Bits, Bytes & Rewrites

If he had it to do over, Don Tapscott might make a few minor changes in his third and latest book, Digital Capital, co-authored with David Ticoll and Alex Lowy.

Name: Don Tapscott

Title: Author, consultant

Web Info:

Claim to Fame: Digital economy documenter

If he had it to do over, Don Tapscott might make a few minor changes in his third and latest book, Digital Capital, co-authored with David Ticoll and Alex Lowy. For example, Tapscott might have been a tad less effusive in describing Cisco Systems, which began experiencing inventory migraines just weeks after the book was completed in February 2000.

But the author insists that the fundamental premise of the book—that five distinct types of partner networks, or "b-webs," are changing the nature of the corporation and how it creates wealth—is in no way tarnished by the dot-bomb debacle and the subsequent collapse of the high-tech market.

"The real meaning of the Internet is not creating Web sites or dot-coms, or about eyeballs, clicks or stickiness," argues Tapscott, who like a lot of consultants is supremely confident in his own opinions. "It actually turns out that eyeballs are the wrong body part. Its the heart that counts—partner relationships. What we said in the book is that the Internet, as a universal communications medium, has turned the traditional vertically integrated corporation into toast. And that has been going on since before the crash and is going on now."

Indeed, continues Tapscott, the awesome transformation outlined in the book is well under way in the steel, gas distribution, chemical, banking, software and furniture manufacturing industries, to name just a few. In revisiting some 19 months later the specific b-web examples cited in the book, Tapscott says the vast majority of them, like Enron, Schwab, E*Trade and Linux, hold up very well on reexamination. Even Cisco, the poster child for the b-web known as the "Web-enabled value chain," remains a great company that simply got carried away and failed to heed the warnings in its own sales data.

All this is not to say, however, that the industry meltdown is a nonevent.

Tapscott warns against the "new fundamentalism" that is taking root throughout the economy. Pundits are making a living preaching a new orthodoxy—that e-biz was a silly concept to begin with, and that all you need to succeed in business is to turn the clock back 20 years and rely on the tried-and-true concepts.

Moreover, Tapscott laments that in the current market environment, many viable technology companies that cant get second- or third-round funding are disappearing down the drain along with the neer-do-wells. This is never a good thing for the industry, he says.

Generally speaking, Tapscott is high on providers of third-party services and solutions, because customers increasingly will focus on their core competencies and use their partner b-webs to handle everything else. IBM represents a classic case. The company mothballed its CRM product because it didnt measure up to the competition, and now Big Blue generates a whopping $2 billion in sales through its CRM partnership with Siebel.

Nevertheless, says Tapscott, a healthy outlook for service providers doesnt mean a new generation of dinosaurs. "In this new environment, its too much to start from scratch and create something huge, so you wont see anymore EDSes and Accentures. But there will be tremendous opportunities for smaller companies that are good at designing secure systems, architecting new business models and implementing CRM."