Lunch with John Patrick John Patrick was one of the guys who got IBM turned onto the web, and he remains unfashionably pro-Internet today. I had lunch with him today, and then heard him speak to a larger group about where he thought the Internet was going.

John's a pretty famous guy, and was instrumental in getting IBMs Fortune 500 customers (which is all of them) "e"-iffying their businesses. To this day, he feels the Internet holds tremendous promise for business and that the digital transformation is only "2% done". He points out lame corporate sites forcing visitors to dial some 800 number, M-F 9-5, as indicating how corporate america still doesn't get it.

Corporate America may not get the Internet, but I don't think it needs to. Offering better service over the Internet for an established company is just a form of non-price competition, which is fine if you're the only guy doing it but kind of stupid if all your competitors are just going to imitate you. And 24 hour call centers are very imitable.

I think companies are right to do as little as possible in moving their business online. They'll have to get there eventually, but rushing is too much like competition, which is bad for everyone's profits. The executive clueless that John derides is enforcing industry-wide non-compete agreements, which is pretty funny.

Startups built around the network are the only things that will change mainstream business. eBay is shaking up retail, durable goods, and newspapers (who make most of their money off classifieds); the Napster successors are shaking up music, weblogs are shaking up trade magazines (but not newspapers, the Op-Ed page doesn't make any money), and GNU/Linux is shaking up operating system companies. These are the true Internet organizations where new value is being created, old line companies becoming moving to the Internet are just passing it onto their customers.