CEO at Econsultancy
09 February 2006 12:22pm
[Note: if you're new to 'Web 2.0' then read Tim O'Reilly's 'What is Web 2.0' article]
Despite my reservations about the hype surrounding Web 2.0 I thought I really ought to find out a bit more, so yesterday I went to Carson Workshops's 1 day event, The Future of Web Apps.
There was a great speaker line up with all the big names in Web 2.0 - Flickr, Delicious, 37 Signals, DropSend, Mint, Google Maps.
They'd also managed to fill 800 seats - almostly exclusively with blokes blogging on laptops as far as I could see.
There's certainly some "cool stuff" going on but I was going to see if I could start to understand the business / marketing / commercial implications of "Web 2.0".
I still don't quite have the answer - the companies talking Web 2.0 at the moment have been built from the ground up as such. I'm after "before and after" case studies where applying Web 2.0 thinking and technologies has demonstrated commercial gain - know of any?
Here are a few thoughts on Web 2.0 from a commercial point of view...
1. Can it save you money?
Yes, it probably can. If you can (re)use applications, data and services that already exist then that should save you time and money. Pick 'n mix and create your own web platform/service.
BUT... the barriers to entry, and costs, are lowered for everyone, not just you. So that means more competition, less competitive advantage. And, do you really want to risk your business based upon a collection of web services where you quite possibly have no SLA, no contract, no guarantee that they'll be around next week?
2. Can it make you money?
Yes. For new businesses / start ups there appear to be 3 broad options:
1. Build a huge user base and get bought by Yahoo! (Flickr style...)
2. Build a niche service / application that solves a particular problem and use the web's reach to sell it at a comparatively low price (Basecamp style...)
3. Build a great API and licence it to other businesses (Mint style...)
But what about established companies and brands?
Yes-ish? The argument is that an improved user experience or service will increase conversion rates, customer retention etc.
BUT... things like AJAX and other Web 2.0 technologies really aren't that easy to do and to get to work across all browsers and devices. By all accounts, it's actually pretty damn hard. Which means time-consuming and expensive I guess? The whole issues of Accessibility was also neatly side-stepped - I think WEB 2.0 can be accessible, but it's really not easy.
3. Can it help your online marketing?
Yes, in as much as you can distribute, feed, mash and generally push and pull content, applications and services all around the web. Most the companies speaking emphasis the fact that they have spend nothing on marketing and that it has all come about through viral awareness and being embedded in and around the web, with a resulting 'network effect' doing all the marketing work for them.
BUT... are those days already almost over? How many feeds can one man eat in a day? Even the founder of del.icio.us admitted that RSS used to be a big deal a couple of years ago and now "I'm not so sure...". And there's us thinking that RSS was supposed to herald the death of e-mail?
>> What about the "social software / collaborative / sharing" benefits of Web 2.0? Surely they will help you market your products or services "better, faster, cheaper"?
BUT... benefiting from the network effect requires critical mass. A lot of it. If you can be like eBay and absolutely dominate your space then you're sorted, no doubt. If not, you risk just fading away as an 'also ran'.
>> What about the Web 2.0 notion of 'Clean URLs' - URLs that are absolute and permanent identifiers, which are semantically meaningful to the user rather than exposing the technology underneatch. i.e using a URL like http://www.e-consultancy.com/jobs/ rather than something like http://www.e-consultancy.com/content_id?=123&session_id=blahblahblah
BUT... I thought this was old news? We did that years ago (URL rewriting) only then it was about search engine optimisation - and still is for many.
So, here's what I'm after - 'before and after' case study example of where established sites / companies have used Web 2.0 technologies and thinking and can show commercial benefit as a result. Or rather, ones who are actually happy to talk about it / share the results...
Know of any?
-- at --
09 February 2006 18:03pm
Investment leading technology or technology leading investment?
Web 2.0 seems to be the second one does it not?
I think there is a case for this technology. But the point I believe is that there is much much lower hanging fruit to be picked for most e-commerce organisations ,who in many cases, have yet to sensibly get their heads around or optimise their existing ecommerce revenue channels.
i am yet to see a web 2.0 business case that might produce a ROI comparable to that which you can derive from the more 'traditional' or conventional forms of online marketing (Email, PPC, SEO, content optimisation etc).
It seems to be that a bunch of nerds have come up with some clever/sexier ways to do things and because the economy/market is so 'bullish' at the moment, people are just wanting to spend money on 'something'
Web 2.0 seems like a good outlet for all that money. Reminds me a bit of the late 90's
I would however be interested to see what happens with smarter web to VOIP integration from the likes of the Telcos, Skypes and Google-talks of this world.
