The constant debate in software circles on various development models and which are better is rather passe. What is more important (IMNSHO) is for the vendors to forget the release cycles, the new "features" and other such currently irrelevant marketing ploys and look at the core functionality. Maybe Microsoft's talk of restructuring the company is good and will be applauded by the industry pundits and wall street mavens. (Who rave at anything M$ will do irrespective of how much sense it makes), but its really a question too little too late. The smart pack in IT has already moved beyond applications and unnecessary features to CONTENT. Goggle, Yahoo! And for that matter most web based guys have figured out that interface can only take you so far. They have also figured that people use the applications because of the content available! Goggle maps and the new digital library are spot on. Open standards, great functionality (as opposed to stupid paper clips dancing around as "features") simple interface, attention to detail and REAL CONTENT. This is the new mantra. The graphical user interface is still around as the primary mode of access simply as work on natural language processing has not yet hit critical mass. Who wants to point and click when you can "tell" the machine what to do ? you want to use the monitor to "see" things not for absolute control. The web model has to an extent thinned down the visual user interface and the only reason goggle will use flash or similar vector based rendering platform is if the content type requires it, not to provide eye candy.
In this the IT world has matured. From being mere number crunchers and word processors usage of computing has now moved to the next level where the utility is innovative content presentation.