Author Archive
by Bill Ives
June 22, 2009 at 2:27 pm · Filed under
FASTforward'09
I attended the Mike Gotta session on Enterprise Social Networking at the Boston Enterprise 2.0 conference. I have been following Mike’s Collaborative Thinking blog for some time as I was pleased to be able to see him in person for the first time to hear him talk about adoption issues. Mike said he is going to provide information from actual cases from project teams that he has interviewed. I am doing these notes real time so please forgive any typos and missing words.
There is a history of software and communities. Many tools have come and gone since the 80s. So what is new? The consumer Web tools helped to great more awareness. Now we have evolved from social networking sites to services to platforms. They are no set answers yet. Platforms for the enterprise can use profiles, social graphs, relationship controls (for people and admin), social presence, participation tools, and application services.
He showed an example of a social network site from Booz Allen that they built themselves. It showed the total social context of an individual within the organization.
Mike offered a graph of the market space. The domain specific vendors include: Jive, Telligent, Newsgator and others. The three platform vendors include IBM, Microsoft, and Oracle. He also showed transformational vendors (Facebook, Twitter, Google and others) and emerging vendors (Drupal, Cubetree and others). He moved to another slide before I could get the rest.
Mike related a field study he conducted. Interviewed 21 organizations, interviewed 65 people, got 45 hours of conversation, and looked at 1,700 data points. Rather than guide the conversation with a lot of questions, he set a framework and let people talk and tell their stories. Good idea.
Mike made a good point up front. It is all about adoption not deployment. Major findings include the fact that everyone thought they were behind, even if they were not. Everyone is at the starting point. Few organizations have made a organization-wide decision on social networking. They are still trying to figure it out. Even organizations that have a strategic vision are in the proof-of concept stage. It is not about the tools that is the critical factors. It is overcoming the cultural issues. Social networks do enable more adaptive organizations. This make intuitive sense so it is nice to see some validation.
They found three approaches – people to people, people to work, and people to organization but its work best when these three integrate. They found two main gaps. People have not focused on social network and identity and search was not considered. This was surprising to Mike. He feels that their should be a lot of synergy between social networking and search strategy.
One of the first issues that project teams faced was properly identifying what social networking means for the enterprise. There is a lot of confusion here. Analogies to the consumer web such as Facebook were often not successful, as people did not want Facebook in the enterprise. Most teams ended up with the term collaboration and not anything social. This is exactly consistent with Dion Hinchcliffe in the morning session. I certainly agree with both of them
Found innovation best from bottom up from people closest to the work. So give them a voice and a way to collaborate. I found this over and over again in the old knowledge management days. In those days you needed to do anthropology on the jobs to uncover best practices.
Mike he found other issues such as the above and that these are not new issues. What did I just say? Shifting generations play several roles in adoption. Need to be able to appeal to all generations and allow for greater integration across generations. Older workers can be social networking leaders to share their expertise and provide status to them for retention. Also look for emerging experience that is developing in the younger workers. A culture of participation will identify good skills in ways that might not come out otherwise.
Social networks are also ways for people to organize and create their own training to meet their individual needs. Informal learning can complement formal learning. Also, social networking is great for on-boarding. They offer the back channel for what is really going on and who to interact with.
The business side often has pain points but do not link them to a business requirement when they talk with IT. They also sometimes come to IT with a tool request not linked with a business requirement. In both cases IT needs to not dismiss but explore to uncover real business requirement. It is usually there if you ask questions.
There was a lot of debate on ROI. It was hard to make very concrete. There is no agreement here. Some people said it was the wrong question and others said it was important. It is essential infrastructure or can it be an intervention with a concrete ROI linked to work process improvement. Often ROI was found after deployment but hard to predict specifics. Most pilots did find business value once they started.
Some project teams worked behind the scenes to get supporters in decision roles, often younger people. Others went out to get support form the field. Stories can be the best ROI, especially for potential of approach to get pilots going. Gaining approval and ROI is more art than science. I would agree here. This is bringing back early days of knowledge management when it was all fresh. Again, I think this similarity just validates the issues.
