So convinced are many IT pundits that Web 2.0 technologies are an irresistible force for businesses that they are now referring to the trend as Enterprise 2.0 or even CRM 2.0.
Focusing on online collaboration and sharing by users, Web 2.0, the next generation of Web-based services, is defined by rich interactive, user-friendly interfaces that enable fast and frequent interaction by users.
Web 2.0 has spawned a new breed of dynamic applications that run primarily on Internet servers and company intranets. These features automatically update content and are very collaborative, drawing information from multiple sources, including user contribution.
The dynamic rich Internet applications (RIA) of Web 2.0, include wikis and blogs (Web logs), and podcasting, really simple syndication (RSS), social networking on sites like MySpace, Facebook and Friendster, Avatars, and Web services (software systems that enable different systems to communicate automatically, passing information or conducting transactions).
There are also video-sharing sites like YouTube, Google Video, Vimeo and Videoegg, the multi-player 3-D virtual world Second Life, mash-ups (a website or Web application that combines content from more than one source) and peer-to-peer (P2P) networking (sharing music, videos or text among a closed group of users).
Wiki is a Hawaiian word which means 'quick' or 'super-fast', and, thanks mainly to the success of Wikipedia -- the free online encyclopedia that anyone can edit, which was established in 2001 -- the word has now entered the English lexicon.
Unique server software
A Wiki is a type of server software that lets users create and edit Web page content using any Web browser. It usually also provides tools to allow search and revision control. What makes a wiki unique among other group communication systems is that the software allows the organization of contributions to be edited, as well as the content itself.
Wikis mean that everyday users can create and edit any page in a website. Advocates say this is exciting because it encourages democratic use of the Web and promotes content composition by non-technical users. Traditional businesspeople, nurtured in the world of corporate hierarchies and strict control, however, worry about losing too much authority.
But many early adopted enterprises, both large and small, are not deterred from entering the world of Enterprise 2.0.
Giant pharmaceutical company Procter & Gamble recently rolled out a series of blog and wiki-style tools to users of the different brand products. They are seeking to stimulate better consumer input, to help shape their product development lifecycle.
Global management consulting, technology services and outsourcing company Accenture is deploying FaceBook for its 150,000 employees, spread across the globe, so they can quickly find expertise on any topic. They also have their architectures hosted in a wiki site to accept continuous input and collaboration from Accenture developers all around the world.
Profitable Second Life
Since opening to the public in 2003, Second Life, the 3D virtual world entirely built and owned by its residents, has mushroomed in popularity and today is 'inhabited' by a total of nearly nine million people from around the globe. Users can create their own 'avatars' (a digital animated character) and interact with others.
Perhaps inevitable now that computer games outperform the movies on the entertainment popularity scale, Second Life has also been seized on by some major industry players for commercial purposes. There are currently more than 7,000 businesses operating in this virtual world.
Deutsche Post World Net (DPWN), the parent company of international freight express company DHL, joined the Second Life platform in May
DPWN believes 'real-life' companies are now interested in the economic side because Second Life is developing more and more into a virtual marketplace. "Visitors can procure ownership rights and offer their services (e.g. skills in constructing 3D buildings) or products to the online community," a spokesman says.
"The means of payment is a unique currency, the Linden dollar, which is handled by specially established exchanges and thus offers a variable exchange rate.
Selling real products - virtually
"Second Life not only offers companies a platform on which to present themselves and their services, but on which they can also offer products. Some companies have established online shops in Second Life in which avatars can buy 'real' goods."
Dell Computers has a Second Life system where customers can build their own computers and have them delivered to their door.
IBM has established a campus on Second Life.
There is even a dress designer who now claims to earn about US$60,000 annually by selling fashion outfits for Second Life avatars; virtual clothes for virtual people.
Accenture, which has its own island on Second Life, experimented with it by hosting events for IT recruiting. They were astounded when they achieved an 83 percent improvement in recruiting outcomes, hiring many senior technical people, compared with traditional approaches.
