Not many concepts/ technologies have received the kind of hype that Web 2.0 has been subjected to. Observers have even gone ahead and called Web 2.0 the SOA of the Internet. Not only does this hype show no signs of abating but today companies from Intel of Wells Fargo are figuring out thow they can create an enterprise that collaborates, innovates freely and "breathes". Given the imaginative name "Enterprise 2.0", will these technologies change the way employees and teams collaborate and eventually the way companies innovate? Will Web 2.0 be a real-time innovation delivery tool - imparting the same benefits to people as SOA does to computing and business processes?

Abstract

The session explores the impact of next generation web technologies, Web 2.0, on what we do and the way we do. The Web Technologies are changing the entire business models of the organizations, both internal and external. The panelists discussed about the relevance of Web in different business models and how the investments in Web technologies can be leveraged for maximum business benefits. What is going to be the next stage of Web Technology? Panelists concluded that the fastest growing consumer base, ease of communication and opening up of proprietary technologies would likely to bring the next revolution in the overall business strategies of the organizations in the coming years.

Discussion

Sukamal Banerjee: The world's fastest growing population, which happens to be the number of web users, is changing the way we lead our lives, at home and at work. We focus on how it has changed our work life.

Members on the panel include Steve Devlin, CTO of EMI Music. Steve is based out of London, UK, and his responsibility is to take global technology decisions as it applies to multiple facets of EMI's stack of delivery in terms of its internal and external customers. He brings in a lot of experience working with the big five and has been working in the media and publishing industry for a long time. Jason Kalich is the general manager of all RXD or Relationship Executive Division of Microsoft IT, Microsoft's internal IT division. Jason has been a technologist and he's one of those in a transition from building products to implementing products. So just about a year and a half back, Jason moved from his role in building some server products for Microsoft, on to the IT side and making sure these implementations go on smoothly. Sharad Sharma, CEO of Yahoo India, takes care of all path development that Yahoo does for emerging markets. He has over 20 years of tech experience.

Steve Devlin: I will explain what Web 2.0 means to the music industry and probably media and entertainment industry in general. It falls under three categories. The first is communities, social networks and Internet sites like Facebook and MySpace. The second is user-generated content and distribution. This is probably more in the domain of Youtube, flicker and garageband.com. The first two areas overlap to some extent. The third one is more of an internal focus - bridge Internet applications and Service Oriented Architecture which is being seriously looked at as an enabler across the music industry.

When you look at the community site, communities and recommendations is nothing new in the music industry; it's always been a very passionate subject for people. Most of us, if not all, have been influenced to buy records based on the recommendations of a friend. In the process, we have also made friends who share the same interest. The booming social networking sites have added to the pace. Technology has proved to be a faster and a more powerful tool than word of mouth.

This, according to me, is both a threat and an opportunity, but to us it's more of an opportunity. It's a threat in the sense that it's another voice in what's increasingly becoming a busy space. So the effort that we spend promoting our music and trying to get the message across has to compete with the social networking noise as well. But when we talk of opportunity, it's a large in one or two areas. One, the A&R side of our business, if you like product development, is to be able to use social networking technologies as fast and cover a lot more ground than earlier used. Young, unsigned artists and bands are usually up on those sites and are creating communities. Our A&R departments and those of other music companies and other media companies are surfing these sites, are looking for hot spots and areas where clubs or bands are creating great attention and that allows them to focus their activities when they actual go out in the field and look at bands. Still there is no substitute for that and that's what scouts still do in the music industry.

The second area of opportunity is the marketing and promotion span and deciding when to either reduce span because something is not working or when to increase span because we've got some indicators that it will be a big hit. This again is a very powerful tool for us because while those communities used to exist and people used to talk about music, it wasn't too visible. But now, as soon as we release new music or a video we are able to see what people are saying about it in almost real time.

