Salesforce.com’s announcement Monday that it would open up its proprietary Apex programming language to customers and other developers marks an important turning point for the company. It’s been clear, at least since the announcement of its AppExchange software marketplace a year ago, that Salesforce’s ambitions go well beyond providing a simple customer relationship management system. With Apex, those ambitions come into clear focus: Salesforce doesn’t want to be your CRM supplier; it wants to be your data center. It wants to underpin and run all your enterprise applications, while giving you the tools to customize them. Its original slogan “Success, Not Software” appears to be morphing into a new one: “Innovation, Not Infrastructure.” That phrase appears, in fact, in the press release announcing Apex (though it’s spoken by an AMR researcher).

Last year, I questioned Salesforce’s decision to run its software-as-a-service application on its own infrastructure rather than have that infrastructure hosted by a hardware utility. Now, I understand the rationale for the decision: the infrastructure is the product. While Salesforce’s move opens up new opportunities for the firm, it also dramatically widens the competition it will face. Everyone from Microsoft to Google to Amazon is moving into the business of being an infrastructure utility. And, in an age of standardization, it will be interesting to see how customers react to the idea of running their enterprise applications in a private language. Is Salesforce the SAP of the SaaS world – and is that a good or a bad thing?

Dan Farber reports that venture capitalist Mark Gorenberg views Apex not just as a turning point for Salesforce but as a watershed for corporate computing in general. Gorenberg “hailed Apex as the most significant announcement since Sybase announced stored procedures. In effect, Gorenberg said, stored procedures led to the change from mainframe to client/server computing. ‘Apex will be the big tsunami for a new platform for applications,’ he concluded.” That’s a bit of an overstatement, but what Salesforce is doing is certainly part of a big tsunami in business computing, a tsunami that does indeed mark the transition away from the client-server age into what I’ve called the third age of IT. At the center of that age will stand not the PC but the utility-class data center, providing companies with at once greater efficiency and greater flexibility.

UPDATE: In another post, Dan Farber interviews Salesforce’s tech guru Parker Harris, who goes deep into Apex’s technical details. Meanwhile, Sinclair Schuller makes the case against what he terms the Apex “handcuffs.”

Michael Arrington, founder of the popular technology news blog TechCrunch, traveled to Washington, DC, last weekend to participate in a panel discussion at the annual conference of the Online News Association. He apparently used the occasion to excoriate newspapers and the journalists who work for them, directing his ire most pointedly at the New York Times and its coverage of technology. He cast particular aspersions on an October 2005 Times story on a startup named Inform. As another panelist, the blogger Jeff Jarvis, reported, “Arrington launched attacks on news media, contending that journalists will be losing their jobs and that reporters are fools if they don’t quit and start blogs. He then tried to sucker-punch The New York Times, arguing that the only reason the paper could have written a favorable story about the startup Inform was if the reporter or editor had ties, financial or otherwise, with the firm.”

Arrington himself, on his personal blog, wrote about his experience:

I made a few main points when I spoke. I said that Digg was more interesting to me than the New York Times because the crowd determines what’s on the home page, not some editor I neither know nor necessarily trust. I also made some points about journalism in general after a few defensive flurries were sent my way. First, that most mainstream media isn’t interesting to me because they report news so late. By the time something hits the New York Times, it’s usually at least a day old in the blogosphere. Second, I was discouraged by the fact that there is no discussion in mainstream media. Publications never cite their competition, and readers cannot say what they think (as they can with blog comments). And third, I encouraged journalists who were stuck in the big media machine, with their career going nowhere, to consider blogging as an alternative … I also called out the New York Times in particular – their recent launch of an offline new reader showed that they don’t get what consumers really want, I said. And I also said that many of the fluff pieces in the Times technology section must either be generated from back scratching, or lack of understanding of the product … Instead of sparking an intelligent debate I was roundly attacked. It’s the first time I addressed “real” journalists head on, and all I saw was fear, loathing and disdain.

When he called into question the ethics of the New York Times reporter, Arrington was upbraided both by his co-panelist and by the audience. Jarvis wrote: “I challenged him immediately, saying that this is a grave charge and that he clearly had no facts to back it up; he said as much. I also made it clear that Inform is, in some ways, a competitor with Daylife and that Arrington is also an investor in Daylife. It didn’t stop him. He repeated this attack, among others, on The Times. It was most uncomfortable, even embarrassing.” Staci Kramer of the PaidContent blog, who attended the session, also reported that Arrington “accused an NYT reporter of going in the tank on a story, then apologized when confronted directly by the NYT’s Jim Roberts, who challenged him to provide facts or back down. His reply: ‘I apologize. I have no facts to support my statement.'”

