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?

Did Huawei cause Cisco to buy WebEx?

I just returned from the SaaS Summit organized by OpSource in Monterey, California (more on that later) and a lot of the discussion turned to Cisco's WebEx acquisition and what it means for SaaS and the high-tech industry in general. Most of the reasons cited for Cisco's move to acquire WebEx by experts were around the following themes:

• Cisco is driven by the growth potential of selling services directly to corporate customers
  
• Cisco is moving into IP services to compete with Microsoft's move in IP TV etc.

But one of the key points seem to be missing in this discussion. I am of the opinion that commoditization of its core router business as evidenced by Huawei's success in China and global aspirations, and potential for other disruptors such as open source routers running on commodity hardware may have given the added impetus for Cisco to move up the stack. After all, there are several risks to the strategy to move into applications including Cisco becoming a competitor to its large Telco and service provider customers. I am certain that Verizon and Vodafone of the world that are looking to sell value added services on top of their very expensively built networks will not find this move friendly.

Emerging Markets Demand Pay-as-you-go:
Another way of thinking about the Huawei impact is to think about the fact that consumers (individuals and corporate) are not always willing to spend millions of dollar up front to build out networks and realize the value over time. It is much easier to sell pay-as-you-go services in emerging markets where capital is often limited. In fact, if Cisco succeeds in this strategy, it may inspire other high-tech vendors to move to subscription pricing and SaaS model for emerging markets.

Services not Servers:
The WebEx acquisiton could also be seen as the begining of the move to selling "IP services" rather than do it yourself IP boxes to telcos and corporates. You can call this a Solutions strategy, an IP Services or SaaS strategy, or pehaps even hardware externalization or hardware-as-a-service . In the sense that rather than a corporate or telco buying Cisco hardware to build out a new Voip, web conferencing or video conferencing servic, it would now just buy a service. Nicholas Carr questions eloquently "Is the server industry doomed?" in this blog post where he talk about compute servers. I would extend the same argument to "IP-Services Servers" from Cisco.

What do you think about the China/Emerging Markets angle to Cisco's move? How will Telcos like Verizon and BT respond to this?

(As with all posts, these are my personal opinions.)