The fundamentals of our model have not changed and that is why we are able to spot talent earlier than the others. We acquire rights to that content in exchange for advances and also for the backing of a large company which will have a lot of focused and talented people behind promoting it. The fundamentals are still there. This is reinforced in the fact that when I look at Youtube, the most watched items are very rarely amateur user generated content. They are usually ads from large advertising companies or music videos that we have produced. We are looking at operating with those kinds of sites, to license the content and fingerprint it so that when users are creating home videos and other things, they are using content that we own. The copyright to that fingerprint is picked up by Youtube and the some of the ad revenue that they get are shared with us and we in turn can pay the artist.

Web 2.0 is rich in Internet applications technologies such as AJAX and the like and SOAs. The music industry has been quick in embracing the Internet applications, since the industry has wide geographical reach but has only small sales and marketing offices in these places. It's difficult to service those with clients-server or desktop, desk-side rich applications and we are delivering rich applications through a standard web browser.

On the service-oriented side, there is a lot of collaboration happening and our partners expect us to open up data and systems to them. Our challenge is that most of those different players that we collaborate with have overlapping but different requirements. This lends itself to the portal services model so that we reuse services so that press and promo journalists, for example, are able to browse and see media assets and also charts information where an artist manager may not be interested in media assets for marketing purposes but is interested in charts and sales. Our digital retail partners are interested in browsing the catalogs and other things. We need to bundle the services into portals that is easy to use.

Sukamal Banerjee: The traditional industry, which had a very long-term established business model, is changing and is adopting this rich Internet platform. How is this being viewed and applied in a more technology-savvy company? What are some of the areas in which it's going to result in something significant in terms of business benefits?

Jason Kalich: Today, the web is a huge success and the amount of information stored is vast and impressive. But only some of the information is relevant to you and some are not. The objective of Web 2.0, particularly of Microsoft, is to bring relevance to that information. This is done by circling communities around that information, by putting services in front of that information allowing you to get to the relevant information and at the same time, allowing tools and frameworks to be assembled by the users to create the view they want.

The way Microsoft is looking at Web 2.0, the future will all be about how to bring the best out of the web, the desktop and the best of devices that exist. In the future, it won't be just a browser that you would be using to have a web-based experience. Today, cell phones and devices are pervasive but as people come to rely on them, online and offline usage of those capabilities are critical and is enabled by modern technologies within communities, within services, within publishing tools, within frameworks that we allow to create services. All these are being done to make the information on the Internet more relevant to users.

One of the ways Microsoft is using Web 2.0 technologies is to try to bring relationship management to the forefront of what they do and put customers and partners in charge of the relationship. How are we going to do that? We could have structured ways of doing that, but the truth is every customer is different and every partner is different and allowing those customers and partners to establish those relationships on their terms is a successful avenue.

If you look at the modern technologies and social networks, its differentiation based on what users and communities need that makes them so valuable. As we move forward to provide those technologies for customer-based engagements through Microsoft, their ability to plan with Microsoft, exchange documents, ideas through our web-based technologies. Our ability to market those customers and share added value services from ourselves as well as partners, when we transact with customers. We've managed experiences where we sell products and also have services that are subscribed to.

The only thing that remains consistent is the customer and so providing Web 2.0 technologies and services in social surroundings around those customers; we view our ability to better serve customers as a competitive differentiator in the future. It doesn't stop at selling, you need to take care of the service aspect as well or go in partnership with partners and drive engagements with customers.

How do we put the customer in charge of that relationship and how do we let it be known if the customers are satisfied with Microsoft or satisfied with our partners? Web 2.0 technologies are merging to allow community experiences to be a governing and authoritative source. So we view this as a massive differentiator in the market.

Partnership plays a big role and so also does the self-service technologies in Web 2.0. This is emerging and we get to define it now. I think the best way we can define it is by engaging with the customers and allowing them to help define it. Help people understand what their needs, help customers, help technology companies, help each other understand what the needs are for collective industries.

Sukamal Banerjee: What is driving this change? What are the basic factors? Is it technology availability or something else?

Sharad Sharma: Tim O Riely coined the term Web 2.0 back in 2003 during the dotcom bust. He said it is not the old Internet; it is the new Internet - the Web 2.0. He titled a conference Web 2.0 and there was a raging debate. Nicholas Carr, who got into a controversy after he wrote 'IT doesn't matter', has been against Web 2.0 term for a long time. On October 5, 2004, he stepped in and said I can live with this new definition of Web 2.0 that Tim has now expounded. The definition of Web 2.0 is "intelligence in the back end".