Can we make the web a verbal (voice) community as much as a text/HTML community?
I wonder what this forum would be like if i could use a VOIP client to leave my verbal comments instead of having to type all this??
Would i pay extra for that privilege to eConsultancy? Probably not. Would i pay extra to Mr Skype. Maybe
All this new fangled technology!!? - Maybe im getting old
Founder and Editor in Chief at Internet Retailing
10 February 2006 00:19am
Nice post. You focus though upon the front-end and consumer-visible aspects of W2 - the 'behind the scenes' and mindset requirements are of equal import, imho.
While I don't pretend to understand W2, the boxes it ticks for me though are:
There are of course risks and challenges. Leaving aside the impact this has on the culture of traditional organisations (there are more of these than generally admitted when it comes to this level of agility) W2 has at its heart some requirements which are not stable:
This is a long way of saying that looking for "W2 companies" is a bit of a red herring: look, rather, for how this mindset is permeating all companies and becoming a more modern way of doing business.
10 February 2006 09:43am
Some very good points there. I certainly think it is a refreshing and exciting way of thinking.
One question which *keeps* coming up from existing large organisations we talk to is around the whole "project management, process, cross-team working" challenge - typically the e-commerce or web team is frustrated by the silo / waterfall / risk management approach that they encounter elsewhere in their organisation. This whole Web 2.0 approach is a mental step forward even for web people, but I can see it being somewhat of a challenge for "IT" or the "FD" to get their heads around...
One area where the W2 (let's see if we can't popularise your shortened version of Web 2.0...) approach could be really interesting, and which you allude to, is using data sets in smart, creative, and cost effective ways *internally* or within controlled environments. I'm thinking things like customer data sets, product data, or B2B data relationships. This is much more 'behind the scenes' and risk can be mitigated but could still open up some interesting and valuable new applications and services.
Multichannel Strategy Director at Specialist Holidays Group - TUI Travel
10 February 2006 12:31pm
We've had a brief look at using AJAX type interactivity.
While the user experience benefits were potentially there (qualitatively speaking), the bigger (negative) impact was infrastructure.
All those XML server requests add up!
Retired at Retired
10 February 2006 14:50pm
Whatever W2 is (W2 > W3 ? odd) I don't think it is about project management. During the dot com bubble there was a lot of talk about breaking the mould on project management and producing systems in fractions of the time of traditional IT projects. Actually all that was happening was the people were not designing or testing properly and produced a bunch of broken systems.
Project management can be about committees and endless delay, or it can be about getting the job done on time and budget. Achieving targets and budgets on a large project is hard work. But it is what professional project managers do and you neglect these disciplines at your peril.
CTO at Library House
14 February 2006 02:52am
From my point of view, web 2.0 is a 'mashup' (forgive yet another buzzword). It a collection of things:
Successful web 2.0 companies do something very valuable - they turn every single user into a conduit - both for the services they use and for themselves - empowering them with tools to share/contact/write etc.
Probably the best article I have read on web 2.0 is here
In tems of business case - Extracting meaning or value from web 2.0 really depends on where your coming from.
If you are a technologist(like me) - there are one set of elements to look at. If you are an entrepreneur, there are pots of investment capital available if your idea is good enough. Every organisation should look carefully - you can draw benefits/learn lessons from where others make mistakes.
In terms of technology, there are plenty of benefits in using some web 2.0 techniques. AJAX is 'mutton dressed as lamb' in some ways - its been used for years, but its gone through something of a revival - popularised by the likes of del.icio.us/flickr etc and been metaphorically re-born as 'cutting-edge'.
(some companies would kill for this level of successful re-branding!)
AJAX was coined here
If its used properly, AJAX can reduce load on servers, decrease the bandwidth/traffic to sites and provide richer interactivity (used in moderation) having a positive effect of infrustructure. Oh and you don't really have to use XML by the way, thats the 'AX' bit.
Unfortunately, if you don't know what you're doing, it can cause more issues than it solves - breaking accessibility/usability, errors in browsers, top-heavy server load.
From a business perspective, I already know of companies picking the best bits from web 2.0 - even big corporates using external packages/APIs/wikis/CRM and its having profound effects in some cases.
Sceptics might offer that it will all end in tears in a few years - maybe so, but businesses that make wise decisions and take advantage of whats on offer will be further up the curve than those that don't.
