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Economics 2.0




Highly Effective Strategies for Putting Your
      Business on a Recession Diet
                Dion Hin...
Introduction
Dion Hinchcliffe
 • ZDNet’s Enterprise Web 2.0
   • http://blogs.zdnet.com/Hinchcliffe
 • Social Computing Ma...
The Plan
• 9:00am - noon
• Break at 10:15am
• Twitter tags #w2e and #econ2
• Google Moderator
 • http://bit.ly/econ2questi...
Overview
•   Exploration of new ways of doing old things

•   New economic, social, and cultural models

    •   With an e...
The Map of Opportunity
  Innovation                                                                                       ...
The major shifts
 • In who creates value (the network does)
 • How much control we have over our
   businesses
 • How inte...
Avoiding “cargo cults”

 • Cargo Cult n. A
   group conducting
   rituals imitating
   behavior that they
   have observed...
Evaluating candidates
• The criteria:
 •   Cheaper: Less waste, more
     efficient, and lighter weight.

 •   Better: Fast...
The challenges
• Cultural “chasms”
• Disruption
• Cost
• Risk
• Difficulty
• Repeatability
However, it’s usually a
    people problem:




The biggest challenge is in
  changing our thinking
Rating the Economics 2.0
        contenders
 Challenges                                   Repeatability

                 ...
The network is a
    big place today
• All your customers
• All your competitors
• All the ideas and
  innovation
• Only a...
Never before reached level of
 scale is driving new changes
Likely candidates                                                 (social media
                                          ...
No small system can withstand
sustained contact with a much
 larger system without being
   fundamentally changed.
The motive forces of
21st century economics
                                ^
                            at we
          ...
What is a Network Effect?
• A network effect occurs when a good or service has
  more value the more that other people hav...
Building Sustainable Value

                • Even small network have large
                  potential network effects
  ...
Social Business
(aka Enterprise 2.0)
Modern Social Computing:
         Enterprise 2.0

• Concieved by Harvard Business School Professor
  Andrew McAfee
• Define...
Applying the
                         “Web 2.0 effect” at work
• Enterprise 2.0
                                          ...
Perceived Benefits Of
         Enterprise 2.0
• Increased knowledge retention
• More adoption and use of knowledge manageme...
Why is
   Enterprise 2.0
     different?
• Maturation of techniques that
  leverage how people work
  best
• Realization o...
The Enterprise 2.0 Checklist
• SLATES
 –Search
 –Linking
 –Authorship
 –Tagging
 –Extensions
 –Signals
SLATES unboxed...
Enterprise 2.0: Richer
     Outcomes
Push vs. Pull Based Systems
Two more important reasons
      for Enterprise 2.0

• Non-interruptive and leveragable...
Challenges:
      The enterprise is not the Web

• We want to replicate the positive
  aspects of Web 2.0 platforms in
  t...
Enterprise 2.0 Ecosystems
           Enterprise 2.0                                   Peer Produced
                      ...
Significant Motivation Exists
          To Adopt Enterprise 2.0
• Increased levels of productivity that were inaccessible u...
Enterprise 2.0 Benefits
• Hundreds of Enterprise 2.0
 projects exist worldwide currently
 •   Based on aggregation of all known contacts and
     ...
The majority of Global 2000 firms
 are now buying Web 2.0 tools
• Early success stories emerging
 • Case studies now exist from:
   •   Bank of America, Boston College, Dresdner Kleinwor...
Enterprise 2.0:
 The bottom line
• Repeatable
• Medium Risk
• Proven Benefit                       Ready for Wide
         ...
Open Supply
  Chains also
            n as
        know
          APIs
vs.             :
The Platform Overtakes the Web Site
Example: Amazon
• 1st Gen. Product: E-commerce store
   – No differentiation
   – Scaling of a single site
   – Single sit...
Tour


• http://programmableweb.com
Open Platform vs.
 Closed Platform
The Market Share
      Opportunity

