It’s one of the great questions of our time (or at least this past weekend): Is a podcast a podcast if it isn’t an MP3? Internet audio pioneer Audible set off the debate on Friday when it announced it would enable podcasters to distribute their work in its proprietary, and trackable, .aa format, facilitating advertising and paid subscriptions. Dave Winer declared that “if you’re not using MP3, you’re probably trying to make podcasting into a replay of previous media.” Om Malik accused Audible of “trying to hijack a popular trend.” Mitch Ratcliffe, who helped Audible develop the service, shot back, arguing that the denunciation of “any departure from the basic technology of MP3 and the business model of ‘no commerce has its claws in us’ is like trying to freeze broadcasting in the era of amplitude modulated low-power broadcasts.”

I find it hard to see Audible’s move as a horrible thing. If its Wordcast service (as it calls it) or the associated pricing model is flawed, then it will flop. If it succeeds, then it, by definition, has value – for content creators or consumers or both. You can’t hijack a trend without the market’s blessing. In any event, it’s hard to see how, as Winer fears, the Audible service threatens the ability of regular folks to continue to distribute podcasts as MP3s, free and without advertising. I, like most people, can play both MP3 files and .aa files on my computer and my portable player, and that’s not going to change.

Amateurs should, and will, be able to disseminate their creations, whether podcasts or songs or blogs or films, over the Internet. But those who hope to make a career of writing or talking or making music or shooting video should be able to protect their work and try to earn a living from it. If we don’t encourage experimentation with profit-making business models (beyond just search-based advertising) – and with rights-management schemes – we’ll end up restricting the creation of web media to amateurs, particularly amateurs of means. And we’ll end up with mediocrity. The greatest content is not created by those who do it just for love; it’s created by those who are so dedicated to their craft that they have no choice but to do it for both love and money.

I had almost come to believe that Peter Drucker was immortal, but sadly it’s not so. He died earlier today, at 95. Drucker was one of the great writers on business and management, who over the course of 70 years tirelessly championed the dignity and the intelligence of workers. In his 1946 book Concept of the Corporation, he made an eloquent case against mindless bureaucracy, arguing that managers should give workers the power to make decisions and take the initiative. A radical thought then, it’s become the common wisdom today, though few businesses actually live up to Drucker’s ideal.

There are good obituaries in the New York Times, Financial Times, and Business Week, and Drucker’s grandson, Nova Spivack, has written a tribute on his blog.

As Apple’s designers and engineers toiled away at creating an iPod that could play video, Steve Jobs kept telling reporters that a video iPod was a dumb idea. Even in late September, a couple of weeks before the video iPod’s unveiling, he was saying “that the market isn’t yet right for personal video devices.” So is Steve Jobs a big fat liar? No, he’s a smart businessman.

“Transparency” is a big buzzword these days. To succeed in today’s interconnected world, the common wisdom says, you need to let it all hang out – expose your data, expose your processes, expose your plans. One prominent management consultant’s message, according to CIO Insight magazine, boils down to “bare it all and share it all.” Call it the slut strategy.

Now, there’s a lot to be said for transparency, and for modular processes. But it’s easy to go too far – to make your company so transparent, so connectable, that you turn your entire business into an easily copied (and easily discarded) commodity. Even in the Internet Age, a company’s competitive advantage still hinges on what, to outsiders, remains hidden, obscure, and hard to replicate. Google has made a lot of its technology transparent, but the essence of the company, the source of its advantage, remains opaque.

Openness and honesty are good things. But let’s not lose sight of the enduring power of secrets and lies.

Most of the current discussion about the big changes under way in computing focuses on the software side, particularly on the shift from locally installed software to software supplied as a service over the internet. That’s what all the Web 2.0 fuss is about. Less attention has been paid, so far, to the equally dramatic shift that the new utility-computing model portends for hardware. The ability to deliver ever richer applications from distant, central servers will lead to the increasing centralization of hardware components as well – and that, in turn, will open the door to hardware innovation and entrepreneurship.

Take Newnham Research, a startup in Cambridge, England. It’s developing the thinnest of thin clients – a simple monitor adapter, with a couple of megabytes of video ram and ports for a mouse and keyboard, that plugs directly into an ethernet network. All computing is done on a central server, which can be either a traditional server or an inexpensive PC. The only thing delivered to the monitor, directly over the network, are compressed pixels. The device is called Nivo – for “network-in, video-out.”

Newnham, which is being backed by Atlas Ventures and Benchmark, isn’t producing its technology in volume yet. On its site, it suggests a few applications tied to the ease with which you can drive multiple monitors from a single PC, but it’s easy to think of much broader applications as well, particularly in schools, shops and small offices.

One nonprofit company, called Ndiyo, is already putting Newnham’s hardware innovations to work – as a way to deliver computing to people who haven’t previously been able to afford it. Ndiyo began with a simple goal: “Instead of starting with a PC and seeing what we could take out, we began with a monitor and asked what was the minimum we had to add to give a workstation fully capable of typical ‘office’ use.” It’s created a system, using open-source software like Linux, OpenOffice, Firefox, and Evolution, that allows a half-dozen users to share a single PC simultaneously, all doing different things. Need to add more users? Add another PC to create a little Linux cluster, and off you go. (For more details, you can download a pdf presentation from Ndiyo.)

