Facebook or Internet - What is the real social networking platform?

It is my perhaps not so humble opinion that the internet will continue to evolve as the platform for social networking. The early successes and leading sites like Facebook that have gained traction have an opportunity to be part of the broader ecosystem but I disagree with the opinion of some of my peers that one particular company will dominate social networking. The desire to be the platform and the glory that comes with it seems to encourage every successful entrepreneur to declare his technology, website or tool to be the platform.

Lately, there is been a lot of discussion about Facebook and its platform ambitions in particular. Fellow Irregular, Dennis Howlett has a post on ZDNet today nicely summarizing some of the discussion.

What is a platform and how do I build one quickly?

I define a platform as a set of tools, technology or more broadly any layer that allows new products or services to be built with an order of magnitude less resources than was possible before the platform.

Excellent examples of platforms include railway network, power grid, internet, telephony network, etc. In the technology realm, platforms that have made an impact include mainframes, databases, operating systems, email, etc. For example - before the railway network, if you wanted to build a power plant or a factory, you had to lay down the tracks, buy rail engines and bogies, etc. and all the costs had to be borne by one single entity.

It takes a lot of time and effort to build a platform. Most importantly, all platforms start out as applications solving a particular business or technical problem - in other words, platforms evolve from applications. Computers started out as specialized calculators to perform census or scientific calculations and over several decades generalized to what we call computers. Similarly, road networks evolved over 100+ years as people built roads from point A to point B - till the 'network effects' kicked in and Eisenhower launched the famous Interstate project.

Do you remember the previous platforms? AOL??

Many online businesses have thought they can short circuit this process and become the platform. Remember, when AOL was the dominant internet (with its own domain name system or AOL Keywords) or Amazon was the platform for online shopping. A single business entity has advantages of speed and single minded-ness that it can leverage to provide a compelling solution rather than wait for the ecosystem to evolve but eventually the broader system catches up and overtakes the giants.

So what are the underlying issues Facebook is addressing. As quoted on the ZDNet blog, I think the following are the principles underlying a next generation social platform :

• People want online identities to establish trust-based professional and personal relationships. FaceBook provides this but I believe in the long run a third party validation system could provide you with a ‘universal’ identity (with multiple faces/avatars/usernames) to conduct business over the wider internet.
• People want control over who connects to them and when. FaceBook, email and GoogleGroups provide this in different ways.
• People want a publishing platform. Unlike email, this is information or opinion you want to share but don’t want to push in an email. Blogs, MySpace, FaceBook, Twitter, YouTube, etc all do this. Email and IM are not good at this.
• Plus all the basic goodies like document sharing, managing relationships (invites, forwarding), messaging, etc.

These are just some of the issues and there are several groups and companies dedicated to solving some of these challenges like Identity & Trust, Content Management & User Control, Publishing, Messaging, etc.

I believe Facebook shows us in a small way what would be possible if we solved some of these challenges. But if you think Facebook is the final answer, then you may end up feeling like people that bet on MySpace as the social networking platform or AOL as the internet. Not very smart.

What do you think about Facebook? Is Google the real platform? What about Cisco & WebEx? Or Microsoft?

Warren Buffett buys into Web2.0 conept with $60 Billion

Warren Buffett may not realize it or even know of web2.0 but he is tapping a core concept of Web2.0 i.e., user-generated content, to figure out how to invest hordes of cash that his company generates every year. Currently, his firm Berkshire Hathaway is sitting on $40 billion and he needs to find places to invest this money. In particular, he is looking to find one large company that he can acquire outright but he is doing it with one key difference. Rather than just talk to corporate bigwigs or hire Wall St. dealmakers, Warren is reaching out to the broader community of investors - in fact, any one that reads his annual letter to shareholders or even a newspaper.

Talking about how he is willing to spend even more than $40 billion by selling some other assets, Warren said today:

``I would hope something would come along where I would have to sell something that I like to buy something huge I like even better,'' Buffett, Berkshire's billionaire chairman, said yesterday at a press conference in Omaha, Nebraska. He would ``love'' to find a $40 billion acquisition and would ``figure out a way'' to come up with $60 billion for the right deal, he said in a later interview.

In fact, he even reached out to attendees from foreign countries at his annual shareholders summit.

``I must have told 30 of the South Africans alone to call me collect if they find anything that fits,'' he said in response to a question from a South African journalist. One of the suggestions makes a ``fair amount of sense,'' he said, calling all of them ``long shots.''

If this is not democratization of ideas and user-generated content- potentially worth billions to Warren - then I don't know what qualifies. And as with MySpace or YouTube, the person that comes up with the idea probably gets no more than some limelight - as opposed to billions that would have to be paid to a Wall St. firm that brings you a deal worth this size.

I know that suggesting names of companies is not same as the 'rich' analysis performed by the Wall St. firms but this is an interesting experiment.

What do you think? Should Bill Gates ask our opinion on Yahoo! next? After all, they are best friends.

