2007 - The Year of Online Social Networks

As we approach the end of 2007, the start of 2008, and of course, the holidays in between them, I was yet again assured on how much of a difference a year makes in the technology industry. Every year, we see new technology advancements that become part of mainstream. 2006 was the year of user-generated content and I would call 2007 as the year of online social networks. In 2007, FaceBook launched its developer platform to propel the social networking into the mainstream. I had user ids on FaceBook, Friendster, and LinkedIn for the last few years but I only started using the social networks more regularly in 2007. May be I was late to the party, but I am sure, I was not alone.

The current proliferation of online social networks is a reminiscent of the Internet email in 1997. At the time, I was a sophomore student. The Internet email was a new phenomenon and to be honest I don’t even remember how many email services I had signed-up for. The few I remember were Hotmail, Yahoo, USA.NET, mailbox.com, mail.com, and a service from some company (don’t remember the name) that had let me create a @technologist.com-based email address, which was a very cool thing for a young undergraduate technologist at that time! Fast forward to today, I only use Hotmail, Yahoo and Google. I don’t even remember my user ids from other providers and don’t know if they are in business or not.

To make my point, if you look at the online social networking websites today, we are witnessing the same scenario. We have FaceBook, LinkedIn, Bebo, Hi5, Plaxo, Dopplr, Twitter, Google Reader Sharing, VodPod, and Yelp among many others that enable virtual networking of my life with my friends. I don’t logon to all these websites in the same way I didn’t logon to all of my Internet mail boxes in the late 1990s. Slowly but surely, through a natural selection process, I adopted Hotmail, Yahoo and later to Google email. I still use these three services as I like to continuously compare them to see which one brings me (a user) better features. I believe, in the similar fashion, over time the social network websites will consolidate and some will close down due to unsuccessful monetization models.

As I was writing this post, I had CNN Your $$$$$ program running in the background. I don’t remember who it was from but a Holidays gift advice from a program’s guest caught my attention. The advice was for the parents looking for a gift for their children’s teachers. The woman advised the listening parents to contact the parents of other children in the same class and pool the money together to give one good gift to the teacher. It was yet another aha moment in my life. Social networks could save money, help us select better gifts, and help companies to do more targeted advertisements? How? Just setup a community/group in a social network website that would enable parents to collaborate to select a gift for the teacher. And the targeted advertisement model of the social network website would show teacher gifts ideas. Am I taking it too far? Not really. Technically, it is all possible with the contemporary social network websites. The difficult part would be to have boomers or early generation X parents to use the online social network websites. Therefore, it may not become part of mainstream in the next few years. However, as the late generation X (including me) and generation Y people - who are very comfortable with the concept of online social networks - enter the parenthood, it will become part of mainstream because the use of the social websites to network with other parents to discuss the school lives of our kids will be a part of our routine life. Well, we shall see.

More Enterprise SaaS

As I sat down to write this Blog entry, the SaaS market welcomed the entrance of Amazon’s SimpleDB that will let developers and companies store simple tables in the Amazon’s cloud. The SimpleDB is yet another example of the shift from in-premise software deployments to the SaaS model – slowly but surely.

SaaS is a new model and it will take years before it will be used in lieu of in-premise software deployments more pervasively. Though, the actual impact of SaaS on enterprises is debated among the Internet leaders, nobody would argue against the SaaS shift and it is a market that no one wants to ignore. The jury is still out there as which companies will be the eventual leaders in the SaaS space, but the participation of all big Internet players has guaranteed that it will only get more interesting with time.

For my discussion, I will divide the Enterprise SaaS into two broad categories: Infrastructure SaaS and Application SaaS.

Infrastructure SaaS

Over the years, infrastructure installation configuration tasks have improved considerably through better user interfaces and more thorough introspections of the target environments. In contrast, the day-to-day administration of the infrastructure software has gotten more complex due to the advancements in the applications that use the infrastructure software. Today as before, every Enterprise still has to hire skilled system administrators, security administrators, backup administrators, database administrators, and web server administrators to keep these infrastructure software deployment running smooth and securely. The Infrastructure SaaS is mainly employed by the companies that want to do away with the internal infrastructure software installations, for some part, at least.

