Remember after the bubble burst how people predicted the demise of Amazon, Yahoo and all the other online-only ventures? Obviously, this hasn't happened. More often than not, the major dot-coms have routed their brick-and-mortar competitors, and their ranks have continued to grow. Apple 's iTunes came out of nowhere to transform the music industry, Google is generating bubblelike fortunes, and tiny Skype has shown just how vulnerable the telephone business really is. In Silicon Valley, the venture capitalists are once again touting the giants of tomorrow, and another hiring frenzy has begun.

Symbolically, Bill Gates has written another one of his famous "leaked" memos. If you haven't seen either Gates' recent e-mail or the much longer one by Microsoft CTO Ray Ozzie, they lay out three major new threats/opportunities for Microsoft: the emergence of the Web as a platform (what's generally known as Web 2.0), the power of advertising-based IT business models not just for consumers but for the enterprise, and the many strengths of providing software as a service. Taken together, these trends constitute a more serious challenge to Microsoft than Netscape once did.

People always forget just how cyclical the IT industry really is. Looking back over just the past 25 years, there have been four peaks and valleys. There was the five-year boom that corresponded with IBM 's last heyday from 1981 to 1986, followed by a five-year trough until 1992 as U.S. companies felt the pressure from Japan. Then came the long Internet-driven boom and eventual burst of the bubble in 2000 when the perceived false alarms of Y2k, the excessive hype of the dot-com craze and the shock of 9/11 put the brakes on technology spending and shortened business horizons. This downturn now seems to be over.

Someday, historians might well conclude that the nadir of this last down cycle was the publication of Nick Carr's controversial article "IT Doesn't Matter" in the Harvard Business Review in the spring of 2003. Could you imagine such a piece being written in, say, 1998? While the article was never persuasive, it captured the spirit of its time, expressing a pessimism as excessive as the bubble itself. Indeed, Carr's article can be seen as an insult gone too far, and since then, the prospects for the IT business have been steadily improving.

History suggests that such up cycles tend to last at least five years, and thus a powerful period of progress may well lie ahead. I have been arguing for some time that the next 10 years in the IT business will have more impact on business and society than the previous 10. When you consider that 10 years ago there was little e-mail, almost no e-commerce and very limited mobility, this is not an insignificant statement. But as the power of the Web becomes ever more apparent, one can once again make such statements without getting laughed out of the room. Just don't mention the phrase "new economy." That was always a loser.