… what’s surprising is that so many companies are still betting against the net, trying to solve today’s problems with yesterday’s solutions. The past few years have taught us that business models based on controlling consumers or content don’t work. Betting against the net is foolish because you’re betting against human ingenuity and creativity. …
In 2007 we’ll witness the increasing dominance of open internet standards. As web access via mobile phones grows, these standards will sweep aside the proprietary protocols promoted by individual companies striving for technical monopoly. Today’s desktop software will be overtaken by internet-based services that enable users to choose the document formats, search tools and editing capability that best suit their needs.
Driving this change is a profound technological shift in computer science. For the past 20 years a client-server computing architecture has dominated digital infrastructures. Expensive PCs ran complex software programs and relied primarily on proprietary protocols to connect to bigger—and even more expensive—mainframe servers. The data and the power lived in these computers and their operating systems.
Today we live in the clouds. We’re moving into the era of “cloud” computing, with information and applications hosted in the diffuse atmosphere of cyberspace rather than on specific processors and silicon racks. The network will truly be the computer. … Cloud computing is hardly perfect: internet-based services aren’t always reliable and there is often no way to use them offline. But the direction is clear. Simplicity is triumphing over complexity. Accessibility is beating exclusivity. Power is increasingly in the hands of the user.
… put simple, intuitive technology in the hands of users and they will create content and share it. The fastest-growing parts of the internet all involve direct human interaction. … online communities are thriving and growing. The internet is helping to satisfy our most fundamental human needs—our desire for knowledge, communication and a sense of belonging. …
We’re betting on the internet because we believe that there’s a bull market in imagination online.
When it comes to successful examples of Web 2.0 social networking services many people see Del.icio.us and Flickr as the primary candidates. Their stunning success influenced all sorts of business models for start-ups, that are being built around the idea of generating network effects through social software architecture to create both value for the user and revenues for the providing service. However some business plans might be at risk looking at their role models from a different perspective:
The one major idea behind the Del.icio.us Lesson is that personal value precedes network value. What this means is that if we are to build networks of value, then each person on the network needs to find value for themselves before they can contribute value to the network. In the case of Del.icio.us, people find value saving their personal bookmarks first and foremost. All other usage is secondary.
As people use Del.icio.us more, and in order to gain more personal value, they use tags to be able to find their bookmarks later. Tagging isn’t even the primary function of Del.icio.us. Most of the tagging done on Del.icio.us is done secondarily, and for personal use.
The social value of tags on Del.icio.us is only a happy side-effect. Even though most of the ink spilled about Del.icio.us is about the social value, it’s really not the reason why people use it.
Similar to Google aggregating links that were originally created for taking readers from one document to another, Del.icio.us can aggregate tags in order to find out how people value content. If 1,000 people save and tag the same bookmark, for example, that’s a good sign that they find value in it. But to think that people tag so that this information can be aggregated is to give people a trait of altruism they just don’t possess.
Joshua Porter is a keen observer of design and technology trends associated with the emergence of Web 2.0 and for those interested in these topics his writings are highly recommended.
"Globalization is changing the nature of competition and value creation in ways more subtle and fundamental than simply cost. By incubating scores of new business models that can unseat established companies, globalization is creating opportunities for new value creation and highly profitable growth at the two ends of the value chain––new customer connections at one end and new models of innovation at the other."
"Globalization makes strong business designs stronger, and weak business designs weaker. That’s true in part because new competitors from all corners of the globe are combining low cost and high technology to build market share very quickly."
In a world where customers have more and more choices from a vast array of increasingly commoditized products and services, highly personalized customer connections are a company's best opportunity for differentiation. Products and services might be commodities, but you never, ever want your customers to feel like they too are just commodities. A successful business will make each of its clients feel special by understanding and addressing their unique requirements.
This presents a seeming paradox: the more global and commoditized the economy, the more local and personal the customer relationship must become to ward off competition. This is not easy. It requires a deeper knowledge and more specific management of distinct customer types and segments, "a new game - call it the Cambrian explosion of new segments - with new rules" the article says. A business has to be very good at market segmentation and at serving those markets as efficiently as possible.
While multinational firms will have to learn again to "think local" for global competitive reasons it also gives great opportunities for flexible regional companies, that are really closer to their markets to find a sustainable niche for their products and services or to integrate into specialized innovation networks.
Wireless Pulse Points Offer an Inside Look at Local Communities
The Boston Globe is sponsoring a new initiative in Boston—WiFi Pulse Points. Pulse Points are wireless access sites that offer an inside look at locations around Boston. The sites focus on the local community, offering visitors interesting information about landmarks, people, and businesses that make up the immediate community.
The first two Pulse Points, which launched on September 27, are hosted by Barbara’s Booksellers in South Station and by the Trident Booksellers and Café on Upper Newbury Street, a local bookstore with a long-standing reputation as a wireless hotspot.
The Pulse Points are the brainchild of Globe technology editor DC Denison and WiFi innovator Michael Oh; they are designed to create interactive destinations in specific locations within the city.
