When Nicholas Carr’s seminal Does IT Matter? Information Technology and the Corrosion of Competitive Advantage was published in 2004 it caused a storm. In the book the technology guru argued that the traditional IT department would die off as business technology became increasingly commoditised.

At the time both industry watchers and IT vendors reacted angrily and with scepticism, criticising Carr’s claims and dismissing his ideas. Carr, however, was and remains unmoved. “It is hard to tell how broad opposition to something is. A strong vocal minority can build itself into a large presence in the blogosphere,” he argued.

Now, however, in a world where most firms are rushing to release software and services on a hosted basis, Carr feels vindicated. “Much of what I said has become the common wisdom. When the book first came out the IT suppliers said that I was wrong, but a lot of corporate IT has become commoditised, just as I predicted,” he said. “Basic software has been standardised, it is deeper now and more and more people are putting their trust in it.”

Carr has since released another, less controversial book. The Big Switch: Rewiring the World, From Edison to Google was published in January 2008, and in it Carr describes the rise of internet-based computing, comparing it to the early days of electricity. He believes that this could also lead to changes in IT departments.

“In the long term, the IT department is unlikely to survive in its familiar form,” he said. “And the changes are likely to be felt over the next decade or so. Ultimately, the IT department will be reshaped by the technology that it uses and will emerge in a much different form. It will have much less of a focus on keeping the technology ticking over, and will be much more focused on management.”

Carr sat down with IT Week during a visit to the UK last month to speak at the Search Engine Strategy show in London, where he discussed some of the issues covered in his new book, and the increasing role of search engine advertising as a medium to reach staff, partners and consumers.

Although firms such as Google and Yahoo already offer an impressive range of advertising options and platforms, Carr said that their technologies are still evolving ­ not quite in their infancy, but still some way from being fully mature. “I don’t think that we are at the peak of their capabilities. There is a lot of room for expansion in the services that they offer. And these web businesses will find that they almost could not exist without having data storage plans in place,” he explained.

However, he concedes that these firms have many other things to consider, not least of which is personal privacy. “[Online ad-serving] is based on the ability to collect large amounts of personal information about who you are and what you do online. But, there is a very fine line between being highly personalised and trampling into areas that internet users are not comfortable with,” Carr said. “We have seen instances of things being released that appear to go beyond the boundaries of what people are comfortable with. But in general I think people will trade off personal information if it is a service, or a system, that they are comfortable with.”

When people in the UK are not worrying about privacy they invariably turn their attention to green issues, something that Carr said is not yet that important in the US, mainly because there is no real push for it from regulators.

“There has been a lot of talk about the environmental impact of IT, but not a lot of pressure to adopt [greener technologies] in the US. Firms are more likely to act if [they see a quick return]. There is more of a push for this sort of thing in consumer products. But even there we have a long way to go before people start to take a personal interest and action,” he said.

Carr argued that rising energy costs will help to bring a change in mindset. Companies are building large datacentres and the cost of electricity continues to rise. In the past companies have been able to ignore the electricity component, but now, as costs grow, suppliers, providers and firms with a vested interest are all becoming concerned. They want to try and lessen these costs,” he said.

Carr believes that eventually the penny will drop about the damage all this energy consumption is doing to the planet. “People are beginning to realise the amount of power that they are using, and the effect that this has on the environment,” he said. “I think that we will see greater pushes for firms to improve their energy efficiency. There will be a push towards technologies such as virtualisation, and greater consolidation ­ both within and across companies.”