The whole concept of Web 2.0 has evolved from being business transformation, and then something on the front end part of the technology and now back into this model saying, the front end is important and exciting but it is really an intelligent back end that makes it all possible.

In the midst of all this, last year Andrew MacAfee came up with his new term - Enterprise 2.0. The blogs were abuzz again. What's this new term? What does it mean? He said one way to understand this impact is to think in terms of the acronym called SLATE. 'S' is for Search and if you look at an enterprise like Intel or GE and if you consider all the data objects - structured & unstructured, it comes to over 10 billion items. If you begin to tag them, index them and if you are able to search then it becomes a very powerful knowledge base inside the company. 'L' is links. A firm is nothing but a network of people and if you can turn this network into a social graph much the same way Facebook or Yahoo 360 then it becomes very valuable. It gives you answers to who are the people you want to reach and how. You can accelerate the whole process if only you can capture the social graph in a way that is meaningful to employees.

'A' is authoring - blogs and wikis inside the firm, which has become pervasive. 'T' is tagging, social tagging. You find something interesting on the intranet, Internet and you begin to do social tagging. This is another way of getting access to shared knowledge. In 'E' you have extensions and those applications that you can put on top of all this meta data. With SLATE, you don't have to go back, reach out for the information and do a search but it comes to you when there is something new out there. This is a model that has taken hold around Enterprise 2.0. This of course has implications about what it will do both at the industry level and the firm level.

Audience: Are Web 2.0 capabilities more relevant in a B2C or B2B type environment?

Jason Kalich: They are relevant in both environments. We also see a blend of B2B and B2C where even in B2C, the B2C companies have B2B relationships to establish them. Hence harnessing all the information - be it supply information or where you can have RFID-based capabilities that are providing events - they can be consumed and made relevant for business decision makers to act on them. The ability to gather that information to run that information and act on it is equally relevant. Additionally, if you look at B2C arenas for companies like amazon.com, consumers are participating in not only in the B2B relationships but also the B2C relationships. Consumers are able to answer questions that help make business decisions in B2B. They are also able to make rankings based on the B2C information. Inside Microsoft, we have a similar emerging of B2C and B2B capabilities. But depending on how you look at B2B and B2C, certain service-based capabilities, social-based capabilities, event-based capabilities are relevant to both.

Steve Devlin: Web 2.0 capabilities are relevant to both. Our business models still have a little B2B though we are investing and innovating quite a lot around B2C. In a business environment, people are expecting to use systems internally in the same way they use the web for their personal purposes. In my case, the partners that we interact within the music industry - be it artist managers, journalists - are expecting ease of use that they get on the web. A lot of innovation that we are seeing is loosely called Web 2.0.

Sharad Sharma: Here's a divergent view. There was an old notion of a firm, a standalone one, which provided value to its customers, you can think of it as a network of employees. Then came a firm, which said "I'm not alone, I need an ecosystem to support me." Microsoft is a classic example of that. Its success is directly attributable to the whole ecosystem that it creates. These are the private networks that have existed and created huge value. What is happening now is you are going to open networks and create a situation where people have the power to collaborate without an anchoring in place to make that collaboration meaningful and successful. Wikipedia, Linux are classic examples of this. Who does it empower? It empowers the C - if the C is a customer not merely a consumer than it does the B - the business. Therefore there is a significant threat to firms which are based on private networks and they are already feeling the heat.

Audience (Umesh): I represent a consulting firm based in Paris, France. We offer advice to European companies to offshore outsource from India. Of the whole gamut of services being counted as Web 2.0, Enterprise 2.0, which are the three prominent services that you would bet on? Two of three prominent services are social networks and media services. If you were to invest hundreds of euros/dollars/ rupees on something, what percentage will you attribute to Web 2.0 services?

