2006 prediction #2: consumerization comes in most unexpected areas

Gartner has recently published some research on how consumer technologies fuel innovation. Former META (which has been acquired by Gartner last year) CEO Dale Kutnick for instance has published a podcast on the power shift resulting from consumerization. Consumerization is everywhere! Web 2.0 is just a container term for all kinds of innovations / concepts / technologies that are a result of this consumerization. Very often the results are very surprising, and the idea of mashup even adds to these surprises. Major innovation does not only come from R&D departments of large organizations (either commercial or academic), but also from clever and unexpected usage from consumers. By combining (this is what mashup is about!) concepts and technologies new tools, concepts and technologies evolve.

Take this article (in Dutch) in a major Dutch newspaper for instance, about how the Nintendo Gameboy can be used to increase the engine power of scooters. It writes about how some clevers kids and mechanics found out, that with a Nintendo Gameboy you can easily read and manipulate the software and chips inside scooters. This makes it possible to erase the speed limitation which is set within the software, so that scooters can go way faster than the legally allowed 50 km/hour (in fact they can go as fast as 90 km/hour).
That's not all: not only kids and mechanics are taking advantage of this, but it has also gained the attention of scooter manufacturers, who are now developing and selling special cartridges for the Gameboy to read the scooter's technical data. They also provide special cables to attach the Gameboy to the scooter.

The above Gameboy anecdote is just an example to show how consumerization works, and that the results of the evolution can be found in the most unexpected areas. So this is my second prediction for 2006: we will see that consumerization will continue to drive innovation, and the results will be very surprising.

Is Web 2.0 amoral?

Nicholas Carr has written a quite influential piece on Web 2.0, already back in October 2005. The article is titled "The amorality of Web 2.0", and Nicholas saves the beef of his article for the last part. His point is the following (please read the full article too, it's well worth it!):

The Internet is changing the economics of creative work - or, to put it more broadly, the economics of culture - and it's doing it in a way that may well restrict rather than expand our choices. Wikipedia might be a pale shadow of the Britannica, but because it's created by amateurs rather than professionals, it's free. And free trumps quality all the time. So what happens to those poor saps who write encyclopedias for a living? They wither and die. The same thing happens when blogs and other free on-line content go up against old-fashioned newspapers and magazines. Of course the mainstream media sees the blogosphere as a competitor. It is a competitor. And, given the economics of the competition, it may well turn out to be a superior competitor. The layoffs we've recently seen at major newspapers may just be the beginning, and those layoffs should be cause not for self-satisfied snickering but for despair. Implicit in the ecstatic visions of Web 2.0 is the hegemony of the amateur. I for one can't imagine anything more frightening.

In "We Are the Web," Kelly writes that "because of the ease of creation and dissemination, online culture is *the* culture." I hope he's wrong, but I fear he's right - or will come to be right.

This last part of his point, is what sociologists call cultural generalization. This is one of the aspects of modernization or modernism, along with structural differentiation (a long-winded way of saying that the world around is is becoming more complex). Sociologists have been writing about this modernization process for decades, and from the works of Marx, Weber, heck even Ritzer (author of the bestseller The McDonaldization of Society), we can only conclude that modernization and its consequences are inevitable. Considered from this view point, it is safe to say that Web 2.0 does not cause this cultural generalization, but only accelerates it. So is Web 2.0 amoral? Nah, not more than other forces driving modernization.

Movie stars and SOA

This morning I read on the sys-con website that in the Harrison Ford movie "Firewall" the main character is a security expert who reads SOA/Web Services Journal. As sys-con proudly writes on their web site:

In "Firewall" SOA Web Services Journal is Jack Stanfield's favorite trade magazine where you see Harrison Ford reading the magazine in one scene and on the coffee table in his office, in two other scenes.
SYS-CON Media granted permission to Warner Brothers approximately one year ago for the studio to have Harrison Ford's character to appear with the magazine in the movie.
"Firewall" will open in movie theaters on February 10, 2006.