The contemporary infrastructure SaaS is mainly centered on the online backup storage services. However, Amazon is changing this slowly by coming up with more sophisticated Infrastructure software services. Amazon’s S3, EC2, and SimpleDB services can move real time storage, computing and databases into the cloud. Google, which by far runs the world’s biggest cloud computing cluster to deliver search, advertisements and apps, has surprisingly stayed away from the Infrastructure software SaaS. However, Google and IBM did join forces to generate an academic interest in the cloud computing science. It remains to be seen as which companies will be the eventually leaders in the Infrastructure SaaS space.

Application SaaS

Salesforce.com’s CEO, Mark Benioff, saw the Application SaaS dream in 1999. As I said in my last Blog entry, the entrance of big players such as Microsoft, Intuit, and the creation of new big players – Amazon, Salesforce.com, and Google – in the last few years have finally forced IT departments to take a serious look at the Application SaaS.

To make my Application SaaS discussion more specific, I will divide Application SaaS into three sub-categories.

Collaborative Application SaaS

Zoho, Microsoft Office Live, Cisco’s Webex and Google Apps are the few prominent players in Collaborative Application SaaS space. The new players are popping up, however, eventually they will either die or will be acquired by the big players. Santa Clara Cricket Club, a non-profit social organization, where I serve as a CTO, uses Google Apps SaaS. Recently, I was interviewed by the Google communication department regarding my implementation of Google Apps. I was asked why I had used Google Apps to run my organization. I answered that I saw the market shift towards SaaS products and realized it could transform my own organization. I implemented Google Apps SaaS for my own organization to confirm my understanding. At the end, I was very glad to move all of the features development work to the Google’s engineers for free!

Platform Application SaaS

Salesforce.com’s AppExchange is considered as the pioneer in the Platform Application SaaS. As of today, it has more than 725 application components that can be integrated into the Salesforce.com SaaS application(s). However, earlier this year, the opening of FaceBook as a platform to run third party applications has added a social twist to the Platform Application SaaS. The Social Platform Application SaaS has created a new market in itself. After Facebook’s announcement, other Social network players such as MySpace, LinkedIn, Bebo and Hi5 have also either opened their platforms or are in the process of developing a platform to enter into the Social Platform Application SaaS market. The Google’s OpenSocial has a potential to make developers’ life easy, however, I will wait for the market to confirm that in the next few years.

Business Application SaaS

This is the category that is getting most attention from Enterprise IT departments. Salesforce.com, Quicken Online Services, NetSuite, Microsoft CRM, and Workday are few prominent examples in the Business Application SaaS. Recently, SAP entered into this by creating a SaaS offering for the mid-market customers. Oracle already has CRM SaaS through its acquisition of Siebel.

Though, we have a big push towards the Business Application SaaS, I still believe that the enterprise software development is very hard and will remain hard. It is more art and less science. The big players took twenty years to create platforms that can be customized to meet large enterprises’ complex business processes. The Business Application SaaS is forcing the same issue again but moving it into the cloud. Jeff Huber of Google recently said that the platform wars are over and the Web is the winner. I could not agree more. The creation of a cloud-based SaaS platform that can support complex enterprise business processes is not an easy job. It will be the hardest job done when completed, if ever. The companies that embrace the SaaS shift early will be the winners at the end.

Every shift in the technology industry kills some existing players and creates new players. The SaaS shift will do the same. However, as with any shift, no body knows which companies will die, which companies will thrive and which new companies will be the next Oracles, IBMs, Salesforce.coms, Facebooks, Googles, Yahoos, Microsofts, Intuits, eBays and Amazons in 2020. Unfortunately, I can only connect the dots backward and not forward, otherwise, I could have predicted the next leaders. Nevertheless, the question is not “Why SaaS” any more; instead it is “When and how SaaS”. Do you know “When and how”?

