Network Based Business Models: Another Step Further
Kris Gopalakrishnan, CEO Designate of Infosys, recently observed: "The computing horse-power within the largest of firms has been outpaced by what is today available collectively at the fingertips of individuals." A testimony to true democratization of technology! In Kris' view, it is going to be a challenge for firms to catch-up; further, given security and confidentiality concerns, it may be a while before Web 2.0 applications (Read my previous blog here) are adapted to an "Enterprise 2.0" framework.
An ex-CIO Client of mine who is now examining independent business ventures told me that the Software-as-a-Service (SaaS) business model could accelerate adoption of Web 2.0 by Companies. SaaS is about hosting business critical IT applications off-premise, outside the firewall of a Company and charge based on usage or transaction. SaaS can bring all the latest and innovative Web based applications developed for individual use, into the enterprise mainstream by distributing (and thereby reducing) adoption and ownership risks.
Service Oriented Architectures (SoA – those cool programs that seek out information from distributed systems or applications and ensure seamless updates to maintain a single version of truth!) which are under the hood of any SaaS model, can be Web 2.0 accelerators too.
And here is the kicker – last week’s news about a potential tie up between Google and Salesforce.com is a harbinger of Enterprise 2.0 which promises to flatten Companies through the marriage of utility computing and thin client, non-proprietary technologies. Salesforce.com ushered in an era of CRM services in the SaaS, transaction pricing model. Pioneers like Google will probably make the hard disk on my PC redundant, allowing me to drawdown computing power and a menu of application services from the Web.
So what happens when you put these together? Salesforce.com gets to draw upon Google’s strengths in democratizing computing power, allowing employees within firms who are end users of its software, access to Web 2.0 innovations. Google will get a ready platform to enter the Enterprise space and offer its popular, individual tools today like gmail, online word processing, spreadsheets, Google Reader and may be even You-Tube like interactive features to corporate users! And think about the seamless link that Salesforce.com’s CRM application can have with a Company’s advertising strategy, through Google’s online advertising juggernaut! As they say, the possibilities are infinite!
Such emerging partnerships in the Web 2.0 context will encourage Companies with transaction intensive businesses to gravitate towards a network model sooner than later.
Consider another interesting development in the peer-to-peer lending space last week. UK’s Virgin Group has acquired a majority stake in Circle Lending Inc., a US based peer-to-peer lending firm. Circle Lending is planning a bigger play in the student loans, home mortgage and debt consolidation segments, which is where I believe the future of peer-to-peer lending is (Read my older blog on this). In their press release, Circle Lending’s CEO, Asheesh Advani says "We've just scratched the surface on understanding the power of family and friend transactions and how they can change the financial services landscape." And a large brand like Virgin (which provides credit cards and other financial services in the UK) entering this space underlines the emerging significance of network based business models.So, I am personally convinced that Web 2.0 will have an Enterprise 2.0 avatar pretty soon. How soon and what genre of industries or companies will be at the leading edge of the adoption curve are interesting questions that I hope to hear from you on.
Comments
Well E 2.0 is already there I suppose. Think of Basecamp applications or hosted office applications.
And also that Social 2.0 is too emerging. When we talk of p2p finance we should not forget Kiva.org.
Posted by: Thejesh GN | May 29, 2007 5:52 AM
It was interesting to read about Salesforce tie-up with Google. I think web-based services are the next challenge for out-of-box products and companies like Microsoft. It will be interesting to see where will Microsoft go from here and will they adapt as fast as they should or lag behind Google in adapting Web 2.0 like they lagged in Advertising model for Internet.
Posted by: Ricky | May 29, 2007 8:13 AM
Web 2.0 technology enables customized and interactive presentation to prospects and customers. Web 2.0 will script another era in the marketing initiatives of any enterprise. With Google and Salesforce.com joining hands the impact on digital marketing will see a paradigm shift.
Posted by: Sunil S Chiplunkar | June 8, 2007 3:34 AM
SaaS has already taken off for communication service providers all over the globe. SaaS is commonly known as Service Bureau operations in telecom where business critical BSS (Business Support Systems) applications like Billing, CRM are hosted outside the operator premise and accessed through web. SaaS from a BSS angle currently has a market size of over 1.2 Billion USD.
It is the most preferred way to be an agile operator especially in the Tier 3 and VNO (Virtual Network Operator) segments. These business applications are moved to locations where they can be managed and maintained best and helping the service provider to focus on its core business.
Almost all Business Support solution providers are taking additional care to make their products & solutions SOA friendly.
Posted by: Ankana Chakraborty | June 13, 2007 10:56 AM
Today Network is a necessary condition for any business strategy and the competition is not going to be just Company Vs Another but it will be one Value Net vs another
Refer
a) ValueNets from www.ProftPatterns.com
b) Network Effect in Competitve Advantages By Michel Porter
Posted by: Balaji Venaktraman | July 1, 2007 5:26 PM