Dear Workday, Citibank called!

Dear Workday, Citibank called. They want their logo back.





Dave Duffield's team launches Workday on Monday. Dave walked away with billions of dollars when Oracle acquired PeopleSoft. Since then, he and his team have been busy creating the 'next generation' of applications starting with HR (or HCM) using the On-demand model (Software-as-a-Service). Much will be written in coming days about Workday, so I will not review details of Workday and in stead point out the obvious about SaaS!

1. SaaS is here to stay: If you have been living under a rock, here is the news. SaaS will account for 25% of all new software revenue by 2011, according to Gartner.
2. Just do it: If you are looking to build a new software company, you don't have to solve a new business problem. Just re-implement any software (CRM, HR, Financials) using SOA to deliver it on-demand.
   
3. Build on SaaS: A lot of opportunities exist to build services that help customers use these SaaS applications- how do I integrate Salesforce with Workday? how do I get Oracle|Siebel On-demand contact data work with my Skype or Jajah applications? how do I consolidate and report across multiple applications without writing SQL queries because I can't? how do I provision and de-provision users?
   

Irrespective of individual successes or failures of Salesforce, Siebel On-Demand, Workday - 5 years from now, the game would have changed. This is no smaller a shift then that from Mainframes to Client-Server.

Banking in Brazil - BRIC2.0 or Web2.0

I have been receiving these podcast alerts from Gartner and one of them caught my eye-"What Banks should know about Web2.0". The podcast available here talks about how Web2.0 will inevitably impact the banking industry. The analyst talks about how money will change hands in MySpace, how banks are using podcasts and that RSS feeds can be used to disseminate information. I am sceptical about the MySpace, don't much care for podcasting or its supposed impact on banking but agree that podcasting and RSS are useful technologies. Although it is hard to understand how this is specific to banking vs. retail or healthcare. The analyst then refers to CircleLending, a peer-to-peer lending enablement startup. A very interesting startup amongst the ranks of Zopa and Prosper.

By nicholasb (Creative Commons License)

Meanwhile in Brazil, HSBC seems to be everywhere. On my latest business trip to Mexico and Brazil, I saw HSBC truly dominate the marketing landscape in the two countries. And they seem to be doing well in India too with over 50% growth in profits. Citibank is probably the only other bank that has had so much success in its global strategy and its claim to be "the world's local bank" rings true. So how does this relate to Web2.0- it does not and that is the point. In my view, the future of banking is not Web2.0 but Brazil, Russia, India and China. I would like to coin the term BRIC2.0 and propose that more opportunity and growth is to be found by following the advice of CK Prahlad than by doing a mashup of Bank of America site with LendingTree!

For example, customers of banks in India can check their balances and pay bills by using text messaging on their cell phones. And text messages in India cost lower than 1c per message. In fact, over the next few years as banks from India and other low-cost high-capability countries set up shop in the USA, they may end up giving the US banks a run for their money. If Infosys can run IT operations of large European or US banks at a lower cost, then their friends at HDFC Bank or ICICI Bank may one day be able to provide banking services that can compete with the large US banks. And that may be the logical conclusion of outsourcing. You only have to look at how the PC industry started with outsourcing manufacturing of minor parts, then chips and now Lenovo owns IBM to wonder if one day the same could happen in other industries from banking to healthcare.

BRIC2.0 is the next generation of developing economies that are the engines of growth for banks, automotive, steel, etc. Indeed, IBM is moving its global procurement offices to China from New York. A sign of times to come... forget Web2.0, focus on BRIC2.0!

Oracle OpenWorld is here to dominate San Francisco

Did I say dominate San Francisco? I meant Software!


Yes, Oracle is taking over San Francisco for the next week with its annual gala that has grown to over 40,000 attendees this year. I will be attending as a member of the Oracle Identity Management team- we have a signficant presence with demo booths and over 10 sessions. I will be presenting on "Managing Security in the World of Web2.0 and SOA". The aim of my presentation is to bring out the key common themes between Web2.0 and SOA, and at then address some of the common security concerns around web services. Another key enabling technology for Web2.0 and SOA is Federation that allows businesses and consumers to collaborate across organizational and network boundaries. I will also touch upon what is Enterprise2.0 and how do you apply mashups to enterprise services.

The event this year will include a much larger audience interested in applications with Siebel (Oracle|Siebel) and Peoplesoft (Oracle|Peoplesoft) having joined the ranks over the last 2 years. Fusion Middleware and Fusion Applications with emphasis on standards-based open architecture of SOA will be one of the key focus areas.

And yes, Sir Elton John will be performing. This should be fun. If you are attending, you should visit our Identity Management booth and say hello. And if you are not, visit the website to read material and watch the webcasts. And yes, Larry Ellison will be giving a keynote in addition to technology development leaders Chuck Rozwat and Thomas Kurian (his debut keynote at OpenWorld), and applications head John Wookey.

