No Boundaries: ENTERPRISE 2.0 is free range

• Mike Walsh
• 18 February 2008
• Page 1 of 2 : single page

Photo credit: Tim Marrs

Enterprise2.0: A new religion?

It feels I’ve read the same article a dozen times. The headlines are hardly earth shattering: ‘Big Companies Now Blog’, ‘Wikis in the Workplace’, or worse, ‘Facebook Fridays gain favour’.  

It’s hard not to suppress a cringe. It seems that the once crusty IT departments around the world have discovered a new religion and its name is Enterprise2.0. 

Don’t get me wrong, it’s great big business is waking up. It’s just that the consumer-focused social media applications like blogging and networking are only part of a much bigger story about how the web is changing. And in particular, how it’s changing for small business.

Web2.0: The internet as a platform

Just what is Web2.0 and why is it important? Depending on who you ask, you can be sure to get entirely different answers. So to get the story straight, I thought it best to ask the man who came up with the concept in the first place.

I caught up with Tim O’Reilly in Beijing. CEO of the influential technology group O’Reilly Media and known to many as the father of the Web2.0 movement, Tim was holding court in the gaudy glitz of a banquet hall in a local Chinese hotel. It was the first day of China Foo, a conference at which participants came up with their own agenda and self-organised what they wanted to talk about. The result, as you might expect, was equal parts inspiration and chaos.

As O’Reilly paced the room, he explained that Web2.0 was a continuation of forces set in place decades ago with the birth of the software industry. In the early 80s, IBM thought the future was about hardware, so the company signed its software rights to Microsoft. Microsoft of course, visualised the network effects of a rapidly-expanding install base, and was able to build a proprietary monopoly. That monopoly lasted until the net hit the big time, and the usual rules about competition in a software-based world went out the window. 

O’Reilly now believes we are witnessing the rise of the Internet as a platform. Web2.0 is not really about software, in the same way that the IBM personal computer was not really about hardware. It’s about delivering live services which get smarter and more powerful the more people use them. And, as it turns out, that’s great news for small business. 

Enterprise-grade services for small biz

In the past if you were a small enterprise, it was hard to justify the expenditure required to invest in dedicated IT business systems. Your revenues might be growing fast, but a large technology fixed cost was too prohibitive to consider.

Web2.0 has finally made the 90s dream of Application Service Providers (ASPs) a reality. The lingo might have changed, vendors now talk about hosted applications or ‘Software As A Service’ (SAAS), but the concept is the same. Today, small-business owners use new web-based platforms that give them access to enterprise-grade services at variable pricing. These could be customer relationship management (CRM) systems or accounting or communications tools. 

And it’s not just the usual suspects like Microsoft who are active in this new space. Amazon, Google and Yahoo! are all quickly developing capabilities in the hosted application space. Amazon, despite starting life as a book seller, is investing millions in developing an infrastructure to offer access to its own computing cycles, storage, communications and payments platforms, all nicely bundled as a web service. 

Scale matters

Atlassian is a company I’ve been watching closely during the past few years. Partly because it’s an Australian success story, and partly because its founder Mike Cannon-Brookes used to work for me back when I was running Jupiter Research.

With more than 9000 customers across 96 countries, Atlassian’s development and collaboration tools are now used by some of the world’s largest companies. One of its biggest customers is IBM, for whom it maintains an enterprise wiki with more than 70,000 users. 

Mike’s view is that even though companies are becoming more socialised, many of the new Web2.0 technologies don’t adapt to the enterprise seamlessly. Making Web2.0 work in an enterprise setting is as much about people and process as it is about technology. Just because the tools are there doesn’t mean that people will use them. Nor can you necessarily make them. The benefit of blogs to companies is huge, but you can’t fire people for not blogging. 

Aside from its own enterprise technologies, Atlassian is an interesting study of how a fast-growing small business can benefit from hosted applications. Atlassian has never had a formal payroll system, preferring to use a web-based system. The CRM system is completely hosted online, and the accounting system is hosted outside the data centre. Mike says the benefit of these arrangements is that the company can grow with its systems. Being able to outsource and pay a monthly fee is a major plus for small businesses. 

In Mike’s view, it’s a question of scale. A big company can run its own mail server. But if you’re a small company, having Google do your mail is cheaper. Of course, there is a crossover point. Big companies are worried about hosted services, small companies less so. Data protected by large hosted application providers is probably safer than if it was kept internally. 

 How can small business benefit from Web2.0?

1. Write and share documents

Words, words, words. You can’t get away from the fact that so much of business is spent creating documents, spreadsheets or presentations. For years, that meant hefty license fees for copies of Microsoft Office. But now today’s web-based productivity products are trying to change that. 

Google Docs, which features both spreadsheet and word-processing, is a free and popular choice for many companies. But there are many others, including Zimbra, Thinkfree and Live Documents, the new business from Hotmail creator Sabeer Bhatia. If you are worried that you won’t be able to edit your documents when you’re not online, Indian start-up Zoho has used the Google Gears open source platform to provide full offline access through your browser.