Jason Kalich: The top three things I'd invest in:

• Enabling social network capabilities to pull that information from customers, partners, etc. into the firm to understand what's going on.
• Publishing and development tools-based capabilities. The ability for those customers, partners to participate in that ecosystem and not just be mute spectators.
• I look at kind of the mash up these capabilities environmental investments that allow customers to assemble their view into what they want to be doing. In terms of investments, it is a difficult question.

The kind of industry and business you are in makes a huge difference. In technology investment, it is clear that people are investing in online service-based capabilities, self service-based capabilities and that's the trend. But if you are in the healthcare industry, it could very well be privacy, compliance, etc. So in the Web 2.0 world, for Microsoft it's certainly the service enabling the investments that we have.

Steve Devlin: I would avoid putting money into social networks sites themselves. Extracting value from a social network is going to become increasingly difficult and evaluation (in Facebook and MySpace) is quite ridiculous. It's interesting because I'm looking at them as an industry that doesn't own their content. At the end of it we can always fall back on the fact that we own our content and therefore we can control access to it. This has its own difficulties when you are in a world where you don't control content. You have to be very careful how you extract value from the people who are putting the content in.

Some market places, like eBay get more value the bigger they get. Bigger ecosystem is better because the market is bigger, there's liquidity and that's a very hard thing to move against. eBay is able to extract quite a lot of value from those transactions. And there's a lot of stickiness. Social networks are very subtle, they are not necessarily better when they're bigger. There is a ceiling and in social networks they are as much about the exclusion as inclusion. In the long-term, social networks will become like pubs/clubs-some places will last a long time because they are exclusive and are well run. The others will have a period of boom, everyone will enjoy the place for about 6 or 12 months, but soon the place will be shut or taken over.

Sukamal Banerjee: Is social networking a vogue and may not last long?

Sharad Sharma: I would liken social networking to what comes with presence. Initially presence came only with messenger; today presence is integrated in a number of applications. You go to your address book on the intranet and very often you'll see something that says whether the person is online or not. It is integrated increasingly into your phone if you carry a blackberry. It is going to become pervasive. It is not going to be tied to the one application called IM and eventually social networking is going to be the same thing - about you being able to manage, manipulate and use your social graph, which already exists in your address book, messenger, or Yahoo groups. Overtime instead of this being nebulous in all places it would become much more explicit. You will begin to use that social graph to simplify access to information.

Sukamal Banerjee: On the enterprise side of things, are there any examples or suggestions that you experienced? Have you adopted any of these technologies within the enterprise?

Audience: There is apprehension on taking on another buzz word in the IT community. Personally, I've not been on social networks, my social network is to go to a bar and associate with people. How do you see Web 2.0 and its role in the extended enterprise? Creating value for organizations, creating a social network is fine, but how do you actually get significant profit out of adopting it?

Steve Devlin: The start of Web 2.0 is like a bucket of things. Social networking or generating content has much applicability within the enterprise since enterprises are about communities; we form communities every day without being very public about it. It's in little things like the meetings you have every weekend and the e-mail groups that you have and we are all starting to see this in corporate intranets. We are starting to include a little bit more of that rich content and the concept of pod casting or blogging can make an enterprise a bit more fun. If you look in the Web 2.0 bucket again, rich Internet applications are interesting because in the last eighteen months I have seen, for the first time, proper rich applications being developed in my industry that can replace client server apps. I see this as a great way to deploy systems and drive down support costs. SOA is where we are going to play a part in that but in my experience a little bit like the object orientation bubble; there is an awful lot of hype in marketing.

Audience: I'm an ex-CIO, now retired. We are probably the wrong people to discuss Web 2.0. There's some work being done in Australia with generation Y. I don't think there is any generation Y here. Generation Y are just around the corner as our customers and our employees and these folks have a completely different way of using technology, of communicating, of Facebook and I think MySpace is now dead. I don't think that they actually recognized this. What we've got to provide to them is a challenging career in our future companies and as our future customers. If you have a few generation Y's to put it to you the debate about what Web 2.0 it will be completely different. Our jaws would drop because I had those conversations with groups of generation Y.

