Software // Information Management
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6/21/2007
08:21 AM
Neil Raden
Neil Raden
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Whatever You Call It, Web 2.0 Is Driving Enterprise Software

Web 2.0 is driving the way companies are doing business. For proof, look no further than the fact that VC money has virtually dried up for enterprise software. The only true innovation going on now is at the edge of the Consumer Web... Web 2.0 is only partly about blogs and collaboration... There's also the Long Tail - the economics of narrow niches.

I hope that the debate between Davenport and McAfee about Enterprise 2.0 was more enlightening than the excerpt I read, because I'm left with the impression that neither one of them gets it, and I'm pretty sure that isn't true. Web 2.0 is driving the way companies are doing business. For proof, look no further than the fact that VC money has virtually dried up for enterprise software over the past five years. The only true innovation going on now is at the edge of the Consumer Web.Web 2.0 is only partly about blogs and collaboration. First of all, they completely overlooked the Long Tail, the economics of narrow niches. Making money in the long tail is impossible without the economy of the Web 2.0. Look at Netflix' business model to understand how this works. They make most of their money on films that are NOT recent releases and blockbusters. Other characteristics that have tremendous impact on the way organizations work include the Web as the platform, rapid application development and integration, the data as the "Intel Inside" - getting leverage with a hard to recreate set of data. There is the "perpetual beta," a world where there are no discernable software upgrades and features and functions are continuously annealed in the cauldron of the Web. Trusting users as co-developers, harnessing collective intelligence - all of these are Web 2.0 features and it should be pretty clear how these are important to commercial organizations, either as competitive advantages or the tools of onslaughts from competitors. The real visionaries aren't even talking about Web 2.0, they are focusing on Web 3.0, the true Semantic Web, where the Web becomes almost senscient with intelligent agents, reasoning and machine learning. But how long will it be before that is a reality? The answer to that question, especially to an old codger like me, is "too long." I think it's reasonable to assume that within 20 years, all of human knowledge will be on the Web, and will be accessible through its semantic, not syntactic content. But what do we do with a 20-year planning horizon? Other than going to college, picking a mate and taking care of our teeth, there isn't much we do that considers such a long-term perspective. The 2.0 tag has been used to death, and anyone scoffing at "Enterprise 2.0" has a valid point. However, Web 2.0 is the future of enterprise computing because it accomplished one thing above all else. Before, all software development happened in the twin poles of IT departments and ISV's. Web 2.0 has shattered that hegemony. Good software now comes from everywhere, which tends to break down the status quo. Enterprise software will never be the same.

Neil Raden is the founder of Hired Brains, providers of consulting, research and analysis in Business Intelligence, Performance Management, real-time analytics and information/semantic integration. Neil is co-author of the just-released book "Smart Enough Systems," with business rules expert James Taylor.Web 2.0 is driving the way companies are doing business. For proof, look no further than the fact that VC money has virtually dried up for enterprise software. The only true innovation going on now is at the edge of the Consumer Web... Web 2.0 is only partly about blogs and collaboration... There's also the Long Tail - the economics of narrow niches.

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