Web 2.0 Takes Another Step Forward

Web 2.0 is seen by Tim O’Reilly and other advocates as a fundamental shift toward a more flexible, open, and participatory model for how the Web can reduce costs, enhance adaptability and create new business opportunities. Others see Web 2.0 as mostly hype of the technology and dismiss the social effects as overblown.
Market analyst powerhouse Gartner recently came out strongly behind Web 2.0, which we and others see as another step toward the Web 2.0 vision. While Gartner expects the majority of Global 1000 companies to adopt some technology-related aspects of Web 2.0 by 2008, companies will be much slower to adopt the social dimensions of Web 2.0. Consequently, the benefits of Web 2.0 will slowly filter into most businesses, and the overall impact of Web 2.0 will be more gradual. Of course, this also means that innovative businesses have an opportunity to build a strong advantage versus the current incumbents by embracing innovative business models and reaping the benefits of lower development and deployment costs under Web 2.0.
Quoting Gartner Fellow David Mitchell Smith,

“While it is straightforward to add specific technologies, such as Ajax or RSS to products, platforms and applications, it is more difficult to add a social dimension. Adding these new aspects requires rethinking the design of the system and possibly its target audience. It is therefore more challenging than a cosmetic makeover to the application via Ajax, because it can imply significant changes to the development process, business model and perhaps even the mission of the system under construction.”

He goes on to break down the broad impact of Web 2.0 into three key areas: technology, people and business.

  • The technology side of Web 2.0’s is characterized by technologies such as AJAX and composite applications, better known as “mash-ups.”
  • Web 2.0 draws people into a participatory approach were users are both consumers and creators sharing collective intelligence. As the number of participants and types of collaborative models continues to grow, power will increasingly shift to the consumer, forcing businesses to proactively market to and analyze community influencers. If you don?t believe this, look at the influence of consumer reviews on Amazon.com or ask Ran Rather or Trent Lott.
  • The Web’s business processes will fundamentally shift how businesses deliver value and is characterized by an open and extensible ecosystem that both relies on and empowers third parties. Open source software, Google’s AdSense, and revenue sharing are all examples of some of the changes coming. Web business models will enable nimble new competitors to succeed and challenge established enterprises to adapt or fade away.

For those that are following Web 2.0, Gartner does not say anything shocking or controversial. However, it is very important that Gartner (i.e. the IT establishment) is saying what they are saying. The real benefits from Web 2.0 will not materialize until the people and business aspects gain wider adoption. Adopting the tools and technology of Web 2.0 is, comparatively speaking, the easy part, but every day–ok, most days–we move a little closer. In the meantime, if you are part of a large organization, don’t think you have nailed Web 2.0 because your Web strategy includes AJAX, open source and RSS feeds. Don’t think that Gartner’s forecast of gradual adoption means you don’t need to be thinking about the people and business elements of Web 2.0. In the longer term, you need to worry about not what the guy down the hall thinks, but about the gleam in the eye of some entrepreneur scoping out “your” market.

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