Mike next addressed the issue of how to balance business and culture or how to defeat the enemy within. Organizational structures cam impede social networking. Middle management can be threatened and try to sabotage efforts. They were used to controlling what went up the reporting chain. Now the lower level employees can talk directly to senior management. The top and bottom of the organization liked this but the middle did not. Managers would tell workers to not put stuff in a blog but send to them in email.
Sometimes there are social caste systems. People at high levels do not talk with people in junior levels. This can carry over to social software. Workers feel senior management would “never take an idea from me.” This is a red flag that the culture can be a barrier. Another company that had a good culture and questions and suggestions were answered quickly. They made over $500k in savings from the system.
There is no clear answer as to whether you must change culture first before implementing social networks or you can use social networks to change culture. Regardless you must address the cultural issues in the implementation. Culture can trump almost everything. Trust is important here. One guy said he did not want to fill out his profile because it would make it easier to find him and lay him off. How do you cross culture boundaries in social software that are not crossed in person on the job? This needs to be figured out.
There was mixed opinion on whether to bring legal, HR, and security into the project pre or post pilot. There was agreement that they need to get involved. Pre-pilot course would say that you know what to avoid. Post would say that you do not yet know what you need to get by-in for.
Other issues that came up include the role of social business activity in annual reviews. There were all sides on this. Do not want to drive gaming the system but you also want to recognize good corporate citizen behavior. Also, what about consequences for negative behavior? Should people be concerned about career limiting moments? There needs to be policies on this so issues are clear. Some companies have terms of service before you start to use the social networking site. I think this could be okay but only if what really happens. I had something similar on an email system with a past employer but everyone ignored it. It said you cold only use it for business uses but everyone used it for personal uses. Finally, the company recognized the folly of their requirement and removed it. If you get too controlling no one will come.
I had to duck out a bit early so welcome anyone filling in what I missed. I liked the fact that this session came from actual research with real stories and was not simply platitudes. It was also better as stories than stats.
by Bill Ives
June 22, 2009 at 10:55 am · Filed under
FASTforward'09
This is part two of Dion Hinchcliffe’s workshop on implementing enterprise 2.0 at the Boston enterprise 2.0 conference. Dion brought up a guest speaker David Stephenson who he said is the “world’s leader in democratizing data.” This was the tile of his discussion, the concept of democratizing data: the data-centric organization. This makes it automatically available to those who need it based on roles and responsibilities while maximizing security. He said that data democratization can actually increase security. I agree here.
Having data at the heart of all actions is an attitudinal shift. You need to provide metadata so you can make sense of it and RSS feeds to reach user. You need to think of every worker as a knowledge worker. Giving more authority to people who fill potholes by providing them with all the data on their daily assignments increases morale and productivity as they will know the best way to complete the tasks. David said that the Netherlands government saves over 25% of reporting costs by standardizing and making data more transparent.
Dion came back and picked up on this theme. Government is picking up on the data democratization theme with the new administration. For example, wikis are being used for dealing with crisis issues for more transparency than email.
Dion reviewed enterprise 2.0 platforms; wikis, blogs, microblogging, mashups, online communities, social bookmarking, social networking and them went over the vendor space with examples of each category. There is currently no one stop shop for all tool categories but there are suites. Online communities include: Joomla, Drupal, Zikula, PHP/Nuke SharePoint, Lithium, Telligent, DotNetNuke, KickApps, Jive. Dion said these are the top ones based on usage. SharePoint is already available in many organizations that want to start enterprise 2.0. It has many necessary capabilities. It can also be adapted to implement many of the social emergent tools but usually requires some work.
Dion put up an enterprise 2.0 ecosystem chart. You have traditional enterprise systems and enterprise 2.0 systems. These can be connected through mashups and data can be found through federated search. He went on to cover some other platforms being used: Igloo, Facebook private groups (it is open source). Serena software uses Facebook (see my post - Serena has Adopted Facebook as their Intranet).
Mashups are being used and Serena, Jackbe, IBM (Lotus Mashups), Microsoft (Popfly) have tools. One creative example, Chicago did a mashup of crime data with Google Maps that is updated real time and can be sorted by time of day.
