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Whither Web 2.0?

Beverley Head, Information Age

17/08/2007 14:18:07

Within three years, today's online population of 800 million is tipped to soar to 1.6 billion. By the end of this year, forecasts indicate 3 billion people will have mobile phones.

All of them are accessing, and increasingly creating, digital content - sending e-mails, texts, photos, videos. All of them have the expectation that they will be able to access information anytime, anywhere.

The ICT infrastructure and organisational challenges of this brave new world are enormous.

"The Web isn't growing, it's exploding," according to Conleth O'Connell, chief technology officer of Web content management software supplier Vignette.

O'Connell, a speaker at AMP's recent Innovation and Thought Leadership Festival, says consumers are moving on from their Web 1.0 expectations where information was fed to them, to a Web 2.0 world where communication and collaboration is two-way. In Web 2.0 "one of the premises is that the user is in control", said O'Connell.

Adam Radford is a systems architect for Cisco who also believes that commerce is on the cusp of a major change. "But the term Web 2.0 does not capture the fundamental nature of that change," he warned. "We are on the cusp of a collaboration revolution - a fundamental change in the way we relate to one another, to business and the way internal operations of business is structured."

Not everyone is convinced every company will race to embrace Web 2.0 models however.

Chris Smith, general manager of Sensis Interactive, for example believes that there is still a risk hurdle to overcome before some of the collaboration tools of the Web 2.0 era are accepted by mainstream Australian companies.

Speaking at a conference organised by the Future Exploration Network in June, Smith said: "Web 2.0 is being driven out of the US. The footprint of Web 2.0 in Australia is really vacant. There is a lack of 2.0 capability here, although there are lots of Australians using Web 2.0 - YouTube and MySpace - Australia is lagging in innovation technology."

He believes some clue as to the slow progress comes from the corporate perspective that encouraging blogs and wikis increases the risk profile of the enterprise. "There's a lot of struggle at the executive level about why you need to adopt Web 2.0. Where is the ROI?"

Radford believes the return on investment comes from the increased collaboration Web 2.0 permits: mass collaboration where business collaborates with customers online (he points to online banking as an early example of how that changes the relationship between corporation and customer); external collaboration with other enterprises in order to deliver products and services (which Radford acknowledges raises significant issues regarding corporate transparency and trust); and finally, internal collaboration where business groups are not siloed into say HR, marketing, product development - but work in a more cohesive and collaborative manner.

He says that Cisco itself has been going through a transformation, moving away from a command and control structure to one of leadership and collaboration. This aligns with the theories of Jon Husband, a UK-based consultant who describes himself as a techno-anthropologist.

Husband believes that in a collaborative and connected age, traditional hierarchies will be replaced by what he calls wirearchies. His working definition of wirearchy is "a dynamic two-way flow of power and authority based on knowledge, credibility, trust and a focus on results, enabled by interconnected people and technology.

"More colloquially, it's becoming conventional wisdom everywhere these days that customers and users have more power because of the ubiquitous and rapid access to information and their ability to retrieve, create and share useful information.

"Think of the phrase "knowledge Is power" which is almost universally accepted, and then think of the effects of much wider and more rapid decentralised distribution and use. The printing press changed society and governance over a couple of hundred years. Will the Web do the same thing? Seems so, to date, but on a faster schedule."

So are today's businesses ready for the shift? He accepts that there is inertia associated with existing industrial era management.

But, he asserts: "Wirearchies will grow if and as organisations want, or decide, to become more responsive, seek more and more frequent innovation through finding ways to access and enable the talent, creativity, responsibility and wisdom of knowledge workers, especially as more and more IT and Web-savvy workers move into the workplace.

"This is, of course, starting to happen because of demographics, the growth and spread of the Web and easy-to-use Web services, widgets and more flexible IT platforms."

However, even after management inertia is overcome, existing IT infrastructure can prove another barrier to Web 2.0: "Many medium and large organisations have big investments in large, integrated ERP systems, such as SAP. Letting go of these, or changing their role in the organisation's operations will be difficult for them.

"Like most organisational changes involving people, I think the main champions will need to be line mangers and dedicated professionals who see it is a better way to do things -- those things and types of work that lend themselves to, or require, real collaboration," according to Husband.

Adam Radford, meanwhile, believes that "architects and architecture are the catalysts for (Web) 2.0 because we are moving away from transactions to interactions with the customer".

He warns, though, that the temptation to overdose the customer-corporate interaction with technology should be avoided. "This is not an extreme pendulum. It should not be totally technology-based or totally people-based - the answer is balance."

