Digital Marketplace Data and Enterprise Search

March 30, 2007 at 6:10 pm · Filed under Enterprise 2.0, Sponsored Post

(co-written with Rob Carney)

At the Future of Media workshop at FASTforward ’07 Sue Feldman of IDC previewed some research findings that have enormous implications for the way we think about search. Her report has now been released by IDC as “Who Owns the Web?”

What she and the IDC research team find, counter to popular intuition, is that the vast majority – perhaps 70% – of all queries on the Web are NOT taking place on the major search engines. They are instead “Enterprise Search” queries on individual sites.

A few excerpts from IDC’s report “Who Owns the Web?” by Susan Feldman and Rachel Happe follow to give the gist of the argument. Then we add some thoughts about how this connects to what goes on inside the firewall.

“Popular wisdom tells us that the battle for Web hegemony is won. The big search engines — and in particular Google — have the online ad market all sewn up. But new research at IDC may put an end to this belief. IDC has spent the last year mapping the structure of the digital economy and turning it into an interactive market simulation tool. We seeded it with publicly available data on the number of queries, clicks and ad revenue. But we also gathered data on the number of hours that users spend searching on the Web, and on their online purchasing behavior for both business and personal use.

When we turned our model on, we found a large hole: unaccounted for queries, perhaps seven to ten times the number that were commonly reported in the press. Those query numbers are not just an academic concern: every query represents an opportunity to generate ad revenue. While our results are only preliminary, we now believe that roughly 70% of queries on the Web are not going first to search engines to be referred through results clicks to Web sites. Instead, users are going directly to the Web sites, the destinations, on the Web, and are bypassing search engines entirely. This behavior makes sense: once you know that you can buy books from Amazon or Barnes and Noble, why would you return to Google or Yahoo to purchase a book. Purchasing managers at businesses know which office supply vendors they buy from and bookmark Staples, for instance….

Media companies–newspapers, online content providers, yellow pages publishers–have a golden opportunity to retrieve control of their markets. Publishers already know their audience. They understand their customers – the demographics, trends, and local interests. They already have a dedicated sales force that know their market. If they can seize this new ad revenue stream, improve the ad targeting by using their customer knowledge to increase the relevance of the ads, they can attract more advertisers to their online content sites.”

Of course these dynamics in the digital marketplace that Feldman and Happe are reporting on have a direct parallel inside the firewall. Namely, every enterprise has no excuse not to know its users and know them well. And the more the search on the digital property (portal, collaboration environment, etc.) knows about the customer or consumer or employee, the more detailed and relevant the content on the site and the delivery of that content can be. Enterprises should think about whether they can take 70% of internal queries and channel them to sites where internal users really want to go, and provision those users with content that is really useful to solving the issue of the moment.

Has your enterprise started to think of its population of “associates” as shoppers for quality information yet? Do you think your associates know where to find the amazon of customer information or the staples of the supply chain for your business?

As Feldman says, “every query is an opportunity” – the value can be measured by ad revenue on the consumer web, but also by the quality of the answers to someone’s problem inside the company.

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FAST

Web 2.0 – The Dark Side

March 29, 2007 at 1:52 pm · Filed under Barriers, Enterprise 2.0, Guest Commentary

Let me start this entry by stating that I am one of the biggest advocates of Enterprise 2.0. I have written numerous opinion pieces on the powers of the Internet and the capabilities of tools such as SNA, KM, search etc. Nonetheless, I have to say that as I sat through many of the presentations at Fast Forward and read many of the entries in this blog I cannot help but feel that many are drinking the Kool Aid.

What am I speaking about? Well, many of the presentations and blog entries speak of Web 2.0 as unprecedented capability that will revolutionize business forever. I cannot help but recall how “web 1.0″ was touted as doing this (does anyone remember vortals?), along with numerous other revolutions – e-mail, EDI, groupware, KM, to name but a few – and I do mean just a few.