Crowdsourcing is another application. One gold company put their survey data out and invited anyone to tell them where the gold was. They had great success and paid a large sum in bounties. This can be done internally or externally. (see Innovating Through Market Games with Spigit.)
Dion then switched to best practices. Successful adoption strategies include: gain and enlist top down support, overcome turf issues in advance, align applications to key business processes, align enterprise 2.0 strategy to business strategy, develop a clear simple business case, provide strong leadership, design measure aligned to business processes. I could not agree more. These were also all the key adoption strategies for knowledge management in the early 90s. This does not take away from them. I think it just reinforces them. Dion said these factors came from actual case studies.
He added more adoption strategies: listen to users, simply the access and production of knowledge, develop a clear communication plan to promote the effort, involve all key stakeholers (but go slow on this), integrate all forms of communication, develop a clear motivation plan. Again these are all best practices from knowledge management in the early 90 but I see this as a further validation. I found that legal often got overlooked and this can come back to bite you so do not leave them out.
Dion went on to discuss the need to aggregate social data and not have silos. This is critical. Enterprise 2.0 suites are adding this. Also, social analytics is being implemented to take advantage of the transparency and make sense of it. He gave an example of Facebooks’ FriendWheel as a consumer version. In line with this you need to cultivate weak ties, as well as strong ties, and enterprise 2.0 enables this. These weak ties are often the source of new insights vs. the people you talk to all the time.
Reputation systems are another way to make use of the social data and rather input. Sezwho is one tool that works across platforms. Expertise location is an overlapping capability.
Dion offered a breakdown of effort: tools, 15%, integration, 25%, community management 25%, IT support, 15% change management 20%. These make intuitive sense. Do not short change the people issues. The quality of the community management team is a critical success factor. Community Manager is one of the roles in the enterprise.
You need to allow time for people to learn the tools and methods. Social tools are the new productivity tools like word processing and spreadsheets before so everyone needs to learn how to use them. As Dion said earlier, the more people use the tools the greater the value. There are three levels of community in the enterprise and you need to deal with each one: team level, community level, and entire network.
I found this workshop to be a useful overview of enterprise 2.0 adoption issues.
by Bill Ives
June 22, 2009 at 9:01 am · Filed under
FASTforward'09
Dion Hinchcliffe is leading an opening workshop on Implementing Enterprise 2.0 at the Boston Enterprise 2.0 conference. I have long been an admirer of his work and was pleased to see this session. The subtitle is: Exploring the Tools and Techniques of Emergent Change. Dion said the concept of emergent and social is critical. I like the fact that many stories will be offered as I agree that they offer more than “factual” information. I am doing this real time so apologies for any typos.
Dion said that many companies do not like the word, social. so he uses enterprise 2.0. Again, I agree here. I wish the Wikipedia did. Three years ago only a few in his session had access to blogs at work. Last year it was half. This year it was almost everyone. Enterprise 2.0 is more about social tools for collaboration than in the consumer space. Most organization have these tools but it is every uneven.
Consumer and enterprise is blurring. Employees now put contact information in social tools outside the enterprise as something they own and can take with them. People are willing to pay for these tools themselves but most are free. We had to move to a much bigger room as there were a lot of people here. I could have predicted that. I look around and still see people standing.
In 2004 Web 2.0 tools began to be used at work. This is when I learned about them and got excited about their impact on knowledge management. Middle of last year global surveys in developed nations found about a third of all companies had the enterprise tools. Now it is a bit over half. Dion mentioned that knowledge management was an early use. Now Twitter is on the rise. It is social messaging as opposed to instant messaging. There is little interest in IM now as it does not build value because it operates in silos. I never liked IM and would sometimes copy and paste IM messages in Word before they went away. Now Twitter needs to get its archiving working better but at least there is some.
There are hundreds of enterprise 2.0 pilot projects underway. Mid to small businesses are most successful because they are nimble. Big software players are getting into it. Google Wave is designed to serve in this space. There are dozens of startups. Traditional tools like Documentum are adding enterprise 2.0 features. I did a review of this in AppGap (see EMC Documentum Makes a Series of Moves into Enterprise 2.0).
