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Building With 'Clicks and Mortar'

Reports of information technology's demise are greatly exaggerated.

November 28, 2003|Nick Schulz | Nick Schulz is the editor of

Earlier this year, an important article in the Harvard Business Review rocked Silicon Valley and information technology -- IT -- circles. Its author, the business writer and consultant Nicholas Carr, made a bold, Olympian pronouncement: "IT Doesn't Matter."

Carr argued that IT had become so ubiquitous it should be thought of as a commodity, like electricity: Everyone used it. As such, acquiring faster-better-cheaper technology wasn't going to help American businesses all that much.

In the early days of the IT revolution, a company could be the first to snatch up, say, new database software and gain enormous competitive advantages over its rivals. But today, Carr argued, large businesses have thoroughly adopted IT, so "IT doesn't matter" in helping companies leave competitors in the dust.

Carr's article was seen by some as kicking a dog while it was down, coming as it did after the dramatic collapse in technology and Internet stock prices.

The piling-on prompted some to speculate that the end of the Web as a revolutionary force was nigh.

So threatened did industry titans feel by this budding public perception that tech executives such as Microsoft's Bill Gates and Intel's Craig Barrett rushed to the defense of their beloved industry, one they believed still possessed the power to transform both businesses and the broader culture.

So who was right?

Well, you don't need to be Howard Dean's political opponents to know that IT -- and the Internet in particular -- does indeed continue to "matter." And though there was considerable merit to Carr's analysis, some developments in the months subsequent to the publication of his article help us better understand the way technology is continuing to transform businesses and our lives.

The online auction house EBay has become a household name in just a few short years, one of the examples of a company that's managed to thrive -- and even make money -- amid all the skepticism about tech businesses.

So potent has EBay become as a "clicks and mortar" business that it's creating demand for the start-up of traditional "bricks and mortar" businesses in response.

AuctionDrop is a California-based company that helps people sell stuff on EBay. You drop goods off at an AuctionDrop shop, and the staff provides the necessary services you need to execute a sale -- photographing the merchandise, listing it on EBay and handling shipping and delivery.

Once the items are sold, AuctionDrop cuts a check and mails it to you.

In addition to inspiring new businesses, the Internet continues to transform traditional businesses like the food service industry.

Thanks to information technology, restaurants and food providers are re-imagining their core identities, looking to recast themselves as the vanguard of what Internet pundit Glenn Reynolds calls "the comfy-chair revolution": businesses offering not just traditional consumer goods for sale but pleasant public spaces for people to meet, work, study and relax as well.

For example, Starbucks has made a big bet that customers will want wireless Internet access in coffeehouses, the better to linger longer over their lattes. So it has partnered with telecom service provider T-Mobile to equip all its stores with wireless Internet access.

McDonald's also has expressed interest in wiring its restaurants and recently announced it would be introducing gourmet coffee shops called McCafes in the United States. The effort to wire its stores seems to fit hand in glove with its domestic coffee bars initiative.

Other retailers are forcing themselves to adapt and change too. The huge and hugely successful chain store Wal-Mart announced plans to open a digital music store. It's still working out the details, but it's not difficult to imagine loading the kids into the minivan and heading to a Wal-Mart for diapers, trash bags and dog food and, once there, letting the kids hang out in the online music store burning CDs for the car trip home.

And thanks to the increasing prevalence of broadband connections at home, e-commerce sales continue climbing impressively, despite the uncertain economic climate of the last few years.

Almost 40% of homes have a broadband connection today, and that number is expected to jump to almost 80% in the next five years, according to UC Berkeley's John Battelle. Online shopping grew by 24% in the third quarter of this year over last, according to, and Forrester Research estimates that online sales will top $100 billion this year.

In the movie "Field of Dreams," the character Ray Kinsella, played by Kevin Costner, is reassured about his plan to build a baseball diamond in a corn field with the line, "If you build it, they will come." Now that consumers are poised to cross the $100-billion mark in annual online sales and retailing, and as businesses continue to emerge and evolve in response to demand for technology goods and services, it appears that the same bit of wisdom is applicable to the Internet and IT as well.

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