The powers of online collaboration, new approaches to search and content intelligence are powerful. But their powers are evolutionary, not revolutionary. Furthermore, they do not change most of the basic tenets of human psychology and business management (in this regard I side with Tom Davenport – see Experts Agree to Disagree). It is naive to think that Web 2.0 will take off all on its own, as so many other blog entries and Fast Forward presenters would have us believe. Indeed, this very blog site has a leader, orchestrated contributors, and a policy statement . Their role is not heavy handed, but it is there nonetheless. Any community needs an individual responsible for activity, ethics and relevancy. To allow truly free collaboration is negligent (I am speaking here of corporate blogs, not those blogs that are nothing more than the inane ramblings of “anyone”. Corporations need only look at e-mail and the degree to which it has complicated legal discovery to begin to understand the impact that blogs can have. I have worked with many regulated industries (e.g. pharmaceutical, defense), that share an implied culture of “watch what you write – not what you say.” The spoken word (not recorded) cannot come back to haunt you. But the written word, whether on paper or a blog, can. Business blogs need to be monitored. Rules need to be imposed. When I suggested this at an working luncheon at Fast Forward, someone challenged me stating “you do not trust your own employees.” How naive. Breaches in security, propriety and confidentiality come intentionally and accidentally. More importantly, we must ask ourselves, are corporate blogs records? Of course they are. Therefore they warrant the same scrutiny and management that any other potential corporate record does.

Perhaps this is why McAfee states “enterprises have to be convinced that the technologies are iron-clad secure and scalable.”

Secondly, and equally as important, corporations that want to maximize the return on Web 2.0 technologies need to control their introduction and availability, lest the “ugly portal in need of a taxonomy beast” raises its ugly head again. Consider this blog site. An individual new to the community may never fully appreciate the depth of knowledge that has been captured here. Navigation is limited to groupings by month and author. Contextual search is a feature that is difficult to “discover”. The power of the search tool is limited. It does not provide half of the functionality that was touted at Fast Forward. Web 2.0 technologies need to be orchestrated as part of an overall Information architecture, on an ongoing basis. As the needs and focus of the community change, so too should the blog site.

Analysts and technology providers that promise the powers of Web 2.0 without simtultaneously exposing the “dark side” – the need to align to corporate culture, to monitor and manage, to design and tactically deploy, do the market a great disservice.

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Creating Successful Niche Content Spaces on the Web: Lessons for Enterprise 2.0

March 28, 2007 at 12:23 pm · Filed under Enterprise 2.0

CNN offered an interesting article, Why commercial Wikis don’t work: Crowdsourcing has been a giant hit for the Web 2.0 set — so why won’t it work for bigger, more mainstream enterprises? It covers some successes and failures in group content creation. The main point can be summed up in this excerpt.

“…Web 2.0 sites like Wikipedia and Flickr organize people into literally millions of accessible walled gardens. Each one allows you to take part in tending the growth of that tiny space — that encyclopedia entry, that Flickr “tag. By tirelessly nurturing their specific communities, not by randomly “crowdsourcing,” Wales, Butterfield, Fake and their ilk encourage responsible gardening. Wiki novels, Wiki op-eds, a Wiki Amazon: these are concepts too large, too uncontrolled, too wilderness-like – too unwalled – to be gardens. Either nothing grows at all there, or the good ideas get strangled by weeds.”

So foster very focused content creation and stay away from trying to do too broad and ill defined a topic like writing a group novel on the web. Success can come on a focused site or on a site that promotes and support multiple niche content areas like the Wikipedia. The article gives a nice niche example, the Lostpedia, “a Wikipedia-like site created by fans of the ABC series Lost who are all trying to figure out what the heck is going on, and sharing their notes.”

This also applies within the Enterprise. One example of success is the Intelpedia operating inside the Intel firewall to collect definitions of key work related concepts. Here you get many people focused on specific subsets of content. There have been over 9,000 entries. This is much better than a broad wiki for simply discussing company issues.

There is also the Intelipedia for the US intelligence community. The “top secret” Intelipedia system, currently available to the 16 agencies that make up the U.S. intelligence community, has grown to more than 28,000 pages and 3,600 registered users since its introduction on April 17 (2006)” Both of these applications follow the successful approach of the wikipedia, allowing for niche content creation that is maintained by dedicated users.

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How Much Can Enterprise 2.0 Transform? Experts Agree to Disagree

March 27, 2007 at 8:52 pm · Filed under Barriers, Enterprise 2.0

Two of information technology’s greatest thinkers — Harvard’s Andrew McAfee and Babson’s Tom Davenport, have agreed to disagree over the scale of the impact of Enterprise 2.0.