The big money principle of Enterprise 2.0 is harnessing collective intelligence. Tools have been poor for this before. He has seen 400 page Word docs with best practices. Tim O’Reilly definition, “Network applications that explicitly leverage network effects.” This is the social side of information. It is not just making connections but making use of it. Network effect occurs when the more people who use it, the better it is. YouTube is an example. Gave example of enterprise use of taking a free wiki tool inside informally at AOL. It spread virally until the entire organization uses it instead of traditional document management system. The wiki was optimizes for network effect. The traditional document management system was not optimized for this and lost out.
Andy McAffee put forth three pillars of enterprise 2.0: emergent, freeform, social. They are primarily to address collaboration challenge. Capture institutional knowledge and make it discoverable. It is globally visible, persistent collaboration that has very low barrier to entry. Like open source, anyone can improve knowledge. Workers are put into the central place for contribution. Tools adapt to environment rather than the reverse. In studies of early adopters social tools get much greater use for knowledge management than traditional tools. There is also less duplication of effort, increased transparency, and higher levels of productivity.
Dion used stales acronym – search, links, authorship, tags, extensions, signals - as critical components. Tags provide emergent structure and standard use of terms. I found that the users of taxonomy are the best at creating it. Now we have the way for this to happen. These tools will interrupt workflow less. Dion said this is a critical point and I agree. The other is that the content can be leveraged as the content is persistent and discoverable. I see this as knowledge management as a byproduct of work and not a separate activity. This is what got me excited about Web 2.0 for business in 2004. Knowledge work is the fasting growing jobs and part of jobs. Enterprise 2.0 addresses this so their is great opportunity to provide software support where it has gone well before.
Now we have a break so I will post this first part. More later if the wifi holds.
by Bill Ives
June 17, 2009 at 10:11 pm · Filed under
FASTforward'09
I recently spoke with Eric Rogge of Exalead about how search is playing an expanded role for enterprises inside and outside the firewall. He mentioned that the major players such as Google, Microsoft, and Yahoo are continuing their battle for broad based Web search. Microsoft has now brought Bing into play in this market.
Exalead is not competing here but focusing instead on the other end of the market, operating in the long tail by enabling businesses to create purpose-built search-based applications. I have written about them before (see Exalead’s CloudView Offers Integrated Search Capabilities). CloudView is one way of attacking the question I raised in my post, We Need to Tear Down the Social Media Silos. Exalead is bringing search to new enterprise tasks and expanding its role through these search-based applications. See my post, Tweepz brings Exalead search to Twitter for an example of this. In our most recent conversation, Eric talked about other search tools they’ve built to find and refine all results from the ocean of Web content. These include audio, video, image-based, and even ranking tools.
For example, they and a systems integration partner built a search-based application for GEFCO, a French logistics company than manages the transportation and delivery of new cars from factory to dealer in Europe. They needed to be able to look at inventory and then keep track of delivery status. GEFCO tried to do this in the traditional manner with a SQL relational database but it was too complex. With a structured database you need to set up multiple data entry forms that require specific data types of data (e.g., car model, location, etc.). There needs to be many data entry forms to do the proper inquiry and car dealers and sales people get frustrated with these specific requirements.
Exalead was able to change the approach for GEFCO to a search based application where you typed in information in a single field as in Google and the search engine did natural language processing of the request without the requirements of a structured database. This greatly simplified the task and gave the car guys what they were used to on the Web. However, in this case you do not want thousands or millions of results as in Google but the single correct answer (e.g., where is the car? When will it arrive?). This application won an Europe award for IT innovation.
Eric said there are many applications, such as this tracking system, with very focused requirements. Another example is patient records in a healthcare system. Exalead also implemented a search-based application for the French postal system to track packages and people. They wanted to be able to answer such questions as where is the package or where is the postal worker? It integrated information from several databases to answer these questions through one interface.
