We've always had a tension between enterprise design practices and a "small pieces, loosely joined" way of making software, to use David Weinberger's felicitous phrase. The advantages to the latter are in part described in Worse is Better and The Cathedral and the Bazaar. Situated software is in the small pieces category, with the following additional characteristic -- it is designed for use by a specific social group, rather than for a generic set of "users". This will carry some obvious downsides, including tying the developers of such applications to community support roles, and shortening the useful lifespan of the software made in this way.

Situated software isn't a technological strategy so much as an attitude about closeness of fit between software and its group of users, and a refusal to embrace scale, generality or completeness as unqualified virtues. Seen in this light, the obsession with personalization of Web School software is an apology for the obvious truth -- most web applications are impersonal by design, as they are built for a generic user. Now, though, I think we're starting to see a new software niche, where communities get form-fit tools for very particular needs, tools that fail most previous test of design quality or success, but which nevertheless function well, because they are so well situated in the community that uses them.

Situated Software (summarized)
1

It started with a woman who was an interface designer. Her husband was a jeweller, and he'd died of that nerve-attenuation thing, before they saw how to fix it. But he'd been a big green, too, and he hated the way consumer electronics were made, a couple of little chips and boards inside these plastic shells. The shells were just point-of- purchase eye candy, he said, made to wind up in the landfill if nobody recycled it, and usually nobody did. So, before he got sick, he used to tear up her hardware, the designer's, and put the real parts into cases he'd made in his shop. Say he'd make a solid bronze case for a minidisc unit, ebony inlays, carve the control surfaces out of fossil ivory, turquoise, rock crystal. It weighed more, sure, but it turned out a lot of people liked that, like they had their music or their memory, whatever, in something that felt like it was there. . . . And people liked touching all that stuff: metal, a smooth stone. . . . And once you had the case, when a manufacturer brought out a new model, well, if the electronics were any better, you just pulled the old ones out and put the new ones in your case. So you still had the same object, just with better functions. And it turned out some people liked that, too, liked it a lot. He started getting commissions to make these things. One of the first was for a keyboard, and the keys were cut from the keys of an old piano, with the numbers and letters in silver. But then he got sick . . . So after he was dead, the software designer started thinking about all that, and how she wanted to do something that took what he'd been doing into something else. so she cashed in her stock in all the companies she'd worked for, and she bought some land on the coast, in Oregon---

William Gibson, Sandbenders
···