Daniel Wood's Profile

I could go to school like everybody else and play baseball and football, which I did."

Detractors have faulted Maazel for being disengaged. But Maazel likens himself to the first violinist in a string quartet, which he once was — a leader among fellow musicians. And, as an American, authoritarianism did not come naturally.

"But if you respect the people you're working with, you don't start shaking your fist at them. It's also true at home. No child, and I've had seven of them, has ever felt my hand. An intelligent parent learns very quickly about the importance of the alternative. Rather than saying, 'Don't do that,' why not say 'Do this.' "

"You don't talk; you do.

If you have to stop and look around and say, 'It's not together,' just walk off the podium and go home. Because that's your job, to get it together. If it's not together, it's your problem, not theirs."

For most companies, just staying in business will require big outlays for IT. What’s important – and this holds true for any commodity input – is to be able to separate essential investments from ones that are discretionary, unnecessary, or even counterproductive.

Much of that spending, if truth be told, is driven by vendors’ strategies. Big hardware and software suppliers have become very good at parceling out new features and capabilities in ways that force companies into buying new computers, applications, and networking equipment much more frequently than they need to.

In addition to being passive in their purchasing, companies have been sloppy in their use of IT. That’s particularly true with data storage, which has come to account for more than half of many companies’ IT expenditures. The bulk of what’s being stored on corporate networks has little to do with making products or serving customers – it consists of employees’ saved e-mails and files, including terabytes of spam, MP3s, and video clips. Computerworld estimates that as much as 70% of the storage capacity of a typical Windows network is wasted – an enormous unnecessary expense. Restricting employees’ ability to save files indiscriminately and indefinitely may seem distasteful to many managers, but it can have a real impact on the bottom line. Now that IT has become the dominant capital expense for most businesses, there’s no excuse for waste and sloppiness

While no one can say precisely when the buildout of an infrastructural technology has concluded, there are many signs that the IT buildout is much closer to its end than its beginning. First, IT’s power is outstripping most of the business needs it fulfills. Second, the price of essential IT functionality has dropped to the point where it is more or less affordable to all. Third, the capacity of the universal distribution network (the Internet) has caught up with demand – indeed, we already have considerably more fiber-optic capacity than we need. Fourth, IT vendors are rushing to position themselves as commodity suppliers or even as utilities. Finally, and most definitively, the investment bubble has burst, which historically has been a clear indication that an infrastructural technology is reaching the end of its buildout. A few companies may still be able to wrest advantages from highly specialized applications that don’t offer strong economic incentives for replication, but those firms will be the exceptions that prove the rule.

The cost of processing power has dropped relentlessly, from $480 per million instructions per second (MIPS) in 1978 to $50 per MIPS in 1985 to $4 per MIPS in 1995, a trend that continues unabated. Similar declines have occurred in the cost of data storage and transmission.

The rapidly increasing affordability of IT functionality has not only democratized the computer revolution, it has destroyed one of the most important potential barriers to competitors. Even the most cutting-edge IT capabilities quickly become available to all.

During the last quarter of the twentieth century, the computational power of a microprocessor increased by a factor of 66,000. In the dozen years from 1989 to 2001, the number of host computers connected to the Internet grew from 80,000 to more than 125 million. Over the last ten years, the number of sites on the World Wide Web has grown from zero to nearly 40 million. And since the 1980s, more than 280 million miles of fiber-optic cable have been installed – enough, as Business Week recently noted, to “circle the earth 11,320 times.”

The only meaningful advantage most companies can hope to gain from an infrastructural technology after its buildout is a cost advantage – and even that tends to be very hard to sustain.

The point is, however, that the technology’s potential for differentiating one company from the pack – its strategic potential – inexorably declines as it becomes accessible and affordable to all.