He is optimistic that technologies such as tele-presence will in the future provide the bridging experience between human interaction and technical connection.

"Technology delivers collaboration - collaboration is not technology," he warned, admitting that the tools and technologies needed to underpin collaborative opportunities remain fragmented, tossing up yet another challenge for the IT groups charged with providing the infrastructure to enable collaboration.

Even so, "my view of the future is that it is the architecture that facilitates change. Banks talk about being in charge of an aircraft carrier which is slow to move and to turn. They want to be more like a canoe - to be agile.

"As large organisations recognise the threat they are changing and changing dynamically, constructing solutions on the fly."

Radford makes it all sound free and easy - but embarking on Web 2.0 initiatives without attending to the nitty gritty of IT infrastructure can be risky. Take storage for example - when a Web 2.0 initiative takes off and people flock to it, storage requirements can rise 15-20 per cent a week according to Hitachi Data Systems' Simon Elisha.

The head solutions architect for HDS's southern region, Elisha says he's come across start-up Web 2.0 companies where the demand for storage was rising so quickly that people had been forced to gaffer tape hard drives to servers as stop-gap solutions.

Web 2.0 companies are often established using open source LAMP (Linux, Apache, My SQL and PHP) platforms. Once they're up and running, and if they are successful, these start-up businesses quickly need to roll out very robust back ends to support rapid growth in demand.

"The infrastructure required will be very rapid, very dynamic and needs to cope with a real spike up in demand when these companies are successful," said Elisha. Companies that don't rise to the challenge can become a "victim of their own success" with once enthusiastic clients deserting them if the service levels drop.

Organisations which are hosting blogs, videos and wikis can quickly find that when they do hit a popularity spike their storage requirements can increase 15-20 per cent each week. "It can be scary when you run the numbers," said Elisha.

More traditional businesses which are experimenting in the Web 2.0 area are generally able to partition off part of their storage systems to separate enterprise data from consumer generated content and experiment. However Elisha acknowledged that "it's very difficult to provide a Web 2.0 service with a Web 1.0 business model".

Frankly, providing a Web 2.0 service with a Web 2.0 business model doesn't seem like a picnic either. IT, as always, lives in interesting times.

[sidebar]

Web 2.0 fosters healthy disrespect

By David L Margulius

I was talking with some CIOs recently about the impact of Web 2.0 on the enterprise. One of them made the intriguing comment that Web 2.0 -- with all its mashups, syndications, consumable services and instant gratification -- enables customers more easily to "show disrespect for long-established corporate business processes".

Her thesis was this: Web 2.0 technologies put more power and control in the hands of customers than ever. And once customers get a taste of sitting in the driver's seat, they may not look kindly on companies that keep trying to sell the same old thing. They'll want to dictate the terms on which they buy, regardless of how companies prefer to sell.

For example, customers may start to refuse your corporate "wrapper". "Just give me the feed", they may say, or "just sell me some individual cable channels; I don't want to buy your whole stinking bundle".

Further, customers may not permit you to dictate functionality any more. It's no coincidence Apple was able to use the iPhone to force AT&T to abdicate its usual control over content, UI, apps and branding.

Apple was acting as a proxy for consumers, who don't want AT&T playing gatekeeper. "Just sell me access to your network," the almighty consumer is saying to AT&T in this deal -- through their designated spokesman, Steve Jobs.

Another example: customers may force you come to them, rather than the other way around. "Just put it on YouTube," the customer is saying to video producers. "I don't want to go to your Web site ... just let me do it on Second Life because I've been spending a lot of time there," and so on.

That's b-to-c. But how will this play out for b-to-b customers? Mostly they'll insist on a lower price or better service, as Web 2.0 and its cousin SaaS (software as a service) increase access to real-time price discovery and flexible sourcing.

Across the board, Web 2.0 will accelerate disrespectful customer attitudes and their consequences. How should corporate America and IT organisations respond to this new reality? My recommendation: If you can't fight 'em, join 'em. Throw open the floodgates and deliver your value to the marketplace in as many ways as possible.

Let customers "mash up" with you and by doing so, give you the brutal, honest feedback about which aspects of your products and services they really value and which they don't. Embrace their disrespect so that you can morph into something they do respect.

There are costs and risks here, of course -- to your brand, security, operational efficiency, and focus. Perhaps the biggest risk is that by unbundling products and services, corporations may lose control over the "customer experience".

But get over it. The customer wants to be in control. If you don't let them, one of your competitors will.