Yep, today marks the fifth anniversary of the publication of my article “IT Doesn’t Matter” in the Harvard Business Review. I thought I should mark the momentous occasion, even though I’m as sick of the whole thing as everyone else is at this point.

Still, “IT doesn’t matter” has taken on a happy life of its own, largely independent of the original text. I saw today some IT columnist terming the article a “screed.” I don’t know about that. I don’t have anything against screeds, but t doesn’t seem all that screedy to me. Anyway, read it yourself and make up your own mind

“Captcha” is the official term for those wavy strings of numbers and letters that you have to decipher before setting up an online email account or gaining access to other types of web sites. The acronym, coined by someone at Yahoo a few years back, stands for Completely Automated Public Turing Test to Tell Computers and Humans Apart. Captchas are intended to separate men from machines in order to prevent spammers and other nasty folks from using automated means to crack into sites.

Problem is, as the Washington Post reports today, the machines keep getting smarter. The spammers are thinking up ever more ingenious ways to break the captchas. It used to be assumed that spammers were somehow deploying people to crack the codes, paying tiny sums to third-world laborers to type in the characters. Google, which has recently suffered attacks on its captcha systems for Gmail and Blogger, still believes that people are doing the work. A Google spokesman tells the Post: “We still believe there is human involvement.”

Security experts, though, are increasingly convinced that the most sophisticated captcha attacks are actually being carried out wholly by machines:

The attack that most clearly signals that computers were solving a CAPTCHA came about a month ago, when Websense detected what appeared to be some malicious traffic from one of its “threat-seeker” honey pots. Once it attracted the malicious code, the decoy sought repeatedly to create Hotmail accounts. Over and over, when it was presented with the Hotmail CAPTCHA, it sent the letter puzzle to another computer. That computer would respond within about six seconds, a speed that leads computer analysts to think the CAPTCHA was being cracked by a computer, not a human.

No one seems to be quite sure, though, how exactly the computers are doing it. And the increasing sophistication of the automated attacks puts site owners in a quandary, as the Post reports: “Microsoft and other Web companies say they are interested in creating human verification tests that are harder for computers to crack. But there’s an inherent difficulty. Making the tests harder for the computer makes them harder for humans, too.” You may outsmart the people before you outsmart the machines.

Which raises a bigger question: What happens if the bad guys get the AI first?

The inventor of LSD, Albert Hofmann, has joined the great Peter Max painting in the sky, but the dreams he spawned live on. Publisher and sometime savant Tim O’Reilly tells the BBC, on the occasion of the 15th anniversary of the open-sourcing of the World Wide Web, that a true “global consciousness” is at last emerging, thanks to the Net. “It really is going to happen,” he says, and “it’s going to happen mediated by computers.” It is, he continues, “the most profound change since the advent of literacy.”

Might I just point out here that both LSD and the Web were invented in Switzerland?

Robert Scoble, the famous blogger, also sees big things ahead for the Web. He tells the BBC: “Why couldn’t I have a little glass behind my eye that tells me your Facebook page and tells me a little bit about you on Wikipedia while I am looking at you?” And just think what Twitter might turn into. “There is a new tweet coming into my account every 15 seconds,” says Scoble, “and 15 years from now what’s that going to feel like? You are going to be able to do a lot more than 140 character messages.”

More than 140 characters? Amazing.

“Don’t be so gloomy,” Harry Lime tells Holly Martins in the film of Greene’s The Third Man. “After all it’s not that awful. Like the fella says, in Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love – they had 500 years of democracy and peace, and what did that produce? The cuckoo clock.”

O’Reilly may be right. Define consciousness downward sufficiently and – cuckoo! – a global one emerges.

A new study, to be released today by McKinsey & Company, reveals in some of the clearest terms yet the sea change that is under way in business software. The consulting firm surveyed more than 850 corporate software buyers, from firms of all sizes, and found that software-as-a-service is rapidly “becoming mainstream,” with three-quarters of software buyers saying they are “favorably disposed to adopting SaaS platforms” for software development and deployment. The rapidly growing embrace of web applications is leading, says McKinsey, to a fierce competitive battle, between “traditional mega-vendors and the larger SaaS incumbents,” for the future of the enterprise software business.

Companies report that they will dedicate 19% of their total software budget to applications delivered as services this year, up dramatically from the negligible amounts spent on subscription software just a few years ago. Smaller and mid-sized companies are the most aggressive adopters of web apps. Companies with fewer than 100 employees are spending 26% of their software budgets on subscription software, while the largest companies are spending 11% on web apps. Reports McKinsey: “While the faster adoption in SMB is no real surprise, what is interesting is that there are some large enterprises that are converting to the models that underpin SaaS offerings. For vendors, this is a strong indication that there is a clear opportunity even at the largest prospects for those that can offer the right product in combination with the right selling strategy.”

The shift to web apps, says McKinsey, is beginning to reshape the software business, “fueling the rise of a new generation of platforms to develop, integrate, deploy and host these applications.” The platforms are taking three different forms, according to the firm:

1. Delivery platforms, which take the form of either managed hosting or cloud computing: “Managed hosting, exemplified by companies such as OpSource, IBM and RackSpace, is similar to traditional hosting but tailored to SaaS. In this model, developers set up/obtain their infrastructure from a hosting provider who manages it for them. Developers can get superior service levels and support compared to doing it themselves. Cloud computing, such as offered by Amazon (EC2 and S3) is a model where a vendor provides on-demand access to infrastructure capacity over the cloud. Major advantages of cloud computing relative to managed hosting include faster provisioning of capacity and ability to scale capacity up and down as needed. On the downside, users don’t get to choose or customize their infrastructure, need to be comfortable with sharing resources and may get lower service levels and support.”