He showed me several other examples. There was the Wikifier (see below), a use case example (wikifier.labs.exalead.com). It parses a web page and creates tags that aid in search. It will also recognize a topic and create a link to a relevant page such Wikipedia article or a search results page from Exalead’s web search tool (www.exalead.com/search). It is a connecting tool or information mashup. As you go through the page you can hover over content and see relevant background information. This same concept could be applied to an enterprise application that covers business topics.
In another example, Eric showed me a restaurant locator tool called ‘RestMiner’. Another use-case example, it mashes together a number of information sources to you get reviews from multiple review sites. A buzz score is calculated from data drawn from multiple sites. Here is another way to break down the information silos on the Web. Google Maps is also integrated to give you location information. Like the Wikifier, RestMiner was built as a proof of concept and could be applied to many business applications.
These examples shown some of the possibilities for search-based applications focused on very specific topics where you want more precise answers. Metrics such as the buzz meter can be build into the application to better aggregate and interpret the data. Many companies have data located in a variety of sources and formats. They do not have to rebuild these applications if a search-based application can work across them breaking down the silos. The Exalead concept of search-based applications has been well received. They had 80 percent growth from 2008 over 2007 and are on track to do it again in 2009. You can also read more about this topic on the Exalead blog.
by Bill Ives
June 12, 2009 at 11:31 am · Filed under
FASTforward'09
There has been a lot written about Google Wave. Miguel Helft provided a nice overview, Google Showcases New Communication and Collaboration Tool. David Coursey asked, is Google Wave a Twitter Killer? and Dion Hinchcliffe discussed, the enterprise implications of Google Wave. John Moore wrote about how Google Wave could be a great CRM for the small to mid size business market and I am sure many other applications built on top of Google Wave will follow.
Paula Thornton urged me to watch the long video demonstration (hour+) of Google Wave and we discussed where Wave might go. I finally had a chance to do this and wanted to share my notes and impressions. Paula looked at a draft of this post and gave me comments but I take responsibility for any remaining short comings.
Lars Rasmussen was the master of ceremonies and introduced Google Wave as a communication and collaboration tool. It is Open Source with robust APIs, and built leveraging the Google Web Toolkit (GWT). They introduced it at a developer’s conference to encourage others to build apps on top of Wave. I would agree here. I think that Wave has great potential but its potential will be best realized through focused applications that sit on top of its very open structure. Most people like more than a blank slate, even a very robust one that does things not done before. More on this later.
Lars said that email was invented 40 years ago, before the Web. They wanted to create email as if it was a new thing today with the Web in mind. I can see this in what they did. As Lars said, email was created to work like “old school” mail. You send mail and you receive mail and you send more mail back. With Google Wave you work in the same space and just keep editing the same content if you want or interjecting comments anywhere in the content. It is much more collaborative and conversational — it takes greater advantage of what the Web can do.
You can also drag and drop stuff such as pictures from your desktop anywhere into the conversation that is happening in a Wave. Things are no longer sequential. However, if you want to see the sequence of how the conversation got built you can use the Playback feature to get a “movie” of the construction of the conversation.
This is transformative, similar to the transition from typewriters to word processing changed writing except more so. With Wave you see the new content emerging as it is typed simultaneously on all computer screens that are tuned into the Wave. There is no sending back and forth, it just ‘is’. There is no ‘there’ — just a global ‘here’. There is no linear transactional and temporal exchange between individuals, it’s all ‘now’. They even showed four people editing the same document at the same time. This might get chaotic. You can set privacy levels so you decide which people see the new content emerging.
Lars discussed ways to organize Waves. I think this will be important. In my view that was a flaw in del.icio.us and is a potential issue with Twitter, What do you do as you start to create massive amounts of content? That was a problem for me with del.icio.us and is starting to be an issue with Twitter. I use Twitter to record interesting links for future exploration but after a few weeks it may be hard to find them. Wave does provide tagging and you can embed a search field. However, the better feature is the way you can embed Waves within Waves by drag and drop. This allows you to create tables of contents and indexes in a “master” Wave that links to the details within each Wave.
Lars and his colleagues next covered the extensions offered with Wave to enable development of applications by others outside Google, as well as inside. They gave examples of applications that they built using these extensions. One I liked was a smart spell checker that looked at the context of the word. For example icland is an icland was transformed to Iceland is an island. Another automatically put in links.