As I read of Arrington’s disparaging comment about the Times article, I recalled, with some disquiet, an exchange I had with him back in early February. At the time, there was a heated discussion going on about conflicts of interest among bloggers, a discussion spurred by a February 9 Wall Street Journal article by Rebecca Buckman on the lack of clear ethical standards in the blogosphere. Buckman interviewed Arrington for her article, and he stressed that, though he both wrote about Web 2.0 startups and acted as an adviser to some of them, he was always careful to disclose any possible conflict of interest. I had been following Arrington’s blog, and as I read his statements in the Journal I was reminded of what I had previously sensed to be a possible conflict related to his long-undisclosed involvement with a startup named Edgeio. After finishing the Journal article, I read back through some of Arrington’s writings, and, on the morning of February 10, I drafted the following post, which I intended to publish on this blog:

Rebecca Buckman’s controversial Wall Street Journal article about possible conflicts of interest in the blogosphere has provided a good occasion for taking stock (no pun intended). As Buckman wrote, the ethics of blogging “can be a murky issue in today’s clubby blogosphere, where many people including venture capitalists, lawyers and journalists write about Web issues and companies – and often, each other – with little editing. The rebound in Silicon Valley’s economy, coupled with the popularity of cheap, easy-to-use blogging tools, means there are more aspiring commentators than ever opining about start-ups and tech trends on the Web. And increasingly, it is difficult to discern their allegiances.”

One example of the murkiness that surrounds bloggers’ allegiances can be found in Michael Arrington’s much-read and much-quoted TechCrunch blog. Arrington does a great job of covering new “Web 2.0” companies and services. His reviews are smart and succinct, and they get a lot of attention. Arrington and his blog are mentioned in Buckman’s article:

“One popular blog that often writes positively about young tech companies, TechCrunch, is run by a lawyer and entrepreneur, Michael Arrington, who occasionally serves as an adviser to companies he has written about. He sometimes receives stock in those small companies, he says. But Mr. Arrington says he generally doesn’t write about start-ups he’s advising after he becomes affiliated with them -and ‘if I did, I would put a disclaimer up’ on the blog, he says.”

Arrington’s to be applauded for his commitment to disclosure, but the issue may be more complicated then it at first seems. What happens, for instance, when Arrington reviews new sites or services that compete with ones he’s affiliated with? Does he – should he? – also disclose his interests in those cases? How does one balance one’s role as an unbiased reviewer with one’s role as a paid adviser?

As Buckman notes, Arrington is an entrepreneur as well as a blogger and an adviser. In particular, he’s a cofounder of a soon-to-be-launched company named Edgeio. Edgeio began to unveil itself earlier this week when Arrington’s partner, Keith Teare, talked about the service in a presentation. Business Week’s Rob Hof attended the presentation and summed up Edgeio’s business model: “essentially, Edgeio is doing just what its tagline says: gathering ‘listings from the edge’ – classified-ad listings in blogs, and even online product content in newspapers and Web stores, and creating a new metasite that organizes those items for potential buyers.” As an aggregator of personal ads, Edgeio will compete with such powerhouses as eBay and Craigslist. It will also compete with Google Base, another new service that provides an alternative way to aggregate classified advertising.

Back on October 25, 2005, as rumors about Google Base first began to swirl around the blogosphere, Arrington wrote this about Base on his blog: “Google Base appears to be a service to publish content directly to google and have them host it in a centralized way. If so, this would be going completely against the accelerating trend of decentralized publishing. My prediction: when the dust settles, this will either be largely ignored or universally hated. Centralized content is boring … so much is going on at the edge of the web, why would anyone try to put it all back in the center?” Arrington didn’t mention his connection with Edgeio in the post, though, in retrospect, his comment that “so much is going on at the edge of the web, why would anyone try to put it all back in the center?” describes one of the key assumptions underlying Edgeio’s service – and one of its key points of differentiation from Base.

Clearly, Edgeio must have been much on Arrington’s mind at the time. Four days before the Base post, on October 21, TechCrunch had hosted its third “Meet-up” event, one of whose sponsors was Edgeio. Two days after his Base post, on October 27, he announced his connection with Edgeio in a post, noting that he and his cofounders had been working on the service “for most of this year.” He provided a teaser about what Edgeio would do, without going into any details: “Edgeio will give you the ability to do new and (we think) really exciting things with your blog. If you have a weblog and you’d like to be part of early testing, there is a field for giving us your blog address as well.”

