Sunday, August 26, 2007

Towards a Web 2.0 Infrastructure for the Network Era Business Models

There has been a lot of excitement about web 2.0--mostly in the consumer space but it is also gaining traction in corporations. Andrew McAfee at Harvard Business School has spearheaded the excitement around Enterprise 2.0 and has a useful framework to think about it in an article published in the Spring 2006 issue of the Sloan Management Review. I particularly like Andy's definition of Enterprise 2.0 as:
Enterprise 2.0 is the use of emergent social software platforms within companies, or between companies and their partners or customers.
The reason I like the definition is that it allows the scope of the platforms to extend beyond a single enterprise to include a network of partners and relationships that are central for creation and delivery of products and services demanded by the customers.
So, what's the state of art in our understanding of how the web 2.0 infrastructure shapes and supports the emergent business models of the network era? Well, we have a good set of leading-edge case studies. These studies serve as a good foundation to understand how companies are experimenting with web 2.0. There are the initial case studies as Dresdner Kleinwort Wasserstein where JP Rangaswami was a keen proponent of blogs and wikis as critical building tools for the next generation infrastructure. (JP now is at BT and has a thoughtful blog here.). There are also attempts by many other companies to embrace the principles of web 2.0. I had previously blogged about BBC 2.0; there is some news recently about what SAP Imagineering Unit creating tools by adopting the web 2.0 philosophy of embracing the user community as part of design and development. I am not surprised that software companies like SAP are developing tools to create the web 2.0 infrastructure. I like to see what evidence we have of user companies embracing web 2.0 and creating a business infrastructure that is in sync with Andy's definition.
Then I saw this CIO Insight Survey about the State of Use of Web 2.0 by CIOs. A caveat here: I am not a big fan of such surveys of managers in general because personal use of applications rarely captures how enterprises uses tools such as video, blogs, wikis, mashups, podcasts, social networking tools etc. For instance. the #1 application is the use of video over the web (no big deal there as I am sure many CIOs are at least casual visitors of YouTube or Google Video or videos embedded in WSJ and Ny Times). The real question is what is the degree of reliance and use of videos for internal and external collaboration on critical projects that deliver superior value to customers.
I think time is ripe to carry out a systematic study of how web 2.0 tools and applications are reshaping the business infrastructure in different vertical industries. Such a study should also see how companies may be deploying these applications across organizational boundaries so that we can discern the opportunities and challenges.
We are still in the early stages of web 2.0 infrastructure but the business potential seems promising. I am bullish not on any specific web 2.0 start-up but on how enterprises to embrace the new tools and applications to usher in a new era of business strategy and practices that truly reflect a network era.

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