No longer the sole preserve of savvy teenagers, Web 2.0 can now offer genuine business benefits, but how can the channel help customers to understand its potential and make it work for them? Danny Bradbury looks at the options for resellers to get involved
Web 2.0 was traditionally the playground of the stimulatorially challenged. If a night in front of the telly or the quiet attractions of a good book simply weren't cutting it for you, you could always surf over to YouTube and watch a video of a dog walking on a tightrope. For the terminally distracted net generation, entertainment nirvana had arrived. But who would have thought that within only a couple of years, the decade's most overhyped consumer plaything would begin to take on significant business meaning?
Web 2.0 isn't a trend so much as a collection of loosely strung together ideas. Underpinning it, however, is the idea that people have a strong desire to share things, whether that be video, audio or text. The overwhelming success of sites such as MySpace and Facebook prove the net effect; the idea that the value of a network is equal to the square of the number of nodes attached to it. A network's value grows exponentially as more people join it, and the internet is the biggest network of all.
Consumer-focused sites have capitalised on this, racing each other to acquire users, and eventually reaching the tipping point, where the membership begins to snowball, growing through its own momentum. This is why young college dropouts (for example, Mark Zuckerberg) can become chief executives of new companies (Facebook) valued in the billions by old ones (Microsoft), and sending a chill down the spines of others (Google).
Evolution of technology
This sharing of information happened because web technology evolved to the point where doing so was easy. Individuals no longer needed to be HTML geeks to share their experiences with the world at large or to have the world discuss them. And it was the potential for discussion that formed the other strut of Web 2.0 -- the idea that people could come together and thrash out ideas in a kind of digitised dialectic.
Not that you'll see much Socratic logic in YouTube postings along the lines of "LOL nice dog on tightrope video. LMAO!". But the hope is that Web 2.0, when applied to a more focused and intelligent user base, could generate significant benefits. For every hundred inane user comments and movie trivia competition invitations from the world's Facebook users, there is a well-considered, intelligent addition to Wikipedia. That's the part of Web 2.0 that businesses should be interested in. The question is, how can they make the concept work for them and how can resellers assist?
There are some simple, mundane ways in which the channel can capitalise on Web 2.0, argues Adriana Cronin-Lukas, founder of Web 2.0 marketing consultancy The Big Blog Company. The most obvious and least sophisticated way is to find those businesses offering Web 2.0 services to a broad customer base and flog them lots of equipment. After all, all those dog-on-a-tightrope videos have to be stored somewhere.
The other obvious move is to begin selling the equipment into companies that want to use Web 2.0 concepts internally.
"You could sell them the special servers, for example, and say that this will take the scale of Web 2.0," she explains. This also applies to the infrastructural products designed to support Web 2.0 environments. Cisco sells switching products designed to handle multimedia. Network management appliances are also being remarketed with a Web 2.0 angle, and Sonoa even has an appliance designed to enable non-technical users to build their own Web 2.0 applications.
Most of the software required for Web 2.0 is based on open source. WordPress, the popular blogging system, is simply a collection of PHP scripts that can run directly on an Apache Web server using MySQL, which in turn can hum away happily on a Linux operating system. Bundle it all onto a suitably specced, rack-mounted PC, and there's your appliance. SpikeSource has done exactly that with its
Intel-powered SuiteTwo 'Enterprise 2.0' appliance, which lets companies publish RSS feeds and host wikis. With these products, the 'Web 2.0 in a box' sales pitch will pretty much write itself.
Lack of understanding
But will companies listen? One of the tricky things about Web 2.0 is that, being a relatively nascent concept, a lot of companies don't fully understand what to do with it.
That will change, however, according to IDC analyst Joel Martin. He compares current Web 2.0 practices with old school knowledge management systems, and finds them a dramatic improvement.
"In 2008, Web 2.0 will replace knowledge management systems," he says, adding that social networks and related technologies are becoming important strategic components for companies such as IBM and Microsoft. Using fluid tools that let people enter and tag information as they see fit, rather than imposing rigid categorisation and data entry rules, makes people want to input that data. They feel as if they own the information.
"Rather than trying to constrain knowledge around structured data in the business, they're opening it up to the innovation of their employees, their partners and maybe even their customers," says Martin.
Resellers playing in the Web 2.0 space should not live on hardware margins and software licence sales alone. For one thing, there's always a chance that providers of Web 2.0 software could simply bypass the channel altogether. Depending on how much a customer values security or wants to customise a system, they could quite easily begin using web-based services without installing anything at all behind the firewall, points out Bob Tarzey, a service director at market analyst Quocirca.
"It's easy for the originators of the online applications to sell them directly, not because they don't value the channel, but because it's easier to do," he says. "A challenge for resellers is how they get a slice of that."