You can also make extensions that integrate with other tools such as Twitter. You can write tweets in Wave and they appear in Twitter or vice versa. Of course, other Twitter related apps also do this. They showed how Wave could be integrated with an issue tracker. You can take comments from Wave and load them into the issue tracker.
I think this integration and the development of more focused capabilities that sit on top of Wave will be key to its success. As I mentioned earlier, I think that the completely open Wave will get some use as a novelty and even as a collaboration platform. However, it is too open ended for many work applications, as people will not want to recreate the functionality and features. It can potentially serve as a meeting point for applications. On the other hand, people might want to shape application themselves and not be forced to follow the structure of existing applications.
Since Wave may serve as a useful meeting place for applications, it may not replace many but become a useful platform. Paula pointed out t me that Dion Hitchcliffe wrote a preamble to this in 2006, Blogs, wikis, and Web 2.0 as the next application platform. I talked with a number of venders who said they were first afraid that Sharepoint would be a heavy competitor. However, they discovered it opened more doors than it closed. Sharepoint is getting more companies involved with collaboration and these venders can integrate with it to bring in their specialized functionality to a bigger audience. I think a similar thing many happen if Google Wave takes off. It certainly has expanded the playing field and should be a positive thing for enterprise 2.0. Like many tools, I do not think it will live up to its wildest supporters or act in the market the way its hardest critics propose.
by Bill Ives
June 10, 2009 at 8:00 am · Filed under
FASTforward'09
Social networking predates people. It is not a new idea but it is getting increased focus in business and our personal lives because of the capabilities that the Web provides. However, on the business side the emphasis on technology can provide obstacles to adoption. I recently spoke with Anne Berkowitch, CEO at SelectMinds, a provider of corporate social networking solutions about her experiences in creating and hosting online social networks for large brands such as IBM, Dow Chemical and Deloitte.
SelectMinds has provided social networking platforms for employees to support innovation and engagement, and for former employees to enhance recruiting and business development. It began in 2000 as a recruiting solution through networking with company alumni before the current advances in social networking technology. This has given the company an opportunity to grow up with the field and experience what works and what fails.
Anne said that when a social network is deployed internally separate from the workflow, it does not tend to drive productivity, as employees do not engage. There needs to be a compelling reason apart from the technology to make it work. It cannot be implemented as a utility without a specific value proposition tied to work processes. I am in strong agreement here as it correlates with my own experiences with knowledge management.
The same issue applies for alumni networks, as there needs to be a strong alumni culture as a backdrop to an online network. Often the two are developed simultaneously. The organization must view employee relationships as “lifelong” relationships – ones that don’t end the day an employee leaves to pursue other opportunities. The online network needs to be seen as a benefit by former employees. The technology alone cannot create this culture; it can only support and better enable the culture. There needs to be a sense of trust between former employees and the enterprise if the enterprise is to become the sponsor and benefit from the interaction. This issue should be addressed before the technology is brought out.
Anne said that she has seen some exceptions to the workflow recently with the economic downturn. Two of her clients have created social networks across their enterprise to serve as broad “water coolers’ to foster greater employee engagement to help weather difficult times. However, once again we see a strong need that is supported by the technology and not the technology creating the need.
Companies who are interested in implementing the new social networking solutions need to start by identifying a business problem. This premise is almost as old as people but it so often ignored that we need to keep raising it. Every time there is a new hot technology, it can step on its own toes if we are not careful.
We also discussed the possibility of a Chief Social Networking Officer emerging. Anne said that while she had not yet seen this role in a formal sense someone at the C level should become the sponsor of any significant networking efforts and some one just below this level, outside of IT, should be assigned to manage it full time. Again, this correlates with my knowledge management experience.
Anne’s experience is appreciated. I will be speaking with her again to learn more about the specifics of SelectMinds and will provide this conversation in a subsequent AppGap post.
by Bill Ives
June 8, 2009 at 11:01 am · Filed under
FASTforward'09
There was an interesting post by David Chartier, The Future of Social Media: The Walls Come Crumbling Down. He focuses primarily on the consumer Web and writes, “But for the social web to evolve into its final stage and take flight, the walls that separate these services, their users and everything they create will have to come down.”