"We did it really as an experiment and we found everything from very good SAP developers to SOA expertise, IT outsourcing and technical architecture," says Accenture's chief technology architect, Paul Daugherty, based in New York .
"We're now looking at how we can institutionalize this a bit more and Second Life and other virtual tools in the recruiting process in more countries."
In July, American Employment services industry Leader Manpower Inc. announced it had created 'Manpower Island' in Second Life, where job seekers, employers and entrepreneurs can come together in an interactive forum to learn about and explore the World of Virtual Work.
"Visitors can share ideas and identify new opportunities in traditional and nontraditional meeting spaces ranging from an amphitheatre to a relaxing spot on the virtual beach," Manpower Inc. says in a media announcement.
"Built as a learning community, Manpower Island features a variety of virtual work resources, including an orientation trail to teach 'newbies' how to move around, interact and teleport around Second Life; and a series of work-related stations offering advice on creating a virtual resume, preparing for both Real Life and Second Life job interviews, obtaining appropriate attire and finding a job in the virtual world." Canada 's Vancouver Sun reports that the Vancouver Police Department has become the "first real-life police force to have officers in the virtual world of Second Life". The department has created avatars dressed in a specially-designed uniform to attempt to "attract tech-savvy" recruits.
Vancouver 's head of the technical crime division, Kevin McQuiggen, was quoted as saying: "I just need smart, tech-savvy people. As we move into the future, we're going to need people who understand technology, who are conversant with it, understand its impact and understand how to use it."
Maybe one blogger got it right when he said in a recent post: "Perhaps the question we will ask in 5 or 10 years is , 'Why did companies ever set up websites with a one-page-at-a-time mentality, when the opportunity to create an experiential environment, in places like Second Life, existed'?"
Web 2.0 booms in Asia
Market intelligence and advisory services house IDC forecasts that Asia 's homegrown Web 2.0 industry will boom because of its regional population of 900 million consumers younger than 16 years. This youth segment accounts for about a third of Asia's population, compared to less than 20 percent in mature economies such as the U.S., U.K. and Germany.
IDC research has found that "more than 80 percent of these consumers are coming from India and the PRC . It's found that one third of all (unique) Internet users in 2007 are Web 2.0 users in India, 83 percent for the same in Korea and 70 percent in PRC , indicating that Internet users are quickly going beyond emailing, chatting and Web surfing."
IT research and advisory firm Gartner has, however, found that the initial intake of Enterprise 2.0 in China and India , has been very low.
Senior Gartner analyst Partha Iyengar, is the co-author, with fellow analyst Jamie Popkin, of the Harvard Business School Press book, 'IT and the East -- How China and India are Altering the Future of Technology and Innovation'.
"When I ask an Indian or Chinese CIO audience how many have been to Second Life, it's usually less than one percent," Partha says. "The Web 2.0 phenomenon is, however, poised to allow China and India , with their huge consumer pool markets, to have a massive multiplier effect on how ICT progresses."
IDC maintains that the Digital Marketplace will flourish in Asia/Pacific "because of the sheer size of the population, the growing consumer influence with the rise of new money and government push to create a vibrant IT and Internet savvy population in many parts of the region, including the rural areas and villages".
"The region's entrepreneurial spirit and aspiration combined with the strong need for localization will lead to homegrown versions of global Web powerhouses." says Sandra Ng, VP of IDC 's Asia/Pacific digital marketplace research practice.
IDC estimates the total ICT spending, from the provider community of this sector, to range from 0.05 to 0.2 percent of the total ICT spending within most countries. While this proportion and the revenue generated by these providers are small, IDC believes that monetization of business models will "take off in the next 2 to 3 years". "With the entry of new Web 2.0 providers in these markets," IDC says, "the local economies will attract new venture capital, angel investors and other investments." Accenture's Chief Technology Architect Paul Daugherty -- who recently spoke in Singapore at the IT Management Association and Accenture-organized CIO Workshop -- says Web 2.0 was like SOA; a hackneyed buzzword that was often misused.