"We created these sites as a way to share the stories that create a community," said Denison. "Every individual and location has a story to tell. As you pass through South Station or browse at the Trident, these sites offer an annotation to the location—an opportunity to learn a little more about the people and places that make up our community."
"To my knowledge, these Pulse Points are the first time a media company has used WiFi technology as a means of offering content, not simply as an access point," Denison continued.
The Pulse Points are accessible to anyone with a WiFi-enabled laptop. They allow individuals to connect to a network, but not to the Internet or e-mail. Rather, these Pulse Points connect individuals to their location—and each other. They create a "situational community" of people who are connected simply because they are in the same place at the same time.
Each site features information on the history, the people, local businesses, and landmarks that make up the pulse of an immediate community. The sites are designed to be interactive—visitors can explore the area, play games, and add their own content to the site through discussion forums. Content on the site is updated regularly.
"No one understands the events and news of Boston better than The Globe,” said Richard Gilman, publisher of The Boston Globe. “The new WiFi Pulse Points take that understanding one step further—capturing a moment in time, a spotlight on a location where you are spending a few minutes. The Pulse Points offer a glimpse into a very local community. Our sponsorship of this initiative is one more way we can continue to deliver the pulse of Boston to the people who live here—through a variety of different channels."
Especially in the UK the idea is gaining ground with the release of two studies, that underpin the importance of creativity and design innovation as a competitive advantage and critical success factor especially for small and medium enterprises.
Openness is at the heart of truly worldchanging systems. Transparency of process, connections and results make open systems more reliable, more accessible, and better able to be connected to other systems; it also encourages collaboration and the input of interested stakeholders. This is perhaps most tangible in the world of technology, particularly information and communication technology (ICT); open ICT systems are increasingly engines of innovation, and are clear catalysts for leapfrogging across the developing world, via reduced costs, potential for customization, and likely interoperability with both legacy and emerging technologies.
Harvard's Berkman Center for Internet and Society has just published something they call the "Roadmap for Open ICT Ecosystems" (PDF), a guidebook for policymakers, business strategists and technical specialists looking to implement open information and communication technologies around the world. The Roadmap doesn't focus on any single type of open ICT, but on the greater value of the open approach, and the ways in which open systems encourage collaboration and innovation using "a potent combination of connectivity, collaboration and transparency."
One aspect of the Roadmap that I find particularly compelling is that, although it speaks only to information and communication technology needs, the majority of the principles and ideas considered could apply more broadly -- to other kinds of technologies (such as biotech and nanotech), and even to political and social systems (such as voting methods and urban planning).
It's this broad approach that allows the concepts to apply to more than ICT. Consider, for example, the Roadmap's list of Guiding Principles of Open ICT Ecosystems:
An open ICT ecosystem should be:
Interoperable – allowing, through open standards, the exchange, reuse, interchangeability and interpretation of data across diverse architectures.
User-Centric – prioritizing services fulfilling user requirements over perceived hardware or software constraints.
Collaborative – permitting governments, industry, and other stakeholders to create, grow and reform communities of interested parties that can leverage strengths, solve common problems, innovate and build upon existing efforts.
Sustainable – maintaining balance and resiliency while addressing organizational, technical, financial and legal issues in a manner that allows an ecosystem to thrive and evolve.
Flexible – adapting seamlessly and quickly to new information, technologies, protocols and relationships while integrating them as warranted into market-making and government processes.
With a few slight adjustments to the phrasing, the same list would apply well as guidelines for a distributed energy network, or as guidelines for a transportation system, or even as guidelines for cooperative biomedical research. This isn't because the guidelines are vague or overly-broad, but because many infrastructure and service systems ultimately have similar needs for sustainable success.
That said, the Roadmap does give ample detail about the particular value of open information and communication technologies. Most useful, perhaps, is the section on how open ICT ecosystems can evolve. The Roadmap authors pointedly do not expect governments and organizations to shift to an open approach in one great leap; rather, the move to openness requires a great deal of rapid prototyping and incremental adjustments, to allow the particulars of the implementation to match the organization's context. That's the corollary to the low-level similarity of needs across disciplines: the specific circumstances of each case will be highly variable. The guidelines and the Roadmap don't tell you the answer, they help you find the answer.
This is one of those documents where the short length -- it's well under 50 pages -- belies the richness of the material. Open ICT systems have a definite value for development efforts, in terms of both leapfrogging and local/regional economic regeneration (it would be useful, for example, for the reconstruction of the Gulf Coast to keep the principles of open systems in mind). Even more useful, at least for me, is the degree to which the Roadmap triggers further consideration of how the open system concept applies outside of the realm of information and communication technology. The core principles of "connectivity, collaboration and transparency" have far broader application than just ICT; they are at the heart of a robust, flexible and sustainable model of society.
Web2.0 is about glocalization, it is about making global information available to local social contexts and giving people the flexibility to find, organize, share and create information in a locally meaningful fashion that is globally accessible.