Two and half decades since the arrival of world wide web, most businesses are continuously experiencing the profound impact of new, digital web entrants. The new may not have become equals or counterparts to the old, but their positioning in the web-based business world seems to be quite unique and challenging. Notice the business models behind them that make this kind of entry possible. It would be a grave mistake to view the new, similar, yet thriving businesses in your industry and try to become one without undergoing the experiments and strategy exercises in your own context. Appearances from far can be deceptive.
Popular business models described by experts since the early web days support the above statements. Some of you reading this post may be recalling your own journey with the expert insights and the interpretation of the business models.
I think it was in the early 2000s, Prof Michael Rappa in his open course, Managing the Digital Enterprise, consolidated the new digital business models, coming to light by then. I guess at this time, E-commerce and Internet commerce did not make much of a difference yet in people's lives. Web-based businesses seemed to provide a channel for transactions with a focus on presence and reaching out using the web as another window for the business to serve customers from a distance.
Prof Rappa stated that internet commerce is sure to give rise to new business models. Amazon made it to his business models list as a Brokerage model and was described as a hosting service, a virtual mall, or a market place. Amazon also appeared as a virtual merchant in the merchant model. PayPal and eBay appeared as transaction and auction brokers respectively.
In the Advertising model, Google took the place of both query-based paid placement and content-targeted advertising. Craigslist was discussed as an easy to list (listing service) alternative to existing yellow pages/ penny saver/ even newspaper advertising.
Apple iTunes Music Store duly took its place as a Bit vendor under the merchant model category.
Wikipedia (open content) and Open source (software development) made it to the community models. Flickr was part of the social network service model. Netflix was the rising subscription service model.
In the university classrooms, online courses started out as replacements to distance education, scaling up their existing offerings. MIT open courseware became the pioneer in opening up world-class educational content reaching out to millions of aspiring students and life- long learners across the globe. Online learning systems resembled the uploaded versions of on-ground classroom-based learning. The e-mail was getting popular with people outside the business intranet mail systems.
Tim Oreilly came up with the article, what is web 2.0 along with comparisons of web 1.0 and web 2.0 businesses. The article is more than comparisons. He brought clarity to some powerful concepts, a few core principles and practices around web 2.0 technologies and business models, strategically positioned as a platform, gravitating towards some core competencies "forming a veritable solar system, global brain (with the mental chatter as the blogosphere)". Next, he mentioned "hyperlinking is the foundation of the web". The lesson from collective intelligence is that “network effects from user contributions are the key to market dominance in the network era”.
Talking about blogging, he highlighted the importance of the RSS technology that is significantly behind the database-backed web/ “incremental web” / “live web”. This technology allows for subscribing to changing the content (syndication) giving way to the weblog, not just a webpage. The fundamental framework of web 2.0 (see web 2.0 meme map) is listed in this article – covering the data-centric nature (raising debates on who owns the data, the new types of databases), end of the software release cycle (leading to software as a service, perpetual beta), loosely coupled lightweight programming models (think user participation), software adaptable on multiple devices, anytime, anywhere user interaction model and leveraging long tail, a global phenomenon (masses contributing with their own content) , adoption of RIA (rich internet applications) with dynamic content. These principles backed by the Web 2.0 based technologies were shaping the new web, which have now become a common practice in modern enterprises.
Enterprise 2.0 by Andrew McAfee emphasized the value of Emergent Social Software Platforms along with varying tie strengths among people. While listing all the benefits of making use of the collaborative, social, aspects of software (a big shift from web 1.0 to web 2.0) McAfee highlighted self -organization of the social networks shaped by its participants with the ability to build large communities without a central authority or guidance. The self-organization ability is paving the way to large business ecosystems in today’s digital world. Several of nature’s laws are penetrating into large enterprises requiring better and relevant ways of managing the ecosystems. Dion Hinchcliffe made significant contributions to the writing on the web and business models. My favorites are all of his diagrams with such clarity, enhancing the visual appeal, not missing the detail.
Several researchers and practitioners continue to predict and write about the evolving web trying to fit into a few paradigms (semantic web, mobile web, cognitive web, web 3.0 and even web 4.0), compared with the previous (?) more popular trend. This approach may lead to an understanding of a few, specific, characteristics of the web and drivers that enable those characteristics, but they can only hit the self- imposed barriers and limitations of the larger view of discussions sooner or later.
It is getting clear that there is no stopping to the continuous revolution the web is weaving. Yet, some of the trends seem to be taking back seat compared to some others. Interpreting the trends has become a relevant and serious practice to predict which trend would overtake the other.
Convergence, disruption, and innovation to create a parallel virtual world have become the norm with the backing of ever-growing technologies, business models, and strategies. The major themes of technology-based innovations are around Artificial Intelligence, Big Data, Analytics, Internet of things, and Cloud computing. The business models in the limelight are around social networks and web-based platforms. Platform strategies are framed from perspectives from engineering and economics by researchers and practitioners. To try to contain the web world in a few themes is something similar to containing the magic of the genie world figuring who is touched and not yet touched by the magic wand and what they became after...
Mary Meeker’s internet trends, IDC report (s), World Economic Forums Reports on Platforms and Ecosystems, and writings of the several, world-wide consulting firms have become resource libraries to get a handle on the business practices on the web. The web trends are giving way to clear vision of aligning with the omniscient, omnipresent web for each and every country, business, and the active, individual participants forming several universes.
Forming hubs and communities has become a goal for anyone associated with the trends of the web in the all-pervading social media and networks. This could manifest as an attention-drawing, self-promoting scheme for an individual who can ride the tide the social activities demand. Social media activities require time and skills to become the genuine master of the new and trendy social media skills that the web era demands. This trend can also be viewed as a positive force for those who would not have voiced their opinions and make a presence for themselves along with sharing their views. Still, more importantly, trying to name a trend and getting on the bandwagon is not the approach for serious business practitioners.
Forming hubs and communities has become a goal for anyone associated with the trends of the web in the all-pervading social media and networks. This could manifest as an attention-drawing, self-promoting scheme for an individual who can ride the tide the social activities demand. Social media activities require time and skills to become the genuine master of the new and trendy social media skills that the web era demands. This trend can also be viewed as a positive force for those who would not have voiced their opinions and make a presence for themselves along with sharing their views. Still, more importantly, trying to name a trend and getting on the bandwagon is not the approach for serious business practitioners.
Full of paradoxes, the web has come a long way, far from the times when Nicholas Carr’s IT doesn’t matter(2003) debates on the Information technologies were causing concerns. The programmers and professionals of the early Y2K’s may have disappeared into the oblivion or morphed to creations of their own making, but the web world has not been stopping for anyone.
There will be a follow-up post to highlight the significant contributions of authors and researchers in bringing clarity to the ever-growing business models of the web.
References:
A few references on web 3.0 and web 4.0 – based on practices observed.