2. Development platforms, which provide “all or some of the integrated developer environment (IDE) tools needed for creating an application on the Web, in addition to hosting.” Examples include Bungee Labs and Coghead. While “nascent” at this time, development platforms “could create a tectonic shift in software development by opening application creation to a much wider array of developers for a modest cost and even enabling a new generation of non-developers to create SaaS applications easily.”

3. Application-led platforms, such as those offered by Salesforce.com, NetSuite, and Cisco-Webex, which “rely on the initial delivery of a business application to create a customer base and establish a foundation for the platform as a separate offering. This area has the greatest marketplace traction today, in large part because of the success these vendors have in selling rapid deployment of new applications to existing customers, as well as targeting developers to write for a platform that is already popular with potential customers.”

The key challenge for the platform providers, writes McKinsey, is to convince IT professionals of the viability and reliability of their services. IT departments continue to prefer the familiar managed hosting model, which gives them more direct control over IT infrastructure. “For both cloud computing and general development platforms, the issue is maturity. Especially with general development platforms, customers are still coming to terms with the value proposition, and have no signifi cant real-world examples from which to draw. Their success will depend on time, increased familiarity, and the emergence of proven success in the marketplace.”

Software’s new battle lines are now becoming visible, report the consultants: “These trends – the growing acceptance of SaaS and SaaS platforms – are likely to create a tremendous battle between the largest software vendors and the newer SaaS providers. While each of these players has an advantage at one end of the spectrum (large vendors such as IBM, Oracle, SAP and Microsoft do best in large enterprises, while SaaS “incumbents” such as Salesforce, NetSuite and RightNow are more in favor with small businesses), the real battle is in the mid-market space. For SaaS platform startups, that means trying to get into a room where there are already two elephants vying for the customer’s attention. Success will mean locating a unique niche – and being prepared to have it invaded.”

The new issue of Wired has a feature article on Amazon Web Services, the online retailer’s computing utility. The article gives a sense of how rapidly the utility business, and its underlying infrastructure, is expanding. When AWS launched in earnest a couple of years ago, with the S3 storage utility, Amazon’s computer system was at times running at just 10% of its capacity, according to CEO Jeff Bezos. Now, AWS demand has “far exceeded the excess capacity of our internal system,” says AWS head Andy Jassy. AWS is “now big enough to be piling up its own silicon.”

That’s good news for both Amazon and its AWS clients. It implies that the company has probably achieved what traditional utilities call a high “diversity factor” – a broad mix of clients with different and complementary demand patterns – which means, as well, that the system’s capacity utilization is probably quite high and quite steady. (When the Amazon system was only used by the Amazon store, in contrast, its diversity factor and capacity utilization were woefully low – a trait it had in common with most private corporate IT operations.) For any utility, achieving a high capacity utilization, or “load factor,” is crucial to success because it allows the capital invested in infrastructure to be used efficiently. For clients, in turn, that often translates into lower prices.

A new report from the Linux Foundation reveals the extent to which the most famous and successful open source software project – the development of the Linux operating system – has shifted from being a volunteer effort to being a corporate initiative. Of the many thousands of changes that have been made to the Linux kernel over the past three years, fully 73.2% came from employees working on behalf of their companies. (Three companies – Red Hat, Novell, and IBM – accounted for 28.4% of all the changes.) Only 13.9% of the changes came from volunteers without a corporate affiliation, and the remaining 12.9% of changes came from developers whose affiliation is unknown. Write the authors of the report: “It is worth noting that, even if one assumes that all of the ‘unknown’ contributors were working on their own time, over 70% of all kernel development is demonstrably done by developers who are being paid for their work.”

The Linux kernel is now “largely the product of professionals, not volunteers,” observes Tom Slee:

Linux has become an economic joint venture of a set of companies, in the same way that Visa is an economic joint venture of a set of financial institutions. As the Linux Foundation report makes clear, the companies are participating for a diverse set of commercial reasons. Some want to make sure that Linux runs on their hardware. Others want to make sure that the basis of their distribution business is solid. And so on, and none of these companies could achieve their goals independently. In the same way, Visa provides services in many different locations around the world in different sizes and types of stores. Some banks need their service mainly in one country, some in another, but when they work together they all get to provide their services all around the world.

There’s nothing particularly surprising in the shift from the volunteer to the corporate model – it tends to be what happens when lots of money enters the picture – but it does reveal that while Net-based “social production” efforts may be unprecedented in their scale and unusual in their technology-mediated structure, they are no more immune, or even resistant, to being incorporated into established market systems than any other type of labor that produces commercially valuable goods. The shift in Linux kernel development from unpaid to paid labor, from volunteers to employees, suggests that the Net doesn’t necessarily weaken the hand of central management or repeal all the old truths about business organization. “As open source software has matured and expanded it has become both more unlike the rest of the world and more like it,” writes Slee. “It will be fascinating to see what comes next, but the Linux Foundation report has made clear that open source has crossed its commercial Rubicon, and there is probably no going back.”

The top-ranked post at Hacker News right now is from a software developer who asks, “How do you stay emotionally efficient?” The question, with its assumption that emotions, like work flows, can be managed with greater or lesser efficiency, strikes me as another small but telltale sign – along with the rise of “social networking” sites and the structuring of “friending” as an automated process – of the insidious colonization of our personal and social lives by the ethic of the algorithm. As usual, the process of colonization begins with the warping of language. “We shape our tools,” wrote John M. Culkin, “and thereafter they shape us.”