(Insert pun on book title here)

Carr makes sweeping conclusions and writes with conviction. This makes for a good read, but also opens him to criticisms. Below are some significant ones, most at least touched on by other posters.

Distribution Costs:
As Mr. James notes, bandwidth may not be as cheap as Carr suggests, and may remain an obstacle to centralization of IT. Centralizing only makes sense if the savings from economies of scale exceed distribution costs. If the pipes are narrow, this is less likely to be true. This is essentially an empirical question, but it is certainly less clear-cut than Carr seems to think. It seems quite likely that distribution - not generation - will be the bottleneck for some time, if not forever. I don't think this is the case for electricity, and the difference strikes at the heart of the analogy on which the book is based. Still, I don't have the facts. Carr may be right here.

Privacy:
Mr. James and Mr. Bednarz note that people and firms might be less willing to use outside utility IT resources if they believe their secret data might become public in the process. This concern is larger in some contexts than others (the NSA and Swiss banks will likely never use utility computing), but seems real enough. As Carr points out, there were more or less rational fears about electricity as it was becoming a utility as well. In fact, an argument can be made that centralized computing might be more secure. Companies today have plenty of problems with data security, often due to a lack of good security practices. Centralized IT firms are likely to take security very seriously, and be quite professional about it (the sucess of their business depends on it). Certainly the damage caused by a breach at a big data center would be more severe than your average lost laptop, but if such breaches are much less frequent, the long-term average damage would be less. Think of it like driving vs. flying - plane crashes will probably kill lots of people at once, but driving is far more dangerous because accidents are more frequent. In short, I don't think privacy will be much of an obstacle to the trends Carr claims to foresee.

Costs of Commoditization:
All electricity consumers want the same thing. That might not, or might not yet be true with IT. I agree with Mr. Bednarz, though, that we are pretty close to that point already. Even to the extent that we are not, cheap computing power makes a great deal of customization possible. Mr. Cottrell points out that crossplatform code is much more inefficient - that is certainly true, but who cares when CPU power is so cheap? People give up their CPU time FOR FREE to FIND ALIENS! I run virtualization software on my Mac laptop to emulate MS-DOS. It takes a substantial slice of my system resources to do this, which seems silly when you consider how much more powerful my system is than a 386-class PC, but I don't care. Computing power, more than ever, is just about the cheapest resource on the planet. Providing different IT "goods" to different customers is therefore not a significant challenge.

Limited Advantages:
If computing power is so cheap, it ultimately limits the economy of scale advantages of centralization. (Mr. Cottrell touches on this point). For most applications, a single modern PC is more than enough to get the job done. Microprocessors now inhabit almost every consumer device, and are in almost all cases far more powerful than necessary.  My toaster has a microchip in it (the toast is still burnt, however). Sure, if you're Google, it makes sense to centralize the resources you use, and companies have long considered thin client setups, but why pay distribution costs (bandwidth, see above), when putting computing power where it is needed is so cheap? Consider this analogy: why don't we power our cars through the grid (presumably as plug-in electrics). The answer is simply that the internal combustion engine, while far less efficient than the steam turbines at power plants, is just fine when gas is cheap (as it remains, considering the energy contained within). In fact, the only reason plug-in cars are considered a good idea now is that we are beginning to consider the negative externalities of carbon emissions. If you pretend those don't exist - as we have been for the past century - centralization of energy for cars doesn't make sense. Just like cheap gas makes electric cars a poor option, cheap computing power makes central supply of IT much less attractive. Carr talks about Moore's Law, but doesn't give sufficient attention to how much it can undercut his predictions.

Regulation:
If Carr is right, it is possible that a single computing utility firm will emerge, with the power to restrict output and harm consumers. Certainly the tiny marginal costs (probably more important than the large fixed costs Mr. James mentions) of centralized IT generation make this possible. I am more optimistic than Mr. James is, however, about the ability of law and government to deal with the problem. Mr. James, it seems, would have had us keep the pre-Insull model of electricity generation because of the dangers of natural monopoly raised by utilities. If computing power is centralized as Mr. Carr predicts, and if a single firm emerges, the market will have clearly shown that the benefits of centralization are large. The costs to consumers can be kept down by the standard regulatory toolkit - rate regulation, price caps, divestiture etc. Sure, these can be inefficient, complex to implement, or even co-opted by industry, but would we really prefer the alternative?

Furthermore, as Mr. James also notes, the heterogeneity of demand and low entry costs associated with the market for computing make the emergence of a stable monopolist less likely than it would at first appear. In short, I'm not worried about this problem. It may not arise, and if it does, it is one we know how to manage.

So what?

Given these objections, where do I stand on Carr's predictions? I have to reserve final judgment until I finish the book. So far, however, I think Carr is right that centralized "generation" of IT is here and will be a big deal in the near future. This is noncontroversial, however, and is easy to see just by looking at Google Apps, Salesforce.com, and the long history of the thin client movement. The more radical version of his thesis, that there will simply be one World Wide Computer, seems much more questionable, given the more damning objections mentioned above. Still, I'll give Carr a fair shot to defend it in the second half of the book.