How Web 2.0 will change the face of business…

in FT.com

Technology research company Forrester predicts that by 2013, social software, the application of Web 2.0 for the enterprise, will grow at an annual rate of 43 per cent per year. This is quickly becoming the fastest growing sector in the enterprise software industry. However, many people are confused by what Web 2.0 is and its significance in the workplace and in culture, including those planning to adopt it.

Web 2.0 is best explained by defining the technologies that make it up. A collection of brands provide the metaphors for what is different in the way we use new web technologies – Google for search, YouTube for video, Flickr for photos, MySpace and Facebook for social networking and Wikipedia for wikis. These brands as metaphors become the nouns and verbs of describing Web 2.0 as a new way of socialising, communicating and sharing with each other in huge consumer-scale markets.

This is not so much a revolution in technology, more how people use technology and interact with each other as a result. The amazing technological innovations have really been happening behind the scenes with the huge build out of inter-networking and creation of new scalability technologies through open source. The open source sharing of code used to build these sites have made it possible to build and manage sites on a modest budget and deliver new content and services to anyone. This has allowed a whole new class of people to use technology that they would not previously have had access to. Consequently, websites reacted and evolved rapidly to adapt to these new users and realised that computers could be used as a medium of expression, sharing and revelation.

Users voted with their mouse for sites that appealed to their personal sense of expression. Sites that imposed constraints were quickly discarded. The ones that allowed individuals to write, edit or tag rose quickly up the internet charts of popularity. Web 2.0 became a democratic revolution with core principles of freedom of speech and freedom of assembly on the internet.

Social networking sites allow everyone to become a contributor by simply creating their home page and being compelled to enhance or adorn it in response to friends doing the same thing. Many large corporations that have skills or profile pages for their users, but even senior executives may be more likely to update their Facebook or LinkedIn profiles than corporate skills page.

Michael Lynch, CEO of Autonomy, suggested in these pages that Web 2.0 was something that needed to be tamed. Perhaps this is missing the point. Web 2.0 is not anarchic, nor is it necessarily bad for business. To try to control Web 2.0 is like trying to put one’s finger in the dyke. It is happening and there is nothing that business can do to prevent it. When companies try to restrict access, they either find that the roadblocks have been circumscribed or that potential employees go elsewhere.

Generation Y, the generation born between 1978 and now, has only known the empowerment of the internet and has become accustomed to have their vote counted. To try and control it can only disenfranchise them. To empower them yields an optimistic workforce, with conversation between stakeholders in enlightened collaboration. In addition, my generation, the Baby Boomers, are starting to retire, taking with them some of the most valuable knowledge ever accumulated. Knowledge management programs over the last two decades have failed to capture that knowledge, is Web 2.0 the last hope of retaining it?

Enterprise software vendors will get there, but only with coaxing and coaching of a new generation. Eventually they will figure out that Web 2.0 is not simply about collaboration features and interactive web technologies, but empowerment of their users and the ability to draw in a critical mass of users from outside the trusted circle.

Obviously care should be taken in what is opened up. However, rather than treating Web 2.0 content suspiciously, corporations should ring fence the information that must be controlled and open up the rest to participation. At the Enterprise 2.0 conference in June, Pfizer presented on how they were using open source technology to enable Web 2.0 collaboration. This is a brave move in the highly regulated world of pharmaceuticals, but they have clear boundaries in terms of what content needs to be regulated. They have created a vision and a reality that uses the same technology as Wikipedia to create Pfizerpedia, a wiki of process and ideas that feed into the main areas of research and manufacturing.

Change in the enterprise is likely to come from outside as well. If you are an information worker, you use Google more than any of your internal systems. These websites will set further expectations on the internal systems you use and a requirement to integrate information with these external sources of information. Web 2.0 has an answer for this with an integration technique known as “mash up”, the ability to mix information from multiple sources using the web browser itself as a point of integration. These external sources of information provide something that our internal information systems could never provide – a critical mass of opinion utilising the so-called “Wisdom of the Crowds”.

The most profound effect Web 2.0 will have is on the way we do business rather than just the technology we use. Employees will use this freedom of speech to provide valuable feedback to the business. Customers will become part of the decision-making process and allow us to design the most imaginative products and services.

As with any opportunity, there lies risk, and embracing Web 2.0 is not without its risks. However, smart businesses can already see the opportunities and are willing to take those risks.

John Newton is chief technology officer at Alfresco

Read more