Jason Kalich: If you think about social networking sites not the ones that exist right now to do the business that you do. You have partners that you work with, employees and all those who provide information drive the value. Imagine the ability to collaborate both digitally and be able interact digitally. It is really about building your social network by digital means and using the information to add increased value in your business. These technologies are relevant, as we move forward because the customers and partners will be in charge of that information. Those customers and partners are changing, they are evolving very rapidly and I assert that if you do not have that network established, you can be passed by.

Sharad Sharma: At one level I will completely agree with you, at another level I do not. I think, it is transformational, you bet it is. Is it going to change the way business is done? Is it going to change the way people assemble and manage their life? You bet it will. Is it about technology? It is not. I go back and draw the best parallel that I can think of. Back in the late 80s if you were a chip designer, you needed a billion dollar foundry or you could not do chip design. Then came this concept of "merchant foundry", your foundry that just does manufacturing of chips and then I do not need a billion dollars to be a chip designer. Now the proliferation that has taken place in custom chips has been enormous.

Is it about technology? Of course at one level it is, but it is more of a business transformation that has taken place. Today you can be a Youtube without investing a single cent in the data centre, because you can go to Amazon S3 and use their data centre on a pay-as-you-go basis. Early adopters are going to be the young guys because they are not stuck in the legacy applications at all. They have this freedom to build small little applications on top of this infrastructure. The networking site of last year was MySpace, a year earlier it was Friendster and if you go a year or two from now there will be another for the reason mentioned that bigger the site becomes, the less the intimacy, and the whole notion of being on that site goes away. Diseconomies are inherent in a social networking site, managing your social graph will remain.

Sukamal Banerjee: How does technology get adopted in the enterprise? What are some of the business benefits that we can foresee from using these?

Sharad Sharma: I think this is not a technology led revolution. It is technology intensive. To me there is a transformational change that is taking place in the enterprise, which is empowering the employee in a way that has never happened before. Now, technology is a means to an end and that transformation is enabled by technology. Adoption will happen around this new paradigm that the firms are not going to be hierarchical but a network of employees, a network of firms, network of hubs and this network paradigm will take hold. The fact is there is a democratization that is taking place inside the firm and in the value chain and technologies that enable that will thrive. You know, SOA it is a faddish term that will come and go, to me this is not about SOA, this is about the business and social transformation that is taking place and small enabling technologies facilitate that. Social networking is but one of them. Authoring, co-authoring and blogging are others.

IBM at one time had software literally free and hardware proprietary. Came Microsoft, they said hardware is a commodity and software proprietary. Then came Yahoo and Google who said, software is essentially free or open, metadata is proprietary. The next generation firm may say even metadata is open and something else is proprietary. The real bet I will make is "you know, can I open up this metadata," because that is where the world is going to go. It is about taking that metadata which is social graphs and indexing all the content that you have in the enterprise, it is about user generated content and its tags taking that and making it open so that the value that is inherent in that becomes more available to everybody else.

Jason Kalich: I think it is relevance and ease of use. You try to get the information you need to make decisions, to have fun, to do the things that you want to do. Web 2.0 technologies are about making that information that is vast more relevant to you. Its not about the platform, it is not about the metadata in my opinion, it is about the relevance of the information. People are voting with their clicks and that has changed the entire paradigm of the way people interact.

How is that relevant in the enterprise? As the CIO, as the CTO, often you have to scramble to get the various bits of information across your ecosystem. I agree that SOA is not a panacea, but how you can collect all of that information, synthesize it, leverage your social peers, friends, employees, partners, co-workers. To make it more relevant, make the technology and information more relevant to you.

Sukamal Banerjee: Steve can we get to some specific examples, like increasing a personnel productivity and change the way we do business. How is it being done in your industry?

Steve Devlin: If we take a particular technology and see how it is going to affect everyone in this room. We are always going to get it wrong with 90% of the people. Knowledge management was the big buzzword with consultancies convincing companies they needed to invest a lot on knowledge management. In fact, it only marginally impacted companies. An interesting paradox is the consultancy model, a lot of the social networking technology that we are talking about is incredibly relevant when your are a company that is large for keeping in touch with friends and gaining domain expertise from communities. It helps service type organizations. But, if you are working in a single site with 500 people and your job is to make tractors, social networking is not going to transform your business. The more relevant thing is opening up our systems to other people.