•   The vast majority of Internet user activity is
    elsewhere, on 3rd party Web sit...
Opportunity:
                         Going To the Customer
                          and Open Web APIs
                  ...
Platforms vs. Applications
           Distribution Models              Target Audiences
                                  ...
Platforms vs. Applications
                                                      Distribution
Distribution Models         ...
Key API Goals
•   Leveraging existing investments as much as
    possible (reduce rework in design and architecture)
•   P...
The Distribution Opportunities
                                                        3.5 billion wireless users
        ...
Long-term future usage
   breakdown w/API
          Other Apps

                          • Reach every distribution
     ...
Reasons Developers Select
              APIs

Key to initial adoption            Key to long-term adoption

•   Provides a...
“Platforming” Your
     Business

 •   Requires opening the server-side to 3rd party
     developers
     •   Allowing the...
Open Supply Chains:
 The bottom line

• Good repeatability
• Can be costly          Strategic

• Unproven in          Indu...
Mashups
A Short History of
    Software
Connecting people and data
• SOA is a modular software architecture, and the modules are
  services designed to interact w...
Key Points
• Gartner has reported that Service-Oriented Architecture is
  the leading organizing principle in the enterpri...
A key Goal of Web 2.0 and SOA:
Turning Applications Into Platforms

• Openly exposing the features of software and data to...
But existing integration models
     have been challenged
• Most SOA initiatives are delivering low ROI to the business
• ...
The results of a large new
SOA effectiveness study:
    •“It has become clear to me
     that SOA is not working in
     m...
Demand for Breadth
             Integration
• “48 percent of the
  CIOs we surveyed
  said that they plan to
  implement s...
And we now have real-world experience with
 traditional means of connecting to our data

• Traditional Web services
  was ...
Strange Attractors: Similarities
    between Web 2.0 and SOA

• Web 2.0                           • SOA
                  ...
Enabling New
Consumption Scenarios
          • Cut-and-Paste deployment
            anywhere on the Intranet
          • C...
Definition: Mashup
• “A mashup is a Web site or Web application that
  seamlessly combines content from more than one
  sou...
Mashups
• Strong preference for reuse over coding
   – Innovation in assembly is the core value instead of
     ingenuity ...
What’s happening on the
      Web today
 • The growth of Web sites with highly valuable
   “portable” content and function...
Connecting to and making
    use of our data
 • Building open platforms instead of stand-alone applications
 • Forming sel...
The Global SOA has surpassed our
     enterprise IT landscape

• Some businesses have hundreds of
  thousands of users of ...
Examples
• Amazon and their highly successful Web Services Division (with
  hundreds of thousands of business consumers of...
With traditional methods, many (perhaps
    most) software solutions are too
    expensive to build or buy today
The Focus:
Rapid Business Solutions
           • Full resources of the Web and
             the Intranet
           • Ente...
Situating mashups in the
       workplace:
Demo


• http://pipes.yahoo.com
• JackBe Presto
Mashups:
     The bottom line

•   Excellent repeatability

•   Inexpensive               Ideal for Early
                ...
Online Community
Eliciting participation
   on the network
•   Social media: A continuous stream of shared
    (two-way) conversation and k...
The Premise

Customer engagement today
is much more than products
and their marketing
campaigns. It's a meaningful
emotion...
Four levels of
 community
Online community
 •   Lifestyle products and brands generate strong,
     highly engaged communities on their own:

     •...
Example:
What do online
communities do?
•   People find and connect with each other based
    on a common, shared idea

•   Socializ...
Marketing vs.
         Community
•   Customers and potential customers have the
    greatest resources to market and sell ...
The means and
          methods
•   Platforms:

    •   Drupal, Joomla,
        Lithium, Crowdvine

•   Community Manageme...
The Three Essential
Strategy Components
Social Media:                  Online                     Collective
             ...
The Story of KatrinaList & XM Radio
• Hurricane Katrina
   – Survivors emerged and announced
     where they were on their...
Online Community:
 The bottom line
•   Medium repeatability

•   Can be costly

•   Proven ROI

    •   Dramatically lower...
Open Business
   Models
Network-Driven
  Open Collaboration
    Breeding New
  Business Strategies
     Methods:


  Open Source
                 ...
Product
Development 2.0
Open business models are
  transforming the market