CNET's News.com has some nice pictures.

Enterprise 2.0 is same as Web 2.0

I think some of us are over thinking the Enterprise 2.0 and Enterprise Mashups. The key is to learn from history and apply the knowledge to the present. Jeff Nolan has nicely summarized some of the discussion around Enterprise 2.0. Rod Boothby has raised the question of mashups in the context of Enterprise 2.0 I find Vinnie Mrichandani's post to be the best description of issues we need to consider and resolve.

However, the idea of Enterprise 2.0 seems inside-out to me. People from the enterprise world used to large ERP-style applications and deployments thinking in traditional terms with a willingness to tweak the model to incorporate 2.0 from Web 2.0. This will not suffice. The square (pun intended) peg of Enterprise software will not fit into the round hole (no pun intended) of Web 2.0

A lesson in history

The IT departments and software vendors that had significant investments in client-server tried to simply adapt client-server to the web rather than moving to true N-tier architecture. Slapping a portal on top of client-server software helped SI's and vendors make some money but they were no competition for applications designed from the ground up for the web. A lot of companies are now trying to do the same by trying to 'service-orient' their existing applications. I find the tone of discussion on Enterprise 2.0 suffering from the same problem.

Principles of Enterprise 2.0

The real Enterprise 2.0 applications are the SaaS applications (On-demand) from the likes of Salesforce.com, NetSuite, Siebel On-Demand etc. Some key characteristics of Enterprise 2.0 applications will be SaaS (Software-as-a-Service) delivery model, SOA architecture, simple web services based integration, extensiblity and open-ness.

SaaS & Long-tail: I would argue that all Web 2.0 applications are hosting-capable if not entirely hosted. The benefits of the long tail come into effect only when you have large number of users and but for a few very large companies it is hard to see how this effect will play out if the application is not hosted.

SOA, Web Services & Mashups: The Web 2.0 mashups were enabled by open standards-based APIs with many of them using either web services or other standards such as ATOM. In the enterprise, you need similar capabilities to do end-user integration. And SOA & web services help you expose your internal applications for integration. Rod Boothby poses an interesting question on what will Enterprise 2.0 mashups look like. I strongly believe (that's what blogs are meant for, right?) that Enterprise 2.0 mashups will look just like Web2.0 mashups. Just as your internal web apps for email and procurement now look just like Yahoo! and Amazon, in time your internal Enterprise 2.0 apps will look like the Web2.0 apps. Here is an example- you are browsing a catalog in your procurement application. As you mouse over the price, a bubble pops up (AJAX style) to tell you whether this is within your purchasing authority. This is a mashup of procurement and financials.

Why is this so hard?
If Enterprise 2.0 looks, feels and behaves like Web2.0 then why is it so hard. It is not hard, its hard for the existing enterprise applications that will in five years be legacy just as client-server applications became legacy and mainframe apps before that.

Are we done?
No, we are not done with building out Enterprise 2.0. The CRM space has made a good beginning and there are several others in various stages of development. With a new class of Enterprise 2.0, there will be new problems. Rather than looking for how to morph Enterprise 1.0 (did we ever finish 1.0, btw) into Enterprise 2.0, the key is to look at the Enterprise 2.0 and fill gaps. Some of these gaps are in the areas that have been brought up by Jeff Nolan and others. These include:
- Integration 2.0: How will Enterprise 2.0 applications integrate with each other? Will it be a hosted integration model?
- Identity 2.0: How do you enable single sign-on in Enterprise 2.0? Again rather than thinking about simply connecting your existing LDAP to Enterprise 2.0, look to online identity service providers.
- Customization 2.0: (I am as annoyed with having to say 2.0 after every term that applies to this new class of apps but couldn't resist it.) The question is how do I customize the new applications for specific verticals? Again look for the emergence of experts from verticals and regions. A Chinese company that customizes your vanilla Financials system to deal with national regulations. And then yet another company customizing that offering for clothing manufacturers to account for specialized business processes to deal with QR (Quantitative Restrictions) on clothing imports. And so on and so forth. Essentially, you end up with a network of service providers rather than customization by internal IT.

There are other issues of service-level monitoring and guarantees, analytics, bulk upload, security etc. Rather than trying to solve all these problems a priori before we build Enterprise 2.0, these concerns will get sorted out as we build out the services for the 2.0 world. Those of us who fall into the not good enough trap need to go back and re-read Innovator's Dilemma. The barely good enough for some will, in time, with iterative innovation become good enough for most.

I think this is an interesting discussion and I look forward to more exchanges and posts on this topic.

Update: FASTForward Blog's Joe McKendrick has picked up and extensively commented on this post at Fitting the Enterprise 2.0 Square Peg into the Web 2.0 Round Hole

Update: ZDNet's recent post entitled Facebook for Enterprise = Enterprise appears to agree with my viewpoint.

Tags: SAP Web2.0 SOA Enterprise2.0 wisezen