"Web 2.0 refers to a lot of different things from social computing to search," Daugherty says. "It's emerging rapidly and we believe there are a lot of opportunities to apply Web 2.0 concepts in a real fashion into an enterprise...What's happening with RIA is we're trying to build the richness back into the user interface without the complexities and challenges of co-distribution and the technical difficulties that came with a fact-plan kind of architecture. That's what technologies like AJAX are allowing you to incorporate within your enterprise applications....Fundamentally, consumers and enterprise IT want the same thing -- simplicity," Daugherty says. "Google is relentlessly focused on simplicity; a Google page does not change other than the artwork around the Google logo because they are focused on usability and user experience."
The bad news -- IT legacy
Daugherty says the bad news about Web 2.0 and the push for simplicity is that it is inevitably difficult within an enterprise IT to deliver, because of the amount of IT legacy that has accumulated over the last decades.
"It's not as easy as buying an integration tool and plugging a couple of models together," he says. "About 70 percent of the interfaces that our clients do are just internally connecting their systems together. That's consuming a large share of IT budget. Nevertheless, there's a big demand for more interoperability. Until this can be addressed, it's going to lead to an impedance mismatch between a consumer technology and the enterprise."
There are two key questions Daugherty believes must be answered before any enterprise can properly enter the world of Enterprise 2.0:
Are your IT systems ready? IT will become an inhibitor to the flexibility of doing things. The question is how can you start to get IT in shape with the flexibility and interoperability and integration that you need, to implement some of these things and the various controls and security you are going to need as well?
Are your business processes ready? Getting your business processes right is more important in a collaborative environment. If you roll out a wiki for collaborative development in a certain area, how does that link to and affect the business processes that you have.
Of course, using Enterprise 2.0 can be a two-edged sword.
Daugherty says the Los Angeles Times newspaper found it to be a definite threat, after they took the opportunity to become involved.
"The LA times, put up a wiki in some blog and their editorial policies got publicly thrashed. They shut it all down in the end because they did not like the feedback they were getting. They viewed it as a threat and they have to figure out how to deal with it now."
SaaS and SOA foundation
Daugherty believes that one of the foundations for Web 2.0 is the software as a service (SaaS) business model popularized by salesforce.com.
"Getting your SOA right and exposing the right business services that can be incorporated into other parts of your enterprise technology, could be a critical step toward incorporating consumer and Web 2.0-type technologies into the enterprise," he says.
IDC says that although not every sector or provider has figured out ways to monetize their services through Web 2.0, the collective opportunity is growing.
"Advertising and subscription are the most common business models today and these are expected to grow aggressively," IDC says in a media announcement. "Premium charges (at times on top of subscriptions) are a high margin model, although identifying and going to market with commercial services that are extremely well-received, is never easy. This model, however, is generally well-received among small to medium-sized business users."
"Transaction charges, typically on top of the commission or revenue sharing model, are another popular method as more online transactions are made and linked to Web 2.0 services."
In January 2007, global researchers McKinsey and Company's McKinsey Quarterly conducted a survey into 'How Businesses are Using Web 2.0'. They received responses from 2,847 executives worldwide, 44 percent in C-level positions.
More than half of the executives surveyed said they were pleased with the results of their investments in Internet technologies in the past five years. Nearly three-quarters said their companies planned to maintain, or increase, investments in Web 2.0 technologies in coming years.
More than three quarters of the surveyed executives familiar with Web 2.0 trends said their companies were already investing in one or more of them. The most frequently cited investment was Web services, being used or considered by 80 percent of the respondents familiar with the tools. Peer-to-peer networking was also popular; 47 percent said they were using or considering it.
Asked what might have been done differently to make the previous investments in Internet technologies more effective, only 18 percent of respondents to the McKinsey Quarterly survey said they would not have acted differently. Forty-two percent said they would have strengthened their companies' internal capabilities to make the most of the market opportunity at hand. "Among the 24 percent who say they would have moved faster, many describe their companies as fast followers or early adopters -- a strategy consistent with the view that speed is of the essence in technology investments," the McKinsey research report stated.
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