An engine of the world economy—the computer industry—is sputtering. What happened? Will it regain its power and again drive economic growth as in the past?

No.

That’s the surprising conclusion reached by Erik Keller, a central player in the booming IT world of the 1990s. Driven by fear of being left behind, American corporations let IT grow until it reached one half of all corporate capital spending by the year 2000. Now, chastened by their spending failures, IT managers are converging on a new consensus: to exploit IT competitively they must use their smarts over big money.

This shift in thinking comes just as free, open-source software, low-cost international programming labor, and new technologies combine to make the new approach possible.

A former Research Fellow at Gartner, Keller had an insider’s view of the irrational spending at many Fortune 500 companies, personally influencing billions of dollars of technology acquisitions.

In Technology Paradise Lost Keller describes how the new thinking is working inside some of the country’s most complex and successful organizations, including Merrill Lynch, JetBlue, Harrah’s, and Motorola, which have cut IT spending to gain a competitive edge, and experienced marked gains to their bottom lines.

As it advances, the new IT-think will cause further massive disruptions in the computer business, with fundamental changes in the ways software is developed, sold, and used. Efficiency of IT investment will grow as excess fat is squeezed out of IT salaries, software system costs, and consultants’ fees.

In an unexpected twist, Keller argues that even as IT spending is reduced its importance for competitiveness will grow. Reduced spending does not mean IT has become a commodity. Counterintuitively, companies that spend less in order to get more from information technology will likely be the big winners.

New perspective on the realities of software development
Eric Keller really hits home with both facts and anecdotal evidence supporting his claims that there is a shift happening in the IT industry. HIs claim is that through a combination of outsourcing, project and asset management companies both on the buying and selling sides of the IT fence will spend less to get more.

The book is organized as you would expect. The first few chapters cover current problems in the industry with quality and project failures. Though the outlook is gloomy most chapters end with a 'survival guide' which gives some pragmatic advice to avoid the pitfalls and problems mentioned in the chapter.

The second part of the book lays out a set of IT spending and management paths. The path he would have you go on is the 'path to profits' which reduces and optimizes spending through outsourcing and intelligent use of local resources and assets.

The book is definitely in the same league as The Mythical Man Month, The Decline and Fall of the American Programmer, and the Rise and Resurrection of the American Programmer. I can't say if it's better or worse, but I'm not sure it's relevant. If you enjoyed any of these source works you will enjoy and learn from this book.