not all like, but we all agree to respect. The only way to achieve this is to create a clear, well-trodden path down which every piece of policy and legislation must travel before it becomes law.

Denis O’Brien, owner of the Digicel Group, graces the cover of the August 11th issue of Forbes Magazine. Their profile, titled ‘Babble Rouser’, begins with a tone of detached and vaguely supercilious astonishment at the risks that Digicel has incurred in the course of its lightning-quick expansion across the island nations of the world. It quickly sobers, though, when it reports that the Digicel Group earned $505 million in operating profit on $1.6 billion in revenue in the financial year ending March, 2008.

Forbes leaves it to O’Brien himself to explain his damn-the-torpedoes philosophy:

“Get big fast. [Damn] the cost. Be brave. Go over the cliff. [The competition] doesn’t have the balls.”

I suspect he used some word other than ‘damn’.

Most anyone would enjoy downing a beer with the honey-tongued chancer from Cork, but Denis O’Brien didn’t make the cover of Forbes merely because of a flamboyant devil-may-care attitude. He’s noteworthy because he saw an opportunity where others didn’t, and he got rich capitalising on it.

The idea is simple enough: If you give everyone – literally everyone – access to mobile services, you can make money everywhere. In O’Brien’s world, there is no such thing as low-hanging fruit. Every single market gets aggressively cultivated. The fruits of such labours are truly remarkable.

O’Brien is not the only one to have realised that there are fortunes to be made in places once considered unserviceable. Indeed, much of the government’s telecoms policy is predicated on the certainty that market forces will provide enough incentive to encourage well-funded entities like Digicel to invest in Vanuatu without requiring some sort of financial crutch.

The economic manifestations of Network Effects are becoming increasingly well understood in the business community. Indeed, it appears that TVL has been pleasantly surprised to find that mobile phone services were far from the money-losing service they first thought it would be.

The urge to communicate is fundamental to human nature, and people are willing to go to great lengths to talk to others. More willing, in fact, than they consciously realise. An early usage survey of an email network in the Solomon Islands showed that, contrary to expectations, well over 60% of messages were between family members exchanging news. Those messages cost about 50 vatu each back then.

Digicel is benefiting from this desire to communicate primarily because of its first-mover status and commitment to its chosen course. That implies a fair degree of risk, but risk is one thing the private sector handles better than most others.

Now, let’s not overstate things. Denis O’Brien is not the Oracle at Delphi. He’s simply better positioned than the majority of corporate leaders. What we have here is a corporation tapping new reserves in a market that most others considered unserviceable. The job of other CEOs, as they saw it, was to consolidate revenues and find new ways to tap existing markets. There’s probably not a telecoms CEO anywhere that wouldn’t have been pilloried for attempting what Digicel did. If the board hadn’t ended such apparent rashness, the shareholders certainly would have.

It’s true that O’Brien was one of the first entrepreneurs to see the business potential of Network Effects in the developing world. But the process of commoditisation of hardware and software that made this investment possible has been visible for years.

My first brush with this phenomenon came when I was living on Baffin Island in Canada’s eastern Arctic. In 1994, a few friends and I created the most remote commercial Internet Service Provider in the world. We found that we were able to take a frighteningly expensive satellite link and make good money from it by slicing and dicing the bandwidth between hundreds – and later thousands – of customers.

After only six months of operation about 25% of the local population – over a thousand people – were subscribed to our service. Our competition, belatedly set up and funded by the local telecoms monopoly, had 7 customers. I’ll admit we surprised even ourselves.

Lest this be construed as an exercise in self-congratulation, the lesson here is that Network Effects work. That’s been obvious to anyone who cared to think about it since Bell Telephone president Theodore Vail first described the phenomenon a century ago in 1908. The 1990s saw a resurgence of the effect due to the advent of the Internet. In this decade and the next, low-power handheld devices will be where most of the growth occurs.

To sum up: O’Brien put two and two together, and has made a couple of billion out of it so far.

