Web 2.0 may have emerged from a slow-gathering wave of hype, but it describes a range of business models, ideas, methodologies and computing platforms that represent a sea change in the business world - partly driven by the ways consumers like to communicate and consume.
This is the second article in our series on next-generation enterprise IT, produced in association with IBM. There is also an accompanying podcast on Web 2.0 at work.
The Facebook generation
Social networking site Facebook is not just about personal profiles: 130,000 businesses make either formal or informal use of it as a networking tool. Most major brands are there, from Virgin to the BBC's use of the service to distribute Radio 5 to fans, via multinationals and public libraries. Corporations such as Disney use it to foster communities, encourage fan sites, and create the means to opt in to marketing. In fact, never mind Facebook, it is a sign of real change when that old economy stalwart, the BBC - steeped to its polished brogues in the Reithian public service concept of broadcast, entertain and educate - is behind one of the most successful Web 2.0 projects, iPlayer.
So, Facebook and its generation are here to stay, yes? "The challenge is that we have to bring people along the whole path first bring people along to Facebook, and make them comfortable with sharing information online," says Facebook founder and CEO Mark Zuckerberg. "We got people through this really big hurdle of wanting to put up their full name, picture, even their mobile phone number in many cases. Growth is a strategic thing for us. We are not as focused on optimising revenue. People have suggested we are not thinking about it, but that is wrong. We have thousands of advertisers coming to the site and reaching people."
Facebook has B2B interests, though, confirmed in its alliance with Salesforce.com, a relationshp which makes Facebook an "enterprise-friendly platform" for global enterprises and individual entrepreneurs, according to Salesforce.com. "This is the premier social graph fully integrating with the premier enterprise cloud computing company," says Salesforce.com CEO Marc Benioff. Sheryl Sandberg, Facebook COO, adds, "Facebook's users are always eager to try new applications that can improve their ability to connect and share in a trusted environment... our work will give developers the tools to create and deliver a new class of business applications for Facebook's 120 million active users."
But is Web 2.0 and social computing really enterprise ready? Is it really something the CIO needs to worry about today, especially with the economic meltdown slashing the IT budget? For many analysts, the jury is still out. While IT departments may be acquiring Web 2.0 technologies, utilities such as blogs, wikis, and RSS (really simple syndication feeds) are often left unused, even within the IT community. For example, 64% of IT providers have no plans to invest in wikis this year, while 8% admit they are not even familiar with the technology, according to a Forrester survey of over 700 IT decision-makers within US enterprises.
Social networking in business
In reality, the mistake the nay-sayers make is in thinking of such apparently consumer-orientated entities as Facebook, LinkedIn or even YouTube - where many organisations have their own channels - as websites that people "waste time" on. In fact, all of these services are already powerful computing platforms with their own APIs - development toolkits through which millions of people organise themselves into groups, and create new content, applications and behaviours.
In fact, the use of social networking tools as part of everyday business has led to an increase in efficiency, according to an independent market report released by AT&T, whose pan-European survey of more than 2,500 people in five countries found that of those employees using social networking tools in the workplace, 65% say that it has made them and/or their colleagues more efficient. In addition, 46% say it has sparked ideas and creativity for them personally.
The top five social networking tools being used by organisations across Europe are: companies' own collaboration sites on intranets (39%) internal forums within the company (20%) company-produced video material shared on intranets (16%) online social networks, such as LinkedIn and Facebook (15%) and external collaboration sites on the web and internal blogging sites (both 11%).
Increasingly, users are mashing up technologies into bespoke services that scrape the Web for all that valuable chatter and content. People may be talking about your business, and what potential customers say and do ought to play some role in your strategic planning. Web 2.0 technologies are an opportunity to get closer to customers, conduct research and development, find out what people are saying about you, and track and model emerging behaviours and usage patterns.
Social networking sites have proved second to none in marshalling support for both "like" and "hate" campaigns about companies, councils, colleges and individuals. If companies can mash up those streams within their corporate portal, then that is a valuable tool to bring customers back into the fold.
The Web 2.0 economy is no longer about where information or service originates (i.e. who it belongs to) but how easily it can be consumed, personalised and shared by a target community, outside of the strictures of format, date, ownership and hierarchy. Every stream of information means defining a community, and then satisfying its demands with supplementary information and the opportunity for conversation. Social bookmarking services such as Delicious, Digg it, Reddit, Stumbleupon and MyStrands either aggregate feeds or allow users to leave a trail of recommendations for others to follow, use, annotate and expand.