• Product Development
• Marketing and Advertising
• Operations
• Cust...
Examples
• Android
• Gold Corp.
• Crowdspring
• http://netflixprize.com
• Doritos UGC advertising
• http://OpenStreetMap.org
Sourcing Models


                                                         open
                   internally      outsour...
Open Business Models:
  The bottom line

•   Medium repeatability

•   Medium costs

•   Significant cultural       Ideal f...
2.0-era platforms and
  development tools
“My Web site is bigger
than your enterprise”
Today’s Software Applications
        Are Also Extremely
            Sophisticated
•   Highly distributed and federated

•...
There’s A Lot To
Master Today To
Create Credible
   Products:
The application
“stack” is bigger now
Recent technological
    innovations coming primarily
       from the online world
•   Cloud computing

    •   Utility/gr...
Cloud Computing is just about
    12 months old but changing the
            game quickly
• Provides enormous advantages i...
Comparing Two of the Largest
  “Platforms as a Service”
The cloud computing space today




                                        r
                                   le fo n
 ...
Non-relational
                  databases
                                       •
•                                     ...
The New Dynamic
  Development Platforms
• The Web development industry has moved to a focus on
  “productivity-orientation...
Performance of Dynamic
Languages Is An Issue Though
Ruby on Rails
• Ajax-ready but works with all RIA
  technologies
• Automatic Object/Relational Mapping
• Sophisticated Mod...
CakePHP
• Open source Web application
  framework written in PHP
• Works with all major RIA technologies
• Modeled after t...
Groovy & Grails
• Groovy is a dynamic language for
  the Java Virtual Machine
• Has strengths of Ruby, Python, and
  Small...
Changes to the processes
that create architecture

• Increasing move to assembly and integration
  over development of new...
The Web’s Version
        of Agile
Ready for Wide
  Adoption



   •   Shadow Apps for real-
       time feedback

   •   ...
An extremely competitive
environment: Our architectures
    must explicitly focus on
     building network effects
New Distribution Models
How do we
 re-imagine our
  products and
   services for
the 21st century?
Challenges to Transitioning to
 New Architectural Modes
• Innovator’s Dilemma
  •   “How do we disrupt ourselves
      bef...
What we often see in
the marketplace today
• Too many copy-cat products
  •   Failure of imagination and courage

• New ar...
The 1.0 world is having
  its own problems

• The time is right for change now more than
  ever before
• We all have to le...
Key Lesson:
       We now have a
  fundamentally new and
better set of lenses through
which to look at leveraging
   value...
• Push to pull systems
• Web 2.0 design patterns and business
  models
• New modes of software, platforms, and
  architect...
The new Web 2.0 era distribution
                          models remain largely untapped
Number of Practitioners




    ...
It’s time to change
          our DNA
• Moving from the 20th century towards
  21st century businesses
• Deeply understand...
The rewards are
   considerable
• Products and services that are sustainable
• Successful transition to a rapid evolving
 ...
Major Opportunities in 2009

• Redesign products and
  services for the 21st
  century.
• Strategically move IT
  infrastr...
Questions
         Slides:
dion@hinchcliffeandco.com
Ruby on Rails • Ajax-ready
Ruby on Rails • Ajax-ready
Ruby on Rails • Ajax-ready
Ruby on Rails • Ajax-ready
Ruby on Rails • Ajax-ready
Ruby on Rails • Ajax-ready
Ruby on Rails • Ajax-ready
Ruby on Rails • Ajax-ready
Ruby on Rails • Ajax-ready
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Ruby on Rails • Ajax-ready Economics 2.0 Web 2.0 Expo SF 2009

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Ruby on Rails
• Ajax-ready but works with all RIA
technologies
• Automatic Object/Relational Mapping
• Sophisticated Model View Controller
Support
• Convention over configuration
• Radically-oriented around Web
development only
• Very high productivity (IBM verified
10-20x older platforms)
• Open source and free
• Runs major sites like Twitter
• One of the most popular new platforms
• Has clones in most other major languages
Ready for Wide
now. SaaS versions too: http://heroku.com
Adoption

Published in: Business, Technology

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