The web in 5000 days

The web has been in existence for less than 5000 days according to this video is from Kevin Kelly, executive editor at Wired Magazine.  He posed a rhetorical question that if people were to look introspectively 10 years ago, whether anyone would have predicted the emergence and pervasiveness of the internet.  Therefore, the first lesson of the web is people “Have to get better in believing the impossible.”

With the emergence of convergence in technologies (IPTV, Mobile phones, etc.), he likens all these devices to be one giant machine that uses 5% of the world’s electricity with no downtime.  The complexity of this giant machine is similar to the human brain, except every two years, the brain does not double its power.  In the next 5000 days. this machine will go through change in its embodiment, restructuring and codependency.  As posted in an earlier posts here, here, here and here mobile phones and other devices with screens are on the cusp of convergence.  Many computer applications that were exclusively in the realm of the computer hard drive now have presence on the web. More can be read about this in an earlier post.  Mr. Kelly predicts everything will become web-based.  Products such as shoes (e.g. Nike ID+) already come embedded with computer chips, where data can be transferred to/from the product to the internet. Combining all the various devices and the reliance on the web, this machine now becomes the embodiment of the human.  It now has the eyes, ears, speech and touch like the human.

In the beginning, the web was linked from machine to machine through packets of shared data. Today, the web is linked from page to page.  People link to/from various pages constantly.  To navigate around the web involves clicking on various links from one page to another.  Currently, this system is currently undergoing change, and the web will become linked by data (idea to idea).  An example of this change is there are a plethora of social networking sites, and for each new site the user wishes to join, he/she needs to identify his/her group of friends.  Wouldn’t be better that whenever the user goes anywhere on the web,  there is no need to ask for his/her friends again? This new trend of the web being restructured and linked by data is being implemented.  Artificial intelligence like the Google search engine is becoming increasingly sophisticated and smarter, which facilitates this movement towards this technology.  For additional reading, I had posted about this earlier. 

Total personalization in this world will require total transparency.  Due to content on demand, and the a search-based web, finding information or content that fits the users’ interests and needs, will require the user to divulge more personal information.  Examples include: http://www.last.fm which plays music that is personalized to the taste of the user.  I had posted about this phenomenon in earlier posts here and here.

As mankind has been dependent on the alphabet, the web will only be next. Mr. Kelly gave an example that sometimes, he does not need to remember information, he simply uses google to search it. As increasingly more applications are being web-based (web is now being more ubiquitous), the tendency to be co-dependent on this will occur.

Mr. Kelly espouses the idea that every object in the world will be somehow linked to the web.  This will occur not in the next 5000 days, but at a much later time.  Imagine sitting on a plane, and the physical book that you are reading is linked to the web.  Other items can include: your seatbelt, seat, pillow, blanket, magazines, tray, TV set all are linked to the web.

This giant machine that is the sum of all things in the world and its operating system is the web, will influence people’s daily lives constantly.  With the changes in the embodiment, restructuring and codependency of the web, people will become part of this giant machine.

I can see this trend happening as information that was once proprietary and had a monetary value attached to it is now free and easily searchable.  Imagine having an all-encompassing worldwide library with no borders bounded by state or federal lines, and all of the world’s combined books, journals and other materials were easily accessible?  The web has become this worldwide library.  In the past, if someone moved to a new environment, it was difficult to meet new people and make new friends, right?  Now, people can easily use the internet to search for special interests groups that fit their lifestyle and interests.  They can join this groups and meet these new people.

Convergence and its applications

I have written about convergence of technologies in an earlier post, this article discusses the application of this technology in people’s homes, and how they utilize this technology to communicate with their family, friends and acquaintances.  This Swiss study was conducted by eleven researchers (5 anthropologists, 4 psychologists, and 2 sociologists)  who engaged in a longitudinal ethnographic study.  They observed the research subjects in their homes and noted how the subjects communicated with people, to who they communicated with, when they used a certain communication medium, and what was the content of the communication and  why they chose a certain medium to communicate with certain people.

It was interesting to observe that the closer (in the inner sphere of the social network) the friend or family member to the research subject,  the more diverse the communication tools (SMS, cell phone, IM, etc.) that were employed, whereas those on the outer sphere (acquaintances) had one or two methods of communications.  With more diverse forms of communications, it allowed for greater possibilities for different situations.

The different communication tools were used for different purposes even amongst different people.  For example, the home telephone was primarily used to communicate with family friends or relatives.  This was so that everyone in the family could communicate to these people.  Mobile phones were more personal, and were used for close friends and family.  Further discussion about this was discussed in this earlier post.  SMS text messaging and IM were popular among the younger demographics to communicate with their group of friends at anytime during the day.  This topic was also discussed in this earlier post.  Email was used to exchange electronic files among family and friends, and if the research subject belonged to a club or an association, email was used to coordinate activities with these groups.  For acquaintances, tools such as Facebook and MySpace were used, where acquaintances were kept as contacts with minimal effort and yet easily accessible anytime.  With all these communication mediums, researchers have found that none of the emerging mediums cannibalized existing ones, users found different methods to use the medium with different purposes.

From an advertising perspective, this could be useful.  I think by understanding the communication patterns of various people, and how they communicate as well as use the various tools in the age of convergence where an ever-increasing number of tools are available is very important.  Now, the question is how to make the advertisers message resonate and relevant to the intended audience.

Mobile phones as the next medium?

 

With mobile phones outnumbering TVs, PCs, and automobiles; SMS text messaging outnumbering emails, it is not difficult to understand how the mobile phone will be disruptive as the next large media platform. 

 

There is already a convergence in technologies between Internet, Mobile phones, TV and banking industries.

 

According to the exerpt from the book, ”Mobile as the 7th mass media,” by Tomi Ahonen, the mobile phone started as a simple communication tool that allowed the user to contact or be contacted anywhere and during anytime.  Now this device has transformed to include: consumption (browser), charging (payments), creation (camera), cool (fashion), commercials (advertising) and now community (social networking including: Flickr, Twitter, etc.)

 

The seven types of media that were discussed in this book include: Print, Recordings, Cinema, Radio, TV, Internet and now Mobile Phones.

 

Internet was the first technology that content providers engaged users.  Traditionally, the messaging delivered by the content provider was broadcasted to the user, with no interaction.  With the advent of web 2.0 technologies,  the relationship between the content provider and the user was transformed by the formation of online and offline communities that enabled the user to share, discuss and collaborate different ideas, news, files and other interests with other users.

 

The book contains a chart that illustrates how newer technologies can cannibalize older ones.  Mobile phones can cannibalize all the other media including the internet.  All the functionalities of the internet