On November 11, 2005, Google officially launched its Base service, Arrington immediately trashed it in a review titled “Google Base Launched. Yuck.” His “bottom line” assessment of Google Base went as follows: “This is not a very interesting application in its current form. Keith Teare says it’s like a 1985 dBASE file with less functionality. It’s ugly. It’s centralized content with less functionality than ebay or craigslist. The content is not integrated directly into Google search results, but ‘relevance’ can bump it up into main and local search (and froogle).”

Again, no mention of his involvement with a company that would compete with Google Base.

Arrington’s reviews of Base are entirely reasonable. Some people praised Base when it appeared, but plenty of other people were highly critical of it, in the same ways that Arrington was. There’s no reason to think that his reactions to Base were anything but sincere. At the same time, it’s hard to believe that they weren’t colored by his involvement with Edgeio. The story underscores one of the tricky questions that Buckman’s article has brought to the surface: How many hats can a blogger wear?

I hesitated before publishing the post. I thought it only fair to ask Arrington for his perspective. So, on the morning of February 10, I sent him the following email:

Dear Mr. Arrington,

I write the Rough Type blog (roughtype.com) and am a dedicated reader of your TechCrunch blog. In the wake of the WSJ blogging story, I’ve been thinking about the complex issue of disclosure in the blogosphere. It fits with a broader subject that interests me deeply: the reliability of information provided on the web and, particularly, provided through the Web 2.0 model. I noted your statement on the subject of disclosure in the WSJ piece and wanted to follow up with you for a followup post I’m writing on this subject.

You note in the Journal that you avoid writing about companies you’re affiliated with. But what about writing about companies that compete with companies you’re affiliated with? I’m thinking, in particular, of two critical reviews you posted about Google Base last fall (Oct. 25 and Nov. 11). You didn’t mention in either of those posts that you were a cofounder of a company, Edgeio, that would compete with Base for listings. In retrospect, do you think you should have disclosed the Edgeio affiliation? And if not, why not? More broadly, how do you think about striking the right balance between being an impartial reviewer and also pursuing business interests?

I don’t mean to put you on the spot. I just want to make sure I know your perspective on the subject.

Thanks,

Nick Carr

Some hours later, Arrington responded with this email:

check out my posts on oodle, a direct competitor, and other classifieds companies like Microsoft Expo.

Today is a bad day to make accusastions like this. http://www.crunchnotes.com/?p=144

Before you post an attack piece, please make sure you research the facts.

Mike

I was disappointed that he didn’t bother to answer or even acknowledge my questions, but I did find and read his reviews of Oodle and Microsoft Expo. And they were positive reviews. About Oodle he wrote: “Oodle is all about decentralized content, a theme I constantly talk about, and I’m in their corner.” About Expo he wrote: “I have been testing the service, and there are features that are top notch. This is going to be an impressive product.” In neither case, though, did he disclose that he was engaged in launching a competing classifieds site.

Nevertheless, it seemed to me that, even though I believed he should have disclosed what I viewed as a conflict of interest, he was not being duplicitous. Also, I felt genuinely sorry that he had been called a racist that day (as the link in his email revealed). So I decided to give him a break and not run the post I’d written. I informed him of my decision in the following email:

Thanks for the response and for pointing me to the Oodle and Expo reviews. I’m not pursuing this.

Sorry about the grotesque racism charge.

Nick

The next day, he wrote back:

Nick,

I apologize for my email yesterday. I was a total jerk. It was a very bad day, but that is no reason to take it out on you.

You raise a good point and it is something that I have to deal with in an honest way.

Mike

That same day, Arrington wrote a brief post about Edgeio, which began, “Edgeio is a startup that I co-founded with Keith Teare last year. Because of the clear conflict of interest I won’t be writing about edgeio that much on TechCrunch.” He made no mention of his earlier critiques of other classifieds sites.

I’m not sure if I did the right thing in withholding the post I’d written. I think it raised valid issues – issues that bloggers should be struggling with, rather than ignoring – and though I believed Arrington was giving an honest review of Google Base, I also believed that the review was influenced by his involvement with a competing company pursuing a different strategy – a strategy that was implicitly promoted in his criticism of Base’s strategy (and in his praise of Oodle’s strategy). Arrington, I still think, made a mistake in failing to disclose his financial interest in a classifieds site when he reviewed other classifieds sites. I have no doubt that if he had written such reviews for the Times, or pretty much any other newspaper, without disclosing his conflict of interest, he would have lost his job – and rightly so. It seems strange, in this light, that he would choose to question in a public forum the integrity of a newspaper and one of its reporters.

