It's still early days in the transition to Enterprise 2.0 capitalism. To understand how it's playing out, consider where the action is: the IT sales cycle. First of a three-part series.

First of a three-part series. Click for Part II and Part III.

If you think Enterprise 1.0 has been retiring gracefully, handing power over to Enterprise 2.0 in a bloodless succession, you haven't talked to a sufficient number of adequately liquored-up people in the trenches. Or you've been forgetting to take your Dilbert vitamins.

To understand how individual battles are playing out in these early days of the war for the soul of capitalism, you need to look at the IT sales cycle, where much of the action is concentrated.

Why is it important to look at the sales cycle? Because that's where the mix of privately believed and publicly paraded visions collide. It's where salespeople make the tough decision: whether to pander to customers' (or their own) delusions to close a sale, or make a sincere effort to work with prospects to discover the defensible truths, whether or not they help close the sale.

The enterprise IT sales cycle used to have a certain leisurely, ritual-like quality to it. Vendors would slowly discover the organization through networking, build up good relationships with the purchasing and IT organizations, and get to know the middle managers of the organization they were targeting. They'd study the organization chart and figure out the best lines of access to the level at which the decision they wanted could be made. Usually, this meant senior executive: VP or higher.

They'd help their internal champions set up the committees and lay the paper trail--internal seminars, case studies, benchmarking exercises, town hall meetings, and seminars--upon which to base their recommendations. Once the dog-and-pony show gathered enough momentum, the stage would be set for a multimillion-dollar sale. All stakeholders would be protected by reams of paper justifying their roles in the recommendation to be presented to the C-suiters in the Big Meeting.

It was a sales cycle tailored to the waterfall model of enterprise IT planning. (It's surprising how few people recognize the irony that the hearts of capitalism are governed by Soviet-style five-year-plan thinking.) The purpose was to engineer not the best decisions, but the most defensible decisions. Decisions for which nobody could get fired.

The result? Across the corporate landscape through the 1990s, we saw a proliferation of vast and clunky IT infrastructure systems designed by hapless developers listening to middle management sadomasochists who would be the future administrators, rather than the users, of those systems.

The outcome, of course, was systems whose usability was a low priority. In the age of paper bureaucracies, it used to be said that forms were designed to protect those who had to process them, not serve those who had to fill them out. In Enterprise 1.0, that philosophy migrated to IT process design.

It was an IT approach designed to keep middle managers safely employed in sinecures, and armies of rank-and-file employees trapped in cubicle-dom, ranting against everything from travel expense reporting to procurement planning. Cartoonists like Scott Adams were the only beneficiaries.

That great work got done despite these enormous burdens was a testament to the valor of the employees. It's no surprise that Atlas Shrugged has been the leading fantasy novel of the Industrial Age.

The Theory Of Enterprise 2.0 IT Sales

Then Enterprise 2.0 came along with a startling alternative model: The IT selling process, like the product design, should serve end users, not bureaucrats and administrators. It's practiced today with varying degrees of success by every 2.0 vendor. In theory, this is how it's supposed to work:

Phase 1: Start on the wild periphery. Ignore the middle-management level; drive up adoption among the rule-breaking experimental types in the rank-and-file with the free version.