Davenport, author of Competing on Analytics and a vocal proponent of the power of IT to transform business, doesn’t think E2.0 will rise to the occasion. He just published an article in Harvard Business Review questioning the value of Enterprise 2.0 to business. He even considers E2.0 to be the “next small thing,” rather than “the next big thing,” as Andrew McAfee believes (and as we proclaim with such persistence at this blogsite.)

Davenport questions whether E2.0 technologies and services “will empower employees, decentralize decisions, free up knowledge, and generally make for better places to work,” as McAfee and many of us here at this blogsite believe.
Davenport explains his skepticism:

“Such a utopian vision can hardly be achieved through new technology alone. The absence of participative technologies in the past is not the only reason that organizations and expertise are hierarchical. Enterprise 2.0 software and the Internet won’t make organizational hierarchy and politics go away. They won’t make the ideas of the front-line worker in corporations as influential as those of the CEO.”

McAfee responded that he “couldn’t agree more” with Davenport, arguing that he, too, argues against the “techno-determinism and -utopianism that I’ve sensed in some E2.0 enthusiasts.” Rather, McAfee predicts “spotty deployment of E2.0 technologies, not broad or deep adoption. My pessimism comes from exactly the factors that Tom describes.”

McAfee, however, admits he is far more optimistic about E2.0, putting it this way:

“My optimism, and my interest in the component technologies of E2.0, comes not (solely) from my inherent geekiness, but from the fact that these technologies really are something new under the sun. They’re not extensions or enhancements to previous generations of corporate tools for collaboration and knowledge management; instead, they’re radical departures from them.”

He also agreed that E2.0 in and of itself won’t “turn our existing hierarchical, political, and busy companies into egalitarian gestalts of knowledge creation and continuous bottom-up innovation.” However, what E2.0 will do, McAfee believes, is open more doors, giving “managers who want more lateralism, egalitarianism, crowdsourcing, idea percolation, self-organization, collective intelligence, etc. a new and unprecedented opportunity to obtain them.”

McAfee also observes that many managers truly want to break down the hierarchies that hold their organizations back, and that market forces will ultimately make E2.0 attractive to many businesses. “If Enterprise 2.0 technologies and mindsets do in fact help some companies get ahead by creating and disseminating more knowledge, innovating more, reacting faster, etc. then interest will grow, and so might new approaches.”

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Swimming with Your Peers

March 26, 2007 at 3:23 pm · Filed under Enterprise 2.0

Forrester recently conducted a survey that addresses issues important for Web 2.0 startups and Enterprise 2.0. The survey was reported by Captain Obvious and ZDNet’s Web Technology. Forrester asked 100 CIOs (Chief Information Officers) employed by companies with at least 500 IT staff if they would turn to start ups for Web 2.0 technology. Most said no. I assume that most of these people are risk adverse and do not want to bet on small companies for critical IT needs. They would rather look to what the big and mid-size software firms with track records are providing so their vendors will likely be around for a while. This should be no surprise to anyone in the enterprise software business.

When I was responsible for a portion of the KM practice at a large consulting firm, I had many small companies approach me about a possible alliance. While we did software alliances, I knew that most of our partners would not be very interested in taking these firms to their clients. The alliance structure was biased in favor of large to mid-sized vendors that would generate a lot of revenue for the firm. Risk was also not a valued option. They want to see a strong user base and not be the lead adopters. This position made sense given the context and, to be helpful, I did not offer much encouragement to these small firms no matter how great their products seemed. I did not want them to waste their limited resources on something that had little chance of success.

So what is a small company to do if they do not have selling to a large firm as an exit strategy? Or even if they have this goal, how do they develop an initial enterprise user base to attract this investment? Well, they had better find alliances with these large firms. But even here how do they get the initial user base to attract alliance partners?

There is another option, at least to get started and develop a user base, even within the enterprise. The study found one exception. Captain Obvious wrote, “If companies are maintaining strictly direct relations with the end user, and business-to-business arrangements aren’t made or kept to side-dish status, none of the above (negative responses) applies.”

Many Web 2.0 firms are selling to individual users. And many of these products are coming into the enterprise through happy individual users. So perhaps the enterprise sales strategy, at least in the short term, is to focus on developing a satisfied base of individual users who will take your products into the enterprise. This is currently how a lot of Web 2.0 stuff is getting inside the enterprise. Look to getting key web influencers on your side. Reach out to the individual user market. Do not invest your limited resources in high price enterprise software sales people. At least, I have rarely seen this work.

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