David then goes on to quote Leo Laporte, a broadcaster who runs the TWiT network. Leo calls the phenomenon “the social silo,” and he does not feel it can last much longer. “People are pouring all this content and value into individual sites,” says Laporte, “but they aren’t going to want to keep dealing with Facebook, and Twitter, and FriendFeed, and whatever is next.” I could not agree more.
David then offers Google Wave as one possible solution. He writes that any user-generated content placed into a Wave-based system will be accessible by anyone that has been granted permission. The philosophies of openness and accessibility are baked right in to the tool. If Wave becomes pervasive, then the web of the future might only a need single log-in.
I will take his word on this until I can take the time to finish viewing the hour plus video on Google Wave highly recommended by Paula Thornton.
The same thing is happening inside the enterprise with many tools. Some search tools, like iQuest, can go across most, if not all, enterprise content and data systems. Many others, like SelectMinds, are providing integration between selected tools. These are both good initial steps and others are taking them. However, we need to tear down the application walls inside the enterprise, not simply build better ways to cross over them. This will require industry cooperation. I hope this can happen or enterprise 2.0 will have trouble realizing the full vision of transparency and collaboration.
by Bill Ives
June 2, 2009 at 1:01 pm · Filed under
FASTforward'09
This post started with a conversation with Paula Thornton. We were discussing the implications of the cloud for business processes and software and I will cover this in another post. Here, I first want to address the business model issue that will either carry forward or compromise this innovation.
Most SaaS providers I talk with are doing very well in the down economy. Some are having record profits. For example, Jen Grant at Box.net said that as a SaaS provider they continue to exceed their revenue targets. She attributed this to pressure on IT departments and business units to keep expenses down. With Box and many other SaaS tools, it is easy to get started and there are no implementation or systems integration costs. Employees still need to do work. Box and other SaaS tools provide a lower cost way to accomplish many content related tasks.
While Spigit, the innovation management software firm, offers both cloud and on-premise solutions, 95% of their customers are choosing SaaS. GroupSwim has gone to a total cloud offering so they can scale quickly, another major benefit of the cloud and making servers virtual. QuickBase has also seen significant growth for its SaaS based shareable database despite a down market. They feel that companies are seeing this class of applications as a way to both cut costs and increase productivity. Traction Software, the SaaS based teaming platform, continues to beat its revenue goals. (correction, Traction is actually not SaaS as Paula notes below, but they are doing quite well and have a great product.)
SaaS is an important component of the move to Enterprise 2.0. The analysts seem to agree with the software providers I have talked with. IDC recently issued the report, Software as a Service Market Will Expand Rather than Contract Despite the Economic Crisis. They projected that by the end of 2009, 76% of U.S. organizations will use at least one SaaS-delivered application for business use. SaaS applications are also getting an increasing percentage of IT budgets.
So where will this all go? According to the Wikipedia, electricity was once generated on premise but through a series of technology innovations, the grid and remote sourcing of power became possible. It took a while to get the business models sorted out and FDR won his first election, in part, on the promise to clean up the corrupt electric utilities of the day.
I am not suggesting there is anything like that corruption going on now with the cloud. However, as use of the cloud grows the final business model does remain to be determined. Will it become a utility in the business sense, as well as the practical sense? Will it need regulation?
The players continue to grow. For example, Amazon went from selling books online to also becoming a major cloud service provider. However, it and several of the other major cloud players have not signed the Open Cloud Manifesto. I am not taking sides on this issue, just noting that there is an issue.
The National Institute of Standards and Technology, a non-regulatory arm of the US Commerce Department, has helped by developing a draft definition for federal use of cloud computing. They are ahead of the private sector here. Let’s hope that those who stand to benefit from the cloud can come to agreement that allows the cloud to reach its potential and helps the users, as well as our economy.
It will take a while for the final business model to evolve as the cloud moves data and content storage toward becoming a utility in a practical sense. Let’s hope we do a better job that we did with electricity.
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