Every consumer is someone's customer, and technologies that millions of people elect to use, and then organise themselves into communities around, cannot be a timewasting exercise it is surely the sign of a well-designed computing platform.
However, in an information economy, information is valued by the speed at which it moves, not by its exclusivity, and that remains a challenge to many enterprises. Information "chattering" (microblogging) site Twitter is built on this principle, bringing the share price ticker concept to bear on what individuals are doing every minute of the day.
But the "Twittering classes" are perceived by some as a threat as well as an opportunity. At a managerial and organisational level, social networks, SaaS and cloud computing give a voice to the many and potentially pose a threat to the few - those less than broadminded CIOs for whom the command and control of monumental enterprise systems and their usage runs in the blood.
It is understandable to a degree. The world has just seen its first case of "edultery" - a real-world divorce brought on by one partner's dalliance with someone else's avatar (a digital representation of themselves) in virtual world Second Life. If technology can redefine a real-world relationship to the point of divorce, then it is obviously disruptive. All business is built on relationships, and relationship-building and maintenance is what Web 2.0 is about.
So what is next? E-mail, auctions, portable documents and e-commerce were the killer apps of the first wave of internet usage social (and therefore business) interconnectivity has been in the vanguard of the current generational upgrade returning the web to its collaborative roots. The next "upgrade", Web 3.0 - locative media - promises to map real-world co-ordinates onto the grid, and enable users to move seamlessly between virtual and physical worlds based on location in the latter, with mobile platforms and location-based services replacing the deskbound PC. In short, technology has become integrated into everyone's lives to a degree that seemed impossible even a decade ago.
Role of the wiki
Wikis replace the concept of a web page with a wikipage, the location of a piece of ongoing, collaborative content-generation. Wikipedia and its associated family of sites are the most familiar names, but many companies use their own Wikis internally, among them Accenture, Airbus, Apple, the BBC, BMW, Boeing, Bosch, BT, CERN, Cisco, Deutsche Bank, Expedia, the FBI, Gartner, Lockheed Martin, Microsoft, Motorola, Nokia, Pixar, Siemens, Sony, Sun Microsystems, SAP, Volvo, Disney and Yahoo!.
Wikis favour collaborative work so they are a boon for software development e-learning project management knowledge management policy creation and dissemination brainstorming tech support resource management marketing and customer relationship management (CRM) and research and development (R&D) - all activities at the core of any business.
One company using wikis as the bedrock of a revenue-generating business is Jigsaw (www.jigsaw.com), which brings the concept of user-generated and moderated content into the competitive world of business contacts - the kind of information that directory providers find hard to police, clean and keep up to date, but which their customers rely on.
The company has 10.25 million personal records on file and counting, provided by 650,000 contributing members. "People trade information on Jigsaw. Our system is based on points. If people do not have data to give, they clean the records that are there. We use technology to complement our community. Every single record is complete. Usually, most such information [in other company's systems] is incomplete, dead, incorrect, duplicate, or in a non-standard format," says Jigsaw CEO Jim Fowler.
Case study: Second Life
Dominic Shine is CIO of Reed Exhibitions, the world's largest B2B conference organiser with 500 events annually across 35 sectors. The company makes extensive use of the web for brand extensions, he says.
"The heart of our business model is bringing buyers and sellers together in the physical world at specific times, but online communities can give you a year-round capability. They can extend the proposition of the physical community, facilitate commercial discussions and help peers to find each other. At present, we use Facebook in a limited way. We feel there is a need for something more tailored so you don't get social network fatigue. Facebook and LinkedIn are very successful at acquiring traffic, but neither offers a business model we can use," he says.
Reed Exhibitions has experimented with Second Life, building a virtual version of its Midem event and screening awards in a virtual press area. Shine admits it had limited traction within the target community, but says it was "a useful learning stage on a journey somewhere else. Virtual world immersion does not add much value. Sometimes you recreate some of the problems of the real world, but it is harder to find people!" The real boon of Web 2.0 is powerful search tools, he says.
The top five social networking tools
- companies' own collaboration sites on intranets (39%)
- internal forums within the company (20%)
- company-produced video material shared on intranets (16%)
- online social networks, such as LinkedIn and Facebook etc (15%),
- external collaboration sites on the web and internal blogging sites (both 11%)
For more on How to use Web 2.0 at work, listen to our podcast, produced in association with IBM.