Enterprise SaaS

I started my professional career at the start of a major shift from client/server applications to the web-based applications. Subsequently, almost all software products migrated to the HTML front-end and the web-based presentation layer became the choice for all user interactions. Fast forward to today, the advancements of web-based computing and communication technologies have created a great turbulence and major shift in the enterprise application architectures, yet again. This time, it is not about client-server vs. web-based applications. It is the delivery of software as a service (SaaS) in lieu of an in-premise software deployment. In both cases, the user interface is still a web application. However, the concept of SaaS moves the actual storage of data and execution of application logic outside of enterprises’ firewalls, and into the cloud.

It is not the first time that the concept of SaaS has hit the enterprise technology departments. During the dot-com bubble days, the same concept was captured as application service provider (ASP) or managed service providers (MSP). The dot-com bust bankrupted most of those ASP and MSP providers but some did manage to survive. Now, those survivors have been joined by Microsoft Live , Salesforce.com, Google Apps, and Amazon S3 among others. It is a fair question to ask as what is different today vs. five years ago that makes SaaS is a viable option. I believe there are three major differences.

First is the ubiquity of computers connected to the Internet, the dramatic improvements in the communication bandwidth, and the cheaper availability of the storage and computing infrastructures. For example, in 2000, I paid $65 for my home Internet line. In contrast, today, I only pay $20 for my home Internet line that is actually faster and more reliable. It is almost a 200% decrease in cost with increases in speed, reliability and availability.

Second is the change in the way people use Internet. Though, younger generation has led the way here, the adults have also caught-up on the use of Wikis, Facebook, Mobile Web, Instant Messaging, Blogging and many other communications mechanisms. All of this has made Internet as ubiquitous as TVs, thus, the average users have become comfortable using the Internet and related applications.

Third difference that I believe is pushing enterprise technology leaders over the edge is the entrance of big players in the SaaS space. Large enterprises only do business with big software vendors because they want reliability and future assurance. Though, Google, Amazon and Salesforce.com were small companies five years, today, they are considered big companies with billions of dollars in revenues. Microsoft’ CTO, Ray Ozzie, recognized the shift two years ago. And even SAP, the biggest enterprise application software vendor, has admitted that SaaS has become a viable for small and medium enterprises. Of course, time will move those deployments to large enterprises.

However, make not mistake. SaaS model is a major change in how enterprise software is developed, deployed, customized and supported. It is not a mere change from fat client user interfaces to web interfaces as we had in the early days of Internet. It requires SaaS providers to not only develop but also deploy applications and platforms that are very highly available, highly secure, highly customizable, and web intergrate-able. It is not an easy task by any measure and certainly it is not a task that can be accomplished in few months or sitting in a closed lab for few years. The only way to do this is to deploy these SaaS applications on a trial basis, learn from those deployments, adapt the platform and software based on lessons, and then upgrade existing deployments seamlessly – all while keeping the customized logic intact.

The enterprise software developers and customization engineers might dismiss SaaS due to its limited customization capabilities but they would be wrong about it. Every major shift requires us to re-think our process, cultures, organizations, strategy and talents. This shift to SaaS warrants a re-thinking process. It is a change that will take five-ten years to materialize. But it is a change that will hit your processes, people, organizations, business systems in every way you can think of. Realizing the shift is only a start.

Reaching Your Audience 2.0

The Web 2.0 technologies are revolutionizing the way the enterprises used to communicate with their employees, partners, suppliers and most importantly the customers. I had started my professional life at the beginning of Internet proliferation (1999-2000) and witnessed email (push) and WWW websites (pull) taking over notice boards and snail mail as the primary communication mechanisms in the corporate world. However, today, we are witnessing Blogs, RSS readers, social networks, wikis, podcasts and videos communications taking over the email and WWW (non-RSS) websites.

