Who's Afraid Of Web 2.0?

CIOs are -- and they should be, according to a leading IBM researcher. IT needs to get off its cost-containment hobby horse and start mashing up-- or end users will do it for them. Rod Smith, an IBM Fellow and VP, emerging Internet technologies, for the computer and services company, told a crowd of several hundred technologists and business managers in the mutual funds industry that Web 2.0 technology represents the next wave of business development. Smith made that observation as part of his keynote speech at the NICSA Technology Summit in Las Vegas on Wednesday. NICSA is a nonprofit services organization for the mutual fund industry.

Smith said he first heard the need for Web 2.0 capabilities articulated when talking with customers about SOA and Web services. "What we heard was that, while my systems are getting easier to integrate, I need something to connect people," Smith said. "And it had to be something quick, not something that would take IT a long time to do."

Smith referred to Web 2.0 technology -- wikis, blogs, social networks, and, in particular, application mashups -- as mostly "incremental technology," relatively cheap and easy to use. The cost of customization in Web 2.0 has come down dramatically, Smith said. Standardization helps, "and we're seeing standardization in terms of syndication feeds," he said.

Web 2.0 technology works well with the "long tail" theory of market development -- that business opportunities are moving from dozens of markets with millions of people to millions of markets with dozens of people. One of the keys to Web 2.0 is being able to act on emergent business opportunities quickly, Smith said. Chief among those are partnerships. Smith used as an example what eBay and Amazon.com have done to create "ecosystems" of developers around their Internet platforms. Amazon in particular "turned its whole business inside-out," Smith said. "By giving up control, [Jeff] Bezos [CEO of Amazon] allowed customers to customize user experiences for very small audiences," which then used Amazon as the back end for that business.

Partnerships cause integration work, Smith said. But the time frame for that work is collapsing rapidly. Customers have told him that in the current business environment, 20% of relationships last less than six months, and that that "drives IT crazy because it takes IT six months to get started on a project."

That's where mashups come in. Smith used the term "remixability" several times: "If you look at where enterprises are going, it's about creating apps with remixability," he said. He called it "a measurement for agile enterprises" and the way to take advantage of "not-planned-for opportunities."

Smith compared mashup technology and its impact on corporate computing with the Excel spreadsheet, which empowered users to create their own applications and data stores. "IT didn't like it very much, and they still don't like it," he said. But it's about an "emerging self-service business pattern" that empowers users to imagine and create their own opportunities and partnerships. Users need to think like this: "It's my content to be shared when I think its ready -- not the IT folks'," Smith said. And he exhorted the audience: "You know how to make [that content] valuable to customers, not the IT guys."

When they contemplate the dramatic potential for Web 2.0 technology, "CIOs say, 'This is exciting -- and I'm really scared to death,' " Smith said. Then he added, "and they should be."