Carr suggests that if this can happen within one company, it can easily happen between different, competing companies. The homogenizing effect of IT is in place.

He particularly notes Bill Gates's comment, in his book The Road Ahead, that the Internet is the foundation for "friction-free capitalism", of perfect competition without barriers, leading to a "shopper's heaven".

"What Gates failed to point out is that a shopper's heaven is a business executive's hell," Carr responds. "When it comes to markets, friction is often just another word for profit."

"By erasing many traditional operating advantages and making companies' processes and prices more transparent to customers, IT threatens to become a kind of universal solvent of business strategy, speeding up the natural forces that over time push companies toward competitive parity . . . As buyers become more powerful and business processes and systems more homogeneous, only the strategically astute companies will be able to rise above the competitive free-for-all."

But that's only the half of it.

In the final chapter of his book, entitled "A Dream of Wonderful Machines - The reading and misreading of technological change", Carr broadens his picture beyond intra-company operation and inter-company competition to look at the global economy and the impact of the increased productivity that everyone says IT will bring. (The most recent "State of the CIO" survey published in these pages had increased productivity as the number one impact IT would have on the enterprise.)

"It's not about CIOs or IT departments or even the [IT] industry; it's about the nature of information technology. Particularly in a knowledge-based service-based economy where the physical assets of your company become relatively less important, IT increasingly defines the way you do some basic processes in your business. The software literally defines the process," Carr says.

"I think the danger when the software becomes commoditized, and one step further becomes outsourced, the process too becomes commoditized. I don't think this is unusual when a new technology comes along, it neutralizes some of the advantages you once had. The danger with IT is its neutralizing effect is potentially so great, because it's built into so many processes."

Following on from a small sidebar in his original article (entitled "Too Much of a Good Thing", largely ignored at the time), Carr draws parallels between current investment in IT with over-investment in railroads in the 1860s. In this breakout he writes: "In both cases, companies and individuals, dazzled by the seemingly unlimited commercial possibilities of the technologies, threw large quantities of money away on half-baked businesses and products. Even worse, the flood of capital led to enormous over-capacity, devastating entire industries."

The depression of the latter half of the 19th century was brought on, he says, by the railroad boom, and the development of the steam engine and the telegraph. This helped produce not only widespread industrial over-capacity but a surge in productivity, setting the stage for two (in the book he says three) decades of deflation, collapsing prices and evaporating business profits. "Companies watched the value of their products erode while they were in the very process of making them."

New technologies often have unexpected effects, and some of those unexpected effects can be quite negative, Carr says. "Something that we all take for granted as a positive, like increased productivity, can have negative implications. If you increase productivity too quickly - more quickly than your economy grows - then you're going to put a lot of people out of work."

In a downbeat final paragraph for his book, he warns: "We should not be complacent about the intensification of deflationary pressures, the shift of skilled technical jobs to low-labour-cost countries, and the erosion of traditional competitive advantages. While information technology isn't changing everything, it is changing many things. Some of the changes are for the better and some are for the worse, but all demand close and clear-eyed attention."

Not everyone agrees, of course, and Carr says he is yet to hear from historians and economists on his prognosis. But his views are definitely in stark contrast to those expressed by Steve Ballmer, CEO of Microsoft, at his company's May 2003 Tech Ed event in San Diego. Ballmer is no fan of Carr. Soon after the original article appeared, Ballmer responded: "Our fundamental response to that is: hogwash." He then went on to say: "We look out there like kids in a candy store saying: 'What a great world we live in.' "

This view of the world was mirrored in a more recent speech where Ballmer observed: "I think the next 10 years will bring more positive change and innovation than in the last 10 years. We have a chance, all of us in this room, to change the world in a positive way." He reportedly included natural language, artificial intelligence and improved search, mobility and interoperability as the main areas for innovation. He also said that IT is probably the top transformer of society today, in addition to health-care and education.