Two questions for all of you:

1. Do security experts really read Web Services Journal (WSJ) from a professional point of view, or just for fun / leisure. I like WSJ, but quite frankly to me it is not famous for its articles on security.
2. Can anyone confirm that Harrison is reading the issue which has my article on BizTalk 2004 in it? That would be quite something for me and a great start of 2006, knowing that Indiana Jones had a look at my BizTalk decision tree ;-).

2006 prediction #1: web service standards

Back in September I wrote that web services appeared to move away from WS-* protocols and standards. Looking back now I was partly right. It is certainly so that, especially with the emergence of Ajax and Web 2.0 in the second half of 2005, other non WS-* protocols have gained attention and are used more widely. In fact, both Ajax and Web 2.0 rely more on POX (Plain Old XML) and REST, than on WS-Security, WS-Transaction or WS-I and the like. What will further happen with web service protocols and standards in 2006?

The WS-* and more lightweight standards like POX, REST and Ajax will peacefully co-exist. As being part of an SOA and featuring heavily in the attempts by major vendors to improve their SOBA's and make them future-proof, we will need a robust framework for web services. The further elaboration of the WS-* stack can provide this, so for inter-application, inter-organization and any other service-oriented application, the WS-* will still be the best pick.
However, for services that are primarily user-centric, the best pick will be REST/POX/Ajax. Use these technologies for presenting the information that is being processed using protocols and standards from the WS-* stack.

My prediction is that both the WS-* stack and its lightweight counterpart will continue to evolve and mature, and that we will learn that these are not rival standards, but rather complementary standards that will feature heavily in organizations pursuing SOA / Web 2.0 success. Whether we like it or not, Ajax and Web 2.0 concepts are here to stay, and they provide an attractive alternative for presentation functions for which WS-* is over-bloated.

My second prediction is that the WS-* stack will be start to be consolidated in 2006, and the numbers of standards for web services will rather decrease, than increase. New joint efforts from vendors and standard bodies will be started to unify competing standards. Also, standards that overlap heavily, will be slammed together to increase the simplicity of the WS-* protocols.
Still the golden rule for WS-* standards applies: use SDKs and generators as much as possible, and do not go about adopting and implementing all WS-* standards out there. Do not even attempt to grasp all of them.

Being average is NOT good

Two things I found out the last weeks, have convinced me that being average is NOT a good thing for IT organizations. The first was a good piece of research by CSC, which I found by browsing Christopher Koch's blog of CIO Magazine. The research stated that companies that spend according to the average in their industry are the worst performers. Furthermore, CSC found that companies that spend much less than the average are three times more successful than those in the middle. And companies that spend much more than the average are six times more successful. How about that! I have done some benchmarks, and most of the time our client wanted to be at least average, and the first question that arises when you present the numbers is: "how are we doing compared to the others?".

The second thing I found was the distribution of CMMI certification. The Software Engineering Institute (SEI), inventor and owner of CMMI certification, published figures on appraisal results every 6 months. The september 2005 version provided some interesting and surprising results, as it showed that more than half of organizations that requested appraisal, are level 3 or above. This could suggest that level 3 is average for the industry, but I can guarantee from experience that this is definately not the case, I think the average will be at most level 2. In an earlier post I already wrote that CMMI certification can be approached in different ways, but what the figures show I think, is that organizations that generally already have a more mature process, are more eager to go for formal appraisal, than organzations who are just getting started with their process. Our own figures indicate that the distribution of CMMI levels are:

• Level 1: 50-60%
• Level 2: 25-30%
• Level 3: 10-15%
• Level 4+: <5%

Earlier I already wrote that measurement data should always be interpreted within the context in which the data was collected. This is especially the case for CMMI certification. But also, the results from the CSC research show that you should never go for average, as first of all the does not make you stand out compared to your peers, and second of all, it may indicate that you are not doing as well as you think you might. So one good plan for 2006: not being average!