We can too, if we want. The next wave of innovation in technology and communications is happening right here in the developing world, and thanks to the vision of a few dedicated individuals here in Vanuatu, we’re further along than the majority of our neighbours. If we take advantage of the investment that O’Brien and others are making in Vanuatu, we can become allies in an island-hopping campaign reminiscent of General Douglas MacArthur’s conquest of the Pacific.

Both Digicel and TVL are investing heavily in localisation of staff and management positions. The advent of competition led directly to the promotion of a few key individuals in the TVL hierarchy. Most notable among them was the appointment of the first ni-Vanuatu comptroller in its corporate history.

John Delves, General Manager of Digicel Vanuatu, states that he is “aiming to localise all positions as soon as possible and our current experience is that there is tremendous talent here. Our ultimate goal is for Digicel Vanuatu to be run by people from Vanuatu.”

Judging by its performance in other markets, Digicel seems to favour a high degree of independence in each national operation. This is achieved in no small part because of a willingness to invest in the local population. They are currently actively recruiting both Sales and Technical Operations managers.

But these are not the only opportunities available. Improving communications requires significant policy change and the creation of strong regulatory mechanisms as well. This is another area where Vanuatu can take the lead. Some of the World Bank consultants helping Vanuatu put together its regulatory regime are citizens of Caribbean nations, veterans of the liberalisation process in their region. There is no reason why a few talented ni-Vanuatu couldn’t join their ranks. There will also be demand for logistics experts, marketing and customer service staff – you name it.

The immediate benefits of investing in this area are blindingly obvious. Salaries for skilled technology positions are higher than in most other employment sectors. Work in this field is not bound by geography. I continue to work in Port Vila with clients around the world. This means that we can export our talent throughout the developing world without losing it ourselves.

Digicel is the first company to really grasp the market potential of marginal markets like those in the Pacific. They aren’t the only ones, though. The people of Vanuatu need to take note of this regional phenomenon and commit themselves to strengthening it. If we aren’t complacent about our role in this process, the rewards for us and our neighbours will be considerable.

His question, based on numerous similar postulations, is whether IT is becoming extinct. His answer (you knew it was a rhetorical question, right?) goes like this:

Since the days of punch cards, IT has believed itself to be guardian of precious computing resources against attacks from non-technical barbarians known as “users.” This arrogant attitude, born of once-practical necessity in the era of early data centers, reflects inability to adapt to present-day realities. Such attitudes, combined with recent technological and social changes, are pushing IT to share the fate of long-extinct dinosaurs.

The list of arguments he offers in support of this thesis are all valid to some degree, and all supportive of what he’s positing, but he somehow manages to miss the point that means most to business:

Monolithic, top-down, IT-as-bureaucracy approaches are being subverted by recent changes in technology and services, but so too is business in general.

Krigsman’s bullet list of arguments bear consideration, there’s no doubt. Let’s look at each of them in turn:

• IT services have become a commodity.It might be more useful to look a little deeper and to state that communications have been commoditised differently in recent years. Krigsman, channeling Nick Carr, claims that IT’s baseline role underpinning all normal business practices makes it no more important to a CEO than plumbing. As one wise commentator put it, this only demonstrates how senior management under-rates the importance of plumbing.
• Social media empowers users at the expense of IT.True enough. I believe it’s possible (not necessarily likely, but possible) that social media applications may provide some of the long-ago-promised disintermediation that Web pioneers ranted so much about in the 1990s.

  Social media do in many ways short-circuit some of the management processes that manifest themselves through monolithic, institutional IT, but: a) Their threat to corporate confidentiality has not fully been assessed; and b) A good many more forward-looking companies are embracing such tools through the leadership of their IT departments, who appreciate their lighter weight and lower maintenance costs.

• Software as a service (SaaS) providers are replacing in-house IT infrastructures.I’d like to see some decent metrics before believing this. Prima Facie, it doesn’t have the ring of truth. I’ve seen numerous companies announce their intention to provide software as a service, but I haven’t seen signs of any significant migration.