Though, the new mechanisms still rely on the Internet (same as email and WWW), they do require some fundamental changes in how the communications are conducted. The new communication channels are highly collaboration, highly interactive and some times contain user-generated content and comments. The most important aspect of these communications mechanisms is the viral nature of spreading any kind of news.

Let’s see how few corporate communications have been transformed through the use of these new communication channels.

Communication of Public Meetings

Today, the online videos and podcasts have totally revolutionized the communication of these public meetings. A perfect example is of Google’s Analyst day last month. I had not known about the meeting in advance. However, I do subscribe to the Google’s youtube channel that listed the videos just hours after the meeting. If there were no online videos and RSS feeds, I would have missed out on the information regarding Google’s products. And Google would have missed out on its audience.

Communication of a Product Launch

When it comes to a cool product presentation, no one can match Steve Jobs of Apple. However, not all of us can afford a ticket to MacWorld or are important enough to be invited there. So, how could you experience the magical iPhone announcement delivered by Mr. Jobs? Welcome, online short videos. Within the minutes of Mr. Jobs’ actual iPhone announcement, my RSS feed from News.com provided me a link to watch the announcement. I got to listen to the announcement without leaving my desk and spending a single dollar.

Viral Communication

Kindle. Does that ring a bell in your mind? Well, it is a new book reader that was announced by Amazon just a few weeks ago. The Kindle is already out of stock. However, a Google search on the word "Kindle" brought back 23,800,000 results yesterday? That is 23 million references of Kindle? How can this be possible? A product announced few weeks ago has 23 million references already? The answer is the viral nature of the new communications mediums - Blogs, videos, news, RSS feeds, social interactions, chat logs – that link everything to everything else. All of these links result into a viral communication of the subject, which in this case was a new product. What a powerful new way to communicate breaking news, product announcements, crisis communications and many other types of communication.

I would end this Blog entry with a note there are many companies that still are against these new mechanisms of the communications. But this behavior is not new. We all know change is always hard because it requires people to learn new things. Change is hard because it sometimes results into a power shift. Change is hard because it requires people to go out of their comfort zone. Personally, I am able to embrace change whenever I interact with a diverse set of people who can give me new perspectives. Therefore, to learn about these new communication channels, please don’t contact the communication department in your company. Find some teenagers in your neighborhood or ask your own (if you have any) on what they think about these new communication channels. They will explain the excitement of a user-generated content, the profound impact of a candor communication from a company, and the power of social interactions to spread the news (good or bad). Once you listen to them and think about it for a while, I bet your perspectives will change.

The Changing Roles of Enterprise Technology Leaders

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair..in short, the period was so far like the present period that some of its noisiest authorities insisted being on its received, for good or for evil, in the superlative degree of comparison only” – Charles Dickens, A Tale of Two Cities.

I recently read a CIO magazine article that had the above paragraph as a metaphor to describe the current state of an enterprise IT. It struck a chord with me as I could totally relate to the same metaphor. I believe we are living in a time of fundamental shift in how enterprises are using the technology to run the businesses. This fundamental shift is resulting into both confusions and opportunities in the contemporary organizations. The roles of enterprise technology leaders are changing. Though, we have a diversity of opinions on what enterprise technology leaders should or should not do, there are two common themes in all opinions.

First, the enterprise technology leaders have to transition themselves to be enterprise innovation leaders who can work side-by-side with their business colleagues. They help formulate the business strategy. They take the business ideas and execute on them using technology. They participate in all critical business meetings. They help organizations in not only cut costs through productivity improvements, but also increase market share through a superior use of technologies. They are a partner to the customer service organizations to create end-to-end customer interaction experiences. All of this is hard work and requires them to create a balance of priorities between the existing systems’ operational improvements and execution of the new ideas. Therefore, enterprise technology is increasingly becoming an art instead of a science as it requires more creativity and business insight on the part of its technology leaders.