Sharad Sharma: Humbly may I present an alternate perspective, I want to ask you how many of you can send me an SMS from your mobile phone. Nobody! How many of you think, that you nephew, nieces, children, who are teenagers can do that? Almost all of them! My father who never changed a light bulb had to embrace e-mail because both his children were in the US. Imagine how intimidating e-mail would have been for him. This is the real world and I feel this is a change.

I think we ignore the seminal shifts that are taking place, the fact is, things change. You look back ten years AT&T came here to set up the R&D Centre in India. We had a partner working for us and that is Infosys. We made bid for Infosys for $21 million, which was turned down. In December 1993, they were valued at $21 million. Today they are valued at 30-35 billion dollars. Things have changed enormously. Fast forward thirteen years and you will we see a similar change. We are in the midst of a significant management and a consumer revolution that is not driven by technology alone, but it is driven by forces larger than that. And I think things will be very different as we move forwards.

Sukamal Banerjee: Within your enterprises, have you the actual usage of these technologies and is it bringing any returns the way you look at them best?

Audience: I am Mark, we are in the gaming market which is a big essential tech market at the moment. How would you look at the future in terms of the gaming, generation Y, and the market?

Steve Devlin: Firstly, when you say gaming, you mean gaming in a gambling sense, like card games for money or do you mean gaming electronic arts and role playing?

Audience: The Second one.

Steve Devlin: I am not sure, but I think it's a very interesting market because of a lot of parallels with the music industry. Its very capital intensive, yet I think one thing is inevitably going to come their way is that today they have locked down games very successfully so its quite hard to pirate games still. I think it is an inevitable challenge that we have where the DRM essentially gets broken ultimately and therefore your content is free on the Internet. Then you need to think of other ways of adding value to those consumers if all you are doing is offering them the game for a price and they can get it somewhere else for nothing.

Jason Kalich: At Microsoft, we see the gaming industry as a great example of the Web 2.0 space. If you look at the games we have right now, games just are not cartridge based, played locally. Games are played locally and connected to users all over the world and interactively engaged upon via voice texting etc. In addition to that game rating happens via social networking and game scoring in terms of ranking individual players worldwide etc. is an interesting example where the game as a platform now reaches billions of people. So as an emerging platform, gaming has become pretty substantial investment on the Home Entertainment Division of Microsoft and it is a great example where Web 2.0, modern technologies are coming to circle itself around those Generation Y folks.

Its a really dynamic environment that is happening right now with modern technologies, like the live spaces for X-Box and some of the modern visualization capabilities of Web 2.0 which give a cooler experience that is important to the next generation.

Sukamal Banerjee: It is a very, very nebulous and vast topic for us to get to any kind of conclusion. The idea was to kind of lay it out and get a perspective from our distinguished panelists.

Audience: Rajneesh: It is really good to see Microsoft and Yahoo on the stage, Google would have been good too. We talk about Web 2.0 with collaboration as a common theme, so what is Yahoo and Microsoft collaborating together to make it easier for the consumers?

Jason Kalich: That is a great question. I think I will be honest in just say I do not think we are doing enough. Today collaboration for the information that users have happens at the user. The truth is that the users use Yahoo, Microsoft, and any other palate of technologies for the information that they need. We can do more in terms of driving standards that allow that to be easier for the users, and we can also do more to provide joint capabilities.

If you chose to move your e-mail information, based on standards, how can that be easy for you? If we choose to create standards for syndication, how do we make that easier for you? So you can assemble the information that you want. But I think the honest answer is, we are not doing enough outside the standards.

Sharad Sharma: One specific example on high end where Yahoo and Microsoft can operate is on buddy list of the two systems. There are opportunities for collaboration in metadata space so that people will begin to integrate that across the network. Users will have a competitive advantage over somebody who says this is mine, I own it and I will give it to you when you want to use it and so that's the next battle that is going to shape up and that is where the company DNAs will come into play.