  I don’t believe that the issue of information ownership has been adequately addressed just yet. Granted that most managers don’t get how privacy and confidentiality work on the Internet. But I’m sure that the lawyers will start to grok it, soon enough.

  Whether litigation and, potentially, legislation will have a salutary effect on corporate information protection remains to be seen, because new privacy legislation and regulation seems to be in constant contention with (semi-)official government surveillance polices. I strongly suspect, however, that software as a service will take the form of leased or rented application-in-a-box type servers being hosted inside a company premises, supported primarily by the vendor but managed by corporate IT.

• IT leadership is alienated from senior management.

  Yes, jargon makes it difficult to be understood. Yes, projects – because they are poorly understood – are often late and/or over budget. Yes, IT managers need to make an effort to be clearer about their demesne. But the problem, again and again, is that other managers don’t think they need to know the details. And IT consists of nothing but details. I do my best to write plainly and use simple metaphors in my weekly column, but let me tell you, there are times in my professional life when I’ve been forced to say, “Look, I know you don’t understand me, but you’ve got to believe me when I say X.” Very often, this doesn’t happen. The discussion never moves beyond the sticker price, and damn the torpedoes. More about this in the next point.

• Corporate leadership doesn’t understand the implications of IT decisions on business strategy.

  I can’t point to any studies, but anecdotal information and personal experience leads me to believe that this happens more often than people would like to admit. It’s preferable, I suppose, to blame the blathering geek. The worst outcomes almost always arise out of the worst possible compromise: Selecting a non-technical person as CTO or CIO. It’s true that good geek managers are rare as hen’s teeth. It’s also true that throwing Harvard MBAs at the problem does nothing to alleviate the disjuncture between IT and Business, and much to exacerbate it.

• Volume purchasing arrangements contribute to IT stagnation.

  I wrote recently that detailed planning in an area of inherent complexity is pointless. A more process-focused approach, on the other hand, can be made to work reliably. In this light, the problems with cyclical purchase programmes become obvious, as do the shortcomings of per-seat or per-connection licensing.

  I don’t know what it will take to make people see that there are better models than costs that scale with your revenues. Such licensing schemes exist, but they are not the norm. Importantly, they usually come with professional support built-in. That’s not always true of standard commercial software licenses. As long as support is an overhead and not something to be taken advantage of, volume licenses will seem to make the most business sense.

  Software as a service as it’s most often envisioned simply exchanges leasing for ownership, but does nothing to address the fundamental issue of volume being valued over quality, savings over investment.

The problem lying at the heart of all of these issues is really quite simple: Communications works differently now that we have this Internet thing. In many ways it’s incompatible with 19th and 20th century business theory, and the jury is still out about which one will win.

Obviously the technology giants will learn lessons about management and technology and will, if only through natural bias, tend to adjust management to fit communications capabilities, rather than the other way around. But there are vast resources invested in the traditional corporate business model, and many of these businesses retain control over the means of distribution of information. The telecom companies in particular have become increasingly irritated by the subversive influence of the Internet, and they’re starting to realise that they can simply take the whole thing back.

Attacks on Net Neutrality and an increase in ‘Intellectual Property’ issues are symptomatic of the realisation that ownership has a completely different meaning where information is concerned, one that is in some ways quite antithetical to the way many corporations have done business in the past. It would be naive to think that they’d simply acquiesce to the changes being wrought on them. It’s not in their nature.

Spring is past on the Internet, and the bloom is, in some ways, off the rose. Corporate management is coming to the very expensive realisation that IT projects do not fit nicely with standard practice, but the alternative they face – distributed, open and ultimately uncontrollable collaboration tools – might represent more of a danger to them than the pitfalls of centrally managed, monolithic IT.

In my opinion, the battle is still being fought, and a lot more blood will flow before this particular dinosaur is nothing but a series of dents on the sedimentary substrate.