Web 2.0 business models affecting enterprise systems design

The ease with which consumers routinely network and share content over the Internet-and the emergence of new companies enabling them-are forcing business and government executives to rethink development plans for their own enterprise systems.

"If the Web 2.0 is in its infancy, then Enterprise 2.0 is a total newborn," Andrew McAfee, associate professor of Harvard Business School, said at a conference attended by more than 400 Washington area business, technology and government executives last week in McLean, Va. "We're using Enterprise 2.0 as short hand for blogs and wikis behind the firewall. But that's entirely too limiting," said McAfee. "We have not yet seen all the neat things that will go on inside enterprises."

What Web 2.0 actually embodies, and its implications for enterprise systems managers, is still open to debate.

For government IT executives like Aneesh Chopra, Virginia's secretary of technology, it means moving beyond publishing information online and instead integrating a variety of services that meet community needs. Chopra, who kicked off the conference put on by regional networking publication ExecutiveBiz, pointed to the distinct needs of war veterans returning home to Virginia. While Virginia is recognized as one of the most advanced among states using the Internet to provide public services, many of those services, he said, still require people to go to individual commonwealth Web sites.

"If you need help, looking for health care information, you go to (Virginia's) health care pages and click." But veterans are also looking for help with jobs and social needs, and must search separate sites for that information. "That's Web 1.0. Imagine having a sense of community for them. That can happen with Web 2.0," he said.

For Jobster founder and CEO Jason Goldberg, "Web 1.0 was all about getting things online. Web 2.0 is going the next step and making it work," with sites, he said, that are "created by the people, for the people every day." The Seattle-based firm works with a number of Fortune 500 companies, as well as the State Department, using relationship management software to tap into blogs and online communities as an alternative to job boards to recruit specialized talent.

Founded in 2004, Jobster is one of a growing number of new Internet businesses capitalizing on user-generated content, according to Michael Arrington, a former corporate attorney with famed Silicon Valley law firm Wilson Sonsini, and the founder of TechCrunch, which monitors new Internet products and companies.

Arrington outlined a variety of differences that distinguish Web 2.0 companies, including Digg, Facebook, Photobucket, Zillow, PickPal and YouTube, from earlier Internet pioneers. The newer breed of companies tend to rely on the Web as the operating system, rather than act as walled gardens; facilitate work from anywhere, not just from the office; rely on Java script, Ajax and Flash tools to load and move information on pages, rather than applications requiring constant refreshes; and require less start-up investment than the multi-million-dollar launches of the past.

In particular, Arrington noted the value that sites like PicksPal can create. The site allows users to participate in sports fantasy networks. But tracking software identified a small group of unusually successful players, which has spawned prediction tools that could have applications in other markets.

What this all means for enterprise system managers is still not clear, but Harvard's McAfee said that the days when the technologists could "impose technology standards, inflicting structure on, and inside an organization" as they have over the past 10 years may be waning.

"Web 2.0 is really the acceleration of transformation," he said. "It's not that users got smarter or more social. It's that technologists figured out what consumers wanted."

Their new approaches offer three lessons to enterprise managers, he said. First, the systems that provide supply chain and other enterprise information need to work "hard to put people in touch with each other." Second, "the technologists should get out of the way--to impose as little structure as possible." And third, "the outcome doesn't have to be chaos. It can be more like an ant colony."

"When I think about Enterprise 2.0, for the first time, all three constituencies ' the managers, technologists, and users ' will get together," McAfee said.

About the Author

Wyatt Kash served as chief editor of GCN (October 2004 to August 2010) and also of Defense Systems (January 2009 to August 2010). He currently serves as Content Director and Editor at Large of 1105 Media.

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