There's a pretty good Web 2.0 guide + books, technologies, blogs here:http://www.programmableweb.com/reference
Hope this is of some help.
14 February 2006 17:50pm
Hm - two areas here: cross-team PM and what can be done in the 'pure online' domain using W2.
In the first instance there's no escaping the fact that cross-silo working is necessary. Other disciplines have been through this - just so long ago that people have forgotten. In retail no-one thinks twice that you don't put in a catalogue something that you can't stock, or can't warehouse, or don't know how to price. The processes for "request stock info" already exists. It's effectively transparent. When someone asks for that same information "for the web" then you get a collective panic - like startling the gazelle!
Some of this is because there may be new attributes, descriptions or parameters required, but more fundamentally there's a shock of having to look anew at a feed. Anything put in place more than 5 years ago is likely to be a single, coded feed or application - no 'service oriented architectures' or messaging systems here.
Rather than getting stuck in a silo debate, the true position is a "request for information": what things are "knowable" about product? How should I ask for it? What's a well-formatted and usable response? How frequently may I ask, if I'm 'playing nice'? etc. Standard questions in new system design, but the organisation may lack experience at holding this debate between functional specialists.
While there are many organisational and behavioural approaches to soothing this stage of development, the bottom line is that it's not optional: organisations must be internally coherent and have a flexible flow of information in order to make the most of their retail opportunities.
The second point is about the presentation and manipulation of this information web-side, using W2 techniques.
While these techniques are smart and engaging for the user they stand on the shoulders of the data available to the web systems. If you don't have a feed of or access to stock levels there's no point having a "fake-it" widget on the front end.
I see therefore that the W2 approaches build upon an increased, coherent view of underlying data, information and transactional flags/messages. W2 allows a sensible and relevant interaction with the many, many "bits of stuff" that exist behind the scenes, making the necessary and most appropriate "bits" available to the user.
Chief Analytics Officer at Kwantic Oy
14 February 2006 21:21pm
I may be way off the mark here but I think Web 2.0 is simply a media invention to describe how technology is being used differently to how it was a few years ago.
Blogs are deemed Web 2.0. That always makes me scratch my head. Blogs are simply a combination of a simple database, server side code (like PHP or ASP) with the ability to parse RSS feeds. All of this has been around since before 2000.
There's nothing new about Web 2.0 technology.
Its just companies like Google come along and make a very cool application like the Google Map system using AJAX and suddenly every man and his dog jump on the bandwagon and start playing with it, saying they're the latest Web 2.0 developers.
In my humble opinion there are some good applications of this so called new technology. As with all technology if you use it to solve a problem (like Google did) and it works, then it's possible that business models will follow.
AJAX for instance does seem a possible answer to the problem mobile web has.
I'm not brave enough to say it is "the answer", I just believe it might be one possible solution.
Basically the big problem with Mobile is the size of the consumer audience. To make it viable as a business a lot of operator/OS/browser compatibilities have to be overcome. There are currently 2 platforms used JM2E and XHTML to develop mobile apps and sites. With JM2E particularly in order to reach the consumer you need to port the development to many different operator networks, phones, OS/platforms, resolutions etc etc. It means developing a lot of code for a lot of apps for a lot of different systems and OS's. It means a lot of expense.
AJAX could potentially solve this problem. If a browser based platform was developed with AJAX it could potentially be used on any type of phone. So potentially a critical mass of people could download the same platform in AJAX meaning app developers have a standard to reach a wide audience. If enough people started to use AJAX then the network operator doesn't matter any more building apps for the OS become much easier and the audience much easier to reach, therefore the business model is better.
Of course there are a lot of ifs and buts there. But it potentially could be a "Web 2.0" application that could help the Mobile industry.
My view is simple with Web 2.0. If it solves a real business problem then it is viable. If it doesn't then it isn't.
15 February 2006 08:30am
This is such an important point.
We got very excited about Ajax and scanned our existing web systems to see if you could sell our clients extra development based on Ajax. However in practice there was very little. Read none.
Your post highlighted the reason, which I never really thought through before. If the data you are working with is up to 24 hours old, then why bother retrieving it in real time, you might as well do what we already do which is republish nightly and include things like stock levels embeded on the page.
But try and get a real-time feed from a legacy system which was developed pre-internet, so maybe not so secure, but OK because it is protected by a corporate firewall. Our real-time feed will likely send the security office into hypervnetilation.
Even if anyone was still around who would know how to produce it.
The technology is there - web services and Ajax put together open up fantastic possibilities, but the web side is probably the smallest part of the project.
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