But maybe it’s not so strange. Blogging is a new and immature medium, with few rules and few traditions, and bloggers have a tendency to think of themselves as being liberated from the constraints of traditional media. That’s only natural. But it’s also, in large measure, an illusion. Many of the constraints that reporters operate under evolved over the years in order to temper the freedoms that could lead, and sometimes did lead, to the abuse of the public trust. Traditional journalism has its weaknesses, as any journalist will tell you, but it has many strengths as well, strengths that are hard-earned and worthy of respect. Many bloggers assume that blogging represents a step forward when, in important ways, it actually represents a step backward.

When it comes to conflicts of interest, or other questions of journalistic ethics, the proper attitude that we bloggers should take toward our counterparts in the traditional press is not arrogance but humility. In this area, as in others, blogs have far more to learn from newspapers than newspapers have to learn from blogs.

It’s funny how a set of instructions – an algorithm – written by people can come to be granted, by those same people, a superhuman authority. As if a machine fashioned by man should, upon trembling into motion, shed its earthly origin and assume a god-granted imperium, beyond our small-minded questioning.

Last week, CNET’s Elinor Mills reported on how a web search for “Martin Luther King” returns, as its first result on Google and as its second result on Windows Live Search, a web site (martinlutherking.org) operated by a white supremacist organization named Stormfront. The site, titled “Martin Luther King Jr.: A True Historical Examination,” refers to King as “The Beast” and says he was “just a sexual degenerate, an America-hating Communist, and a criminal betrayer of even the interests of his own people.” The site also features an essay on “Jews & Civil Rights” by former Ku Klux Klan official David Duke.

What’s remarkable, though, is not that a search algorithm might be gamed by extremists but that the owners of the algorithm might themselves defend the offensive result – and reject any attempt to override it as an assault on the “integrity” of their system. AOL, because it subcontracts its search results to Google, finds itself in the uncomfortable position of promoting the white supremacist site to its customers. In response to an inquiry from CNET, the company was quick to distance itself from the search result and to place the responsibility for it on Google:

AOL spokesman Andrew Weinstein said the company has contacted Google about the Martin Luther King search results. “We get all of our organic search results from Google, as you know, so we don’t set the algorithms by which they are ranked. Although we can’t micro-manage billions of search results, our users would not expect this to be the first result for that common search, and we do not want to promote the Web sites of hate organizations, so we have asked Google to remove this particular site from the results it provides to us.”

That seems like an entirely reasonable position. Clearly, a white supremacist site is not the site that any rational person would consider an appropriate recommendation for someone looking for information on a black civil-rights leader. But Google doesn’t seem to agree. In fact, in responding to CNET, it defends the King result as being “relevant to the query” and suggests that it is evidence of the integrity of the Google PageRank algorithm:

At Google, a Web site’s ranking is determined by computer algorithms using thousands of factors to calculate a page’s relevance to any given query, a company representative said. The company can’t tweak the results because of that automation and the need to maintain the integrity of the results, she said. “In this particular example, the page is relevant to the query and many people have linked to it, giving it more PageRank than some of the other pages. These two factors contribute to its ranking,” the representative wrote in an e-mail.

A Microsoft spokesman is even more explicit in asserting that the King result is a manifestation of algorithmic “integrity”:

The results on Microsoft’s search engine are “not an endorsement, in any way, of the viewpoints held by the owners of that content,” said Justin Osmer, senior product manager for Windows Live Search. “The ranking of our results is done in an automated manner through our algorithm which can sometimes lead to unexpected results,” he said. “We always work to maintain the integrity of our results to ensure that they are not editorialized.”

By “editorialized” he seems to mean “subjected to the exercise of human judgment.” And human judgment, it seems, is an unfit substitute for the mindless, automated calculations of an algorithm. We are not worthy to question the machine we have made. It is so pure that even its corruption is a sign of its integrity.

In an interview with Technology Review’s Wade Roush, Amazon.com chief executive Jeff Bezos discusses the company’s rapidly expanding effort to sell utility computing services. One reason it makes sense for Amazon to provide data storage and processing as metered services, Bezos notes, is that the massive computing infrastructure the company has built to run its online store has a great deal of spare capacity. “There are times,” says Bezos, “when we’re using less than 10 percent of capacity. And that is one of the advantages of doing things this way – it promises higher rates of hardware utilization. That’s a system-wide efficiency that should make everybody happy.”