Bill Gates and Ray Ozzie talk about the disruption of the software market. Hardware’s going to go through a disruption, too – and it’s about time.

Ray Ozzie’s vision is now Microsoft’s vision. That may be the most important message of the “leaked” Microsoft memos (I put “leaked” in quotes since it’s obvious, as John Battelle points out, that these documents were intended to be made public from the get-go). Bill Gates’s memo is just a cover note to Ozzie’s agenda-setting memo. It’s Ozzie’s letter, Gates writes, “which I feel sure we will look back on as being as critical as [my] Internet Tidal Wave memo was when it came out.” That’s the sound of a baton – a very heavy baton – being passed.

Gates’s desktop era is over. Ozzie’s internet era has begun. Up until now, Microsoft has looked at the internet through the desktop; now it’s looking at the desktop through the internet.

Ozzie’s memo is very good. If you want an introduction to what’s often called “Web 2.0,” you could do worse than start with this document – not least because it doesn’t use the term Web 2.0 at all. Three things leapt out at me:

First, Ozzie seems to truly believe that the advertising model may be as lucrative for the software business as the licensing model has been. “In some cases,” he writes, “it may be possible for one to obtain more revenue through the advertising model than through a traditional licensing model. Only in its earliest stages, no one yet knows the limits of what categories of hardware, software and services, in what markets, will ultimately be funded through this model. And no one yet knows how much of the world’s online advertising revenues should or will flow to large software and service providers, medium sized or tail providers, or even users themselves.” Shifting away from the licensing model represents an enormous risk for Microsoft – a risk that could, under a worst-case scenario, prove fatal. It’s a risk that Ozzie doesn’t seem to shy away from.

Second is Ozzie’s recognition that proprietary data formats, which have always been crucial to Microsoft’s success, may be turning into liabilities. He writes: “For all its tremendous innovation and its embracing of HTML and XML, Office is not yet the source of key web data formats – surely not to the level of PDF.” This, too, implies another fundamental break with Microsoft’s heritage.

Third, and related, Ozzie explicitly embraces a truly open platform: “We’ll design and license Windows and our services on terms that provide third parties with the same ability to benefit from the Windows platform that Microsoft’s services enjoy. Our services innovations will include tight integration with the Windows client via documented interfaces, so that competing services can plug into Windows in the same manner as Microsoft’s services.” Now, maybe this is just boilerplate to keep the lawyers happy. But I don’t think so. I think it’s another admission that the pillars of the old Microsoft are crumbling. They’ll hold for a bit longer, but in the meantime a new foundation needs to be poured.

Yesterday, I questioned some undocumented research that SAP claims shows its customers are much more profitable than other companies. Today, the Financial Times reports on research from the Hackett Group, a benchmarking firm, which indicates that it doesn’t matter whether your enterprise resource planning system is from SAP or Oracle or PeopleSoft: “they’re basically all the same.”

Hackett examined a big group of large companies. It culled out the 25% that had the most efficient back-end processes (the ones automated by ERP) and found that about a third of those companies used Oracle, a third used PeopleSoft (now owned by Oracle) and nearly a third were SAP users. (Just a few had other vendors’ ERP systems.) It then looked at the other 75% of companies and found that the proportions using each of the main vendors’ packages were about the same. The lack of variation suggests, as the FT reports, “that their impact on efficiency and effectiveness is the same.”

Here’s how Hackett’s research guru Philip Carnelley sums up the findings: “Every way you look at it, it doesn’t make a difference. There are aspects that are quite different in terms of the architectural side but in terms of features and functions they are all very comparable products.” Is this news? Not really. Back in 1998, Oracle’s then-president Ray Lane said, “customers can’t find 5% difference among SAP, PeopleSoft, and us.”

So what does matter? Standardization and simplicity. A lot of big companies run different ERP systems in different units, a messy problem that can be exacerbated by mergers and acquisitions. Such fragmentation leads to complexity, confusion and high costs, and consolidating the systems offers the opportunity for big gains. As Carnelley says, “It doesn’t matter which way they simplify, but simplifying is a good thing. The ‘world class’ organisations tend to have only one ERP system.”

ERP is infrastructure. Rationalize it.

If you have an interest in business strategy, you’re familiar with Michael Porter’s five forces framework. In his landmark 1980 book Competitive Strategy, Porter overturned much of the conventional wisdom about business, showing that the governing assumptions reflected a much too narrow conception of competition. Companies don’t just battle their direct rivals for the profits in a market, Porter argued; they also contend with suppliers, buyers, substitute products, and potential new entrants. Together, these five forces of competition shape the structure of industries, determining how much profit is generated and how it’s carved up. Porter’s framework has come to underpin the way managers think about – and plot – their companies’ strategies.

The world has changed, though, since 1980, and I think the time has come to add a sixth force to Porter’s framework: the public interest. In The Public Wants Your Profits, an article in the new edition of Forrester Magazine, I argue that in recent years, as the power of unions and government regulators has waned, the public itself has become a force shaping industries and influencing the generation and distribution of profits. (Just look at Wal-Mart’s recent travails, or the pressure being placed on oil companies to curtail their windfall gains.) Traditional “corporate social responsibility” programs, which tend to be operated in isolation from companies’ central profit-making functions, are not a sufficient response to the growing power and complexity of the public interest. As I argue in the article, managers need to recognize that the public interest now manifests itself as an economic interest – and hence must be a core concern of business strategy.