However, even those companies that do need to use the system internally are likely to want guidance. Resellers can emphasise the benefits of 'crowd sourcing' from a base of employees, and potentially customers and suppliers. Crowd sourcing matured with projects such as Wikipedia, which relies on the value of input from lots of different people -- the whole is more than the sum of the parts. Applying models like Wikipedia's to domain specific areas inside businesses can yield interesting results.
We can already see some examples of how this could work. Barry Horowitz, professor of systems and information engineering at the University of Virginia, likes the idea of collaborative web tools as a way of marshalling input from multiple stakeholders in broad-reaching security projects.
"One thing we're doing is organising applications that help to inform decision making related to cyber security," he says.
Security in large companies is notoriously difficult to manage. They have to be assessed, assumptions made, and values attached to them. Then, and only then, can a security strategy be developed that is based on some form of intelligent plan. Companies that don't gather and analyse this information are essentially whistling in the dark. Bringing all the stakeholders involved in those decisions into one room is very difficult, Horowitz acknowledges, but collaborative web technology can help to solve the problem. "You can use those tools to substantially change the rate at which you aggregate knowledge."
As Web 2.0 levels the interoperability playing field, reseller consulting services are likely to take different forms than they have in the past. Historically, the phrase 'open computing' was an oxymoron. Getting computers to talk to each other across a network was a big enough achievement in itself, and was accomplished almost entirely by the ubiquitous adoption of the internet protocol during the 1990s. However, getting applications to talk to each other was a challenge that generated huge amounts of frustration (and sucked up huge amounts of cash).
The introduction of XML at the start of this decade changed the picture dramatically. The language is essentially the Esperanto of the computing world (although thankfully more ubiquitous). It is also the basis for the interoperability that underpins the Web 2.0 concept. Companies that rely on users to contribute the data that makes their services attractive are becoming increasingly bound to make that data available via application programmable interfaces (APIs). Web 2.0 relies on a sense of ownership -- users must own the data that they enter. For that to happen, they must be able to retrieve it from the system that they put it into, and take it elsewhere.
This is why the concept of Web 2.0, predicated as it is on the idea of crowd sourcing and information sharing, is inherently bound up with loftier business-focused technology topics such as Web services and service-oriented architectures. Mash-ups -- applications built from bolted-together data feeds -- represent a facet of Web 2.0 technology that is easier to sell to corporate IT departments than SOA, which is generally a large-scale, cash-consuming endeavour.
Resellers who can market mash-ups effectively to clients stand to benefit from a mixture of hardware, software, consulting and software development revenues. The complexity in such software interoperability is still high enough that the margins can be attractive.
"Making a business process work that might span multiple organisations, span quite a few applications and have human workflow embedded in it is quite a complex process," points out Tarzey.
So, resellers that want to make money from Web 2.0 have a promising set of options to help wrangle more budget out of their customer accounts. But selling a mixture of kit and consultancy to customers is a pretty mundane approach to the problem, says Cronin-Lukas. "These methods make money because Web 2.0 exists, but they are not exactly making money with it in the most direct sense," she explains.
Instead of simply making money by selling Web 2.0 to other people, resellers would do well to eat their own dog food and use the technology themselves. But how?
"Engage with your customers in conversations, by using blogging and other technologies, to build relationships," Cronin-Lukas says. As an example, she asks readers to Google 'Cisco 3750 performance'. "You will find an article by Simon Bullen, where he takes apart the myths of Cisco invincibility for price performance on one of its bread and butter network switches," she says. "That is one of the things that resellers need to watch. The stuff that they are trying to push may be rubbished by the community, and their sales will fall. This will surprise them."
Resellers can approach Web 2.0 as a relationship management tool with varying degrees of sophistication. On the one hand, they can simply reply to blog posts. Others investing more time and energy in the concept might host their own blogs and use them as a forum for customer discussion. Still others may expand that approach into wikis, for example, which could be used as customer-facing knowledge management systems, to help gather and distribute information on product features, flaws and workarounds.
Tarzey has further ideas about how resellers could use Web 2.0 further up the supply chain. Partner relationship management (PRM) is becoming an industry buzzword. Distinct from CRM, PRM focuses on channel management. Companies such as Salesforce.com are moving into this area in a big way, as a means of helping vendors to interact with their channels, receiving information about current performance and distributing leads to partners, while also helping to avoid channel conflict. Tarzey says distributors could look at tools such as this to help co-ordinate their resellers' activities.
The Web 2.0 concept has grown into something significant for consumers in a very short time. While businesses attempt to grapple with it, both as a means of refining internal efficiencies and communicating more effectively with customers, resellers have an opportunity to present themselves as experts in this field and guide them through both the technological and the organisational challenges involved in making it work.
Cronin-Lukas isn't sure she likes the term Web 2.0 at all. The concept is still young enough that people need some form of moniker to hang it on, she says, but in the long term, it will pervade most of our online activities and cease to be a discrete concept, viewed as a subset of online technologies. Those resellers taking an interest in this as a business tool now are getting in on the ground floor.
This was first published in February 2008