It may seem astounding to think that a big computing system sometimes runs at less than 10 percent of its capacity, but it’s actually the norm in the business world, where millions of private computing plants operate in isolation. And, beyond just Amazon, that’s one of the main reasons utility computing makes such economic sense. The same thing happened with electric power. When manufacturers built private generators to power their plants, they had to build enough capacity to handle their peak potential demand, or load. That meant that the vast majority of capacity went unused. When the alternating current grid arrived, allowing power to be transported over long distances, it suddenly became possible to share capacity among many users, which in turn made it possible for centralized utilities to operate at very high levels of capacity utilization, balancing their load among many users. For computing, the internet is the AC grid. Computing and electric power may be very different technologies, but the supply economics are remarkably similar.

Noting that “we may all eventually do most of our computing within the cloud of computing and storage resources,” Roush asks Bezos, “Can you imagine Amazon evolving into a company that’s as famous for being a kind of Web utility as it is for being an e-retailer?” “No,” replies Bezos. “This is a completely separate business that will grow up in its own way … Today, Amazon itself is the biggest user of [our utility services] like EC2 and S3. We’ve been our own beta customers. But one day my hope is (to answer your question about the future) that Amazon will be just one of many big providers of infrastructure services, not the big provider.” In the past, I’ve written about the inevitable tensions that arise between being a retailer and being a supplier of technology services, given the very different economics of those two businesses. If Amazon’s utility services prove successful, it will be fascinating to watch how the company navigates those tensions.

UPDATE: Bezos was interviewed after a speech he gave about Amazon’s technology “guts” and how they’re being used for its web services. An MP3 of his speech is available here and written summaries are available here and here.

Storm clouds may be building over the online advertising market. Both Business Week and the New York Times have published major articles on click fraud. Though neither produces hard evidence that it’s an unmanageable problem, both raise troubling questions about its prevalence and growth. Perhaps of more immediate concern, the Times article reports that researcher eMarketer is about to cut its estimates for online ad spending this year by approximately 5 percent. Combined with Yahoo’s recent warning on slower-than-expected growth in ad sales, it’s an indication that expectations may have crept ahead of reality – and a reminder that the online ad market, like every other ad market, is tightly tied to broader economic conditions. Given that online advertising is the sole engine powering the entire Web 2.0 microeconomy, any significant sputter would have wide implications.

“An expert-focused Wikipedia,” writes Cory Doctorow, in reference to Larry Sanger’s proposed Citizendium, “would likely devolve into interminable pissing matches over who was and was not qualified to be called an expert, because expertise isn’t a measurable quantity, but rather something that is socially constructed.” What Doctorow is predicting in the first half of that sentence – without actually saying it – is that Citizendium will turn into Wikipedia. Wikipedia is nothing if not a forum for interminable pissing matches, over everything from the qualifications of contributors to the worthiness of subjects to the meaning of vandalism, among people with remarkably capacious bladders. As Angela Beesley, a Wikipedian steward and board member, recently said, “Creating fewer articles as time goes on seems fairly common as people get caught up in the politics and discussion rather than the editing.” Wikipedia today has more layers of bureaucracy than the average Fortune 500 company and more factions than the Italian parliament.

But it’s the second half of the sentence that delivers the payload: “expertise isn’t a measurable quantity, but rather something that is socially constructed.” I love the offhandedness of that, as if Doctorow were simply repeating a universally acknowledged truth. Expertise? It doesn’t really exist. It’s just something we imagine together, a vaporous communal conjuring that can shift its shape with opinion’s wind. Expertise is no more solid than celebrity.

Doctorow here is glossing Clay Shirky’s recent critique of the idea of Citizendium (it doesn’t actually exist yet), in which he labeled as “false” the belief that “experts are a special category of people, who can be readily recognized within their domains of expertise.” Continues Shirky, “experts are social facts – society typically recognizes experts through some process of credentialling, such as the granting of degrees, professional certifications, or institutional engagement. We have a sense of what it means that someone is a doctor, a judge, an architect, or a priest, but these facts are only facts because we agree they are.”