Second, the enterprise technology leaders must be technical enough to learn and incorporate the consumer-oriented technological innovations into their enterprises. The Googles, Yahoos, FaceBooks and YouTubes of the worlds are raising the customer expectations to a higher level. The services of these consumers companies are simple but yet very innovative. The enterprise technology leaders cannot dismiss these services as “consumer” space anymore. These consumer services have become part of the lives of both generation X and generation Y. These new generations expect all enterprise services to behave in the same way. They expect enterprises to provide free-of-charge trial or advertisements-supported product use. They expect enterprises’ products support to be web-enabled, chat-enabled, and voice-enabled. They expect enterprises to be responsive and do not tolerate any wait time. They expect enterprises to be candor during the critical situations. They expect more and more communication from enterprises’ leaders over the electronic mediums such as web blogs, online videos, and podcasts. To enable such a change, technology departments have to deploy a layer of communication, interaction and collaboration channels on top of the existing very complex enterprise systems. It requires a careful balance between revealing dirty secrets vs. the candor that would boost customers’ confidence on the enterprise. It requires an understanding of different technologies available to handle different situations. Therefore, enterprise technology leaders must step-up and learn all of this if they want to capture generation X and generation Y customers.

I strongly believe that we are living in the best of the times of technology and its impact on our businesses. It is impossible to precisely define the new roles of enterprises technology leaders but an understanding of challenges faced in and skills needed for the new roles is a good start.

Innovation and Contemporary Hierarchical Organizations

Large enterprises are like battleships. They have hundreds of thousands of employees using thousands of resources to create hundreds of products and services. Therefore, to manage these large battleships in a controlled manner, hierarchical organizations were put in place. These hierarchical models have been a great success and have produced great economic results, too. However, enterprise innovations face significant challenges while working under these traditional hierarchical organizations. The enterprise innovations require collaboration and expertise across organizations. The enterprise innovations require product or service improvements that span multiple departments. However, the contemporary hierarchical organizations allocate these diverse resources in many departments such as sales, engineering, finance, operations, IT and marketing. The traditional ways of interactions among these organizations silos stifle the innovative ideas that require commitments and collaborations from multiple departments of a company.

There is nothing fundamentally wrong with the contemporary hierarchical models. However, a company must ask itself following questions to see if its culture fosters innovations or not. Do departments’ leaders mark their boundaries so that no one is allowed to do anything except what is in the process? Are they willing to take risk that might lead to a greater reward for the company? Do they contribute their resources to work on cross-company experiments that may or may not work at the end? Do they rotate their resources across departments? Do the people in each department understand why other roles are as important to the company as their own roles? Do people go out of their organizations without any fear of the upper management?

Only five-ten years ago, marking the boundary, not allowing anyone to do anything non-standard, no risk-taking strategies and a defined work-day were the behaviors that got the most reward and produced good numbers, too. However, this is changing because the business environment is changing. It is no more possible for a contemporary organization to rest on its past laurels [inventions or first time innovations] to keep generating profits. New competitors are popping up everywhere in the world. These competitors can create better or same quality products at a much less cost. The companies need to continuously innovate to fight these new global competitors. And they have to do it with both speed and quality. The challenge? Doing all of this while not creating an un-manageable enterprise.

I have come to a conclusion that to make this happen, a company has to start with the people. Carly Fiorina, the former CEO of HP, says in her book, Tough Choices, I paraphrase “Products and numbers are produced by the People. Therefore, change the people and it will change the products and financial numbers”. It struck a chord with me. What it comes down is the people including leaders and employees of a company.

The leaders have to champion a culture that fosters continuous improvements. The leaders have to motivate people to work across their boundaries and their daily jobs. They have to reward risk. They have to educate people on the company’s direction. They have to move strategy from the charts to the real actions. The have to rotate people across departments. And to reward such leaders, the companies have to create company-wide performance measurements for these leaders.

Does your company do that?