Ryanair: test case for Web 2.0 business model

Last week the statement by Michael O'Leary of Ryaniar, saying that within 5 years airlines will offer free flights, as revenue will come from passengers gambling while on the plane, was breaking news on some web logs and web sites (yeah I am late again with this story).
O'Leary (it remains unclear whether he had too much Guiness when making his statement) said that introducing lottery scratch cards had shown that passengers were bored and looking for entertainment. O'Leary further believes that "entertainment is where the real money will be made in the future". So he launched the idea to give away free airline tickets, as money should be made by offering gambling through mobile phones

This sounds so much like the investment thesis I discussed in my posting on a Web 2.0 business model: you give away something for free, hoping to get back something valuable for free that was once expensive. Ryanair is expecting to trade seats in their air planes, for extra revenue that will exceed the revenue that will come from selling tickets for those seats. Will this work? Will Ryanair, that gained market share by taking on a different business model than their competitors (low margins, low service versus high margins, high service), succeed in expanding their market share?

It can go either way I think: either the Ryanair case will prove that the investment thesis on which Web 2.0 is based can work in reality, or it will show that in the beginning people will get interested because something is free, but once they find out it will cost them money (maybe even more than just buying a ticket) anyhow, they will lose interest and go for the safe bet (no pun intended ;-) ). Maybe it will only attract the kind of people you do not want to be on the plane with, but I must admit that I find it quite interesting what Ryanair is trying. At least it shows that they dare to be creative when looking for new ways to increase their revenue.

Should you embrace the Web 2.0 business model?

It is always interesting to try to integrate two trends that seemingly do not have much in common at a first look. I got the idea for this blog posting when I was reading the very detailed article by Tim O'Reilly on The Web 2.0. On page four, he refers to an investment thesis on Web 2.0 by Paul Kedrosky. What he writes in his thesis is the following:

Another way to look at it is that the successful companies all give up something expensive but considered critical to get something valuable for free that was once expensive. For example, Wikipedia gives up central editorial control in return for speed and breadth. Napster gave up on the idea of "the catalog" (all the songs the vendor was selling) and got breadth. Amazon gave up on the idea of having a physical storefront but got to serve the entire world. Google gave up on the big customers (initially) and got the 80% whose needs weren't being met.

Now let's get back to April 2005, when I blogged about Microsoft and Open Source. Now, 6 months later, not much has changed on the MSFT / OS situation. There is still some intiatives from the Open Source community to create tooling for .NET, but it remains doubtful whether the combo of MSFT and open source will ever really take off, as there is so much cultural differences between OS developers and MSFT developers, and there is a lack of Microsoft focus in the higher education research, traditionally a cradle of many OS initiatives / innovations. Not much news here then.
What has changed though, is that Web 2.0 is in the center of attention, and that for the first time in a long period Microsoft is not the dominant player it once was and they admit/know it. Could they turn the tide by fully open-sourcing the C# language for instance? Should they give the full .NET framework to the IT / OS community? Have they investigated this possibility? MSFT's arch rivals (when it comes to development) Sun have taken the strategy to open-source all their new products / initiatives, so you could say that they have embraced the Web 2.0 business model. The same goes to a certain extent for IBM, who are actively participating in OS initiatives, although they still make a lot of money on licences for WebSphere for instance.

IT companies should ask themselves two key questions:

1. Should we adopt the Web 2.0 business model (in which the open source business model fits to a certain degree), where we give up something expensive but considered critical, hoping to get something valuable for free that was once expensive? (take into consideration that this could be a huge risk!)
2. If we do so, just exactly what should we give up? Is open-sourcing one of our products (maybe all?) enough, or should we come up with something different, as more and more companies are open sourcing their offerings.

This in fact could be one of the main challenges for CEO's and CIO's of IT companies / vendors in the next couple of years, and it goes beyond the open source discussion.