This is top-shelf guff, which reveals, as if we needed to be reminded, that intellectuals make the very best anti-intellectuals. An architect does not achieve expertise through some arbitrary social process of “credentialling.” He gains expertise through a program of study and apprenticeship in which he masters an array of facts and techniques drawn from such domains as mathematics, physics, and engineering. If you doubt that, grab someone off the street and have him design a skyscraper. The same goes for a doctor, an electrician, a jet pilot, a software engineer, a zoologist, a scholar of romantic poetry, or a manicurist. The degree or certification is no more the essence of expertise than a wedding ring is the essence of love. The degree or certification is a trivial adornment. The expertise is what’s real – it’s what abides – and to call it socially constructed is not only to denigrate the expert but to denigrate the very basis of culture.

I tend to agree with Shirky’s belief that Sanger’s concept of Citizendium is fatally flawed (though I wholeheartedly support Sanger’s desire to counter the destructive force of anonymity). But Shirky’s diagnosis of the flaw is all wrong. What “will kill Citizendium,” he writes, is that, unlike Wikipedia, “it won’t go far enough” in “its disrespect of experts.” No, Citizendium’s flaw does not lie in having too much faith in what Shirky dismissively calls “the rugged condition of expertise.” Its flaw lies in not having enough faith in it. By creating a vague bureaucratic system in which experts gain their Citizendium credentials through community certification, Sanger is, in fact, reducing expertise to a social construct and thus rendering it meaningless, or at least turning it into a bone of endless and silly contention. He wants to have it both ways, and as a result will likely do no better than create another Wikipedia: a vast, labyrinthine garden of mediocrity.

Relativists like Doctorow and Shirky like to think of Wikipedia as a success. And they’re right – as long as we agree that success, unlike expertise, is a social construct.

UPDATE: Seth Finkelstein points out that Clay Shirky adds a clarification in the comments to his post: “I should have been clearer that I’m talking about the distinction between having expertise and being an expert. The latter category is where issues of authority come in, and what seems to get Sanger worked up is his belief that the overlap of expertise and experts is large.” More discussion follows in the comments to this post.

UPDATE: Larry Sanger has responded to Clay Shirky.

David Berlind, fresh from a dinner hosted by storage giant EMC, thinks the time has come for small and medium-sized businesses (SMBs) to stop rolling their own information technology: “Call me crazy. But it seems to me that the [IT] industry has finally evolved to a point where selling infrastructure (including storage) to SMBs should be like selling regular gasoline to the driver of a truck that runs on diesel fuel. Whether you’re at an existing SMB or about to start one up, it makes almost no sense to insource any IT. Especially IT infrastructure like servers and storage.” The SMBs that can still justify owning their own IT infrastructure, he writes, “are fewer and farther between and if you ask me, sales in the SMB infrastructure channel are basically surviving on a myth: the myth that SMBs should be insourcing.”

I would call it more a habit than a myth – the ability for companies to jettison most or all of their in-house IT infrastructure is a recent development – but I think he’s right. Ironically, even as many smaller companies are embracing hardware hosting, software-as-a-service, and other forms of utility computing, many others are currently building up their IT assets, drawn by low component costs. I think those companies are going to end up regretting a lot of the investments they’re making. They’ll soon find that the highest IT costs aren’t component costs but labor costs, maintenance costs, electricity costs, and other secondary expenses – and that owning your own gear ends up reducing your flexibility rather than increasing it.

Berlind reports that EMC’s CTO, Jeff Nick, agrees. During the dinner, he made “a comment about how most all IT functionality should be delivered as a service. By the end of the conversation, Nick was talking about how EMC’s long term focus (in terms of selling infrastructure) should not be to push storage on SMBs themselves, but rather, to help make the service providers to which those SMBs should be outsourcing their IT more successful at providing those services.” On the server side, that seems to be Sun’s emerging strategy as well: For SMBs at least, don’t supply the end-user; supply the utility.

As I described last year in my article The End of Corporate Computing, back when electric utilites first emerged, it was the smaller companies who led the way in hooking up to the shared grid. The prospect of avoiding big capital expenses and high labor costs, and all the associated headaches of owning a lot of specialized technology, outweighed the risks involved in moving to a new supply model. The same thing’s happening with IT today. Big companies, with lots of capital and lots of legacy systems, may be able to justify building their own internel IT utilities – they can gain considerable economies of scale on their own – but the equation’s very different for SMBs. As Berlind suggests, SMBs today would be well advised to approach their IT requirements – both hardware and software – with the assumption that they should be buying services, not assets. Sure, there’ll be plenty of exceptions, but that should be the going-in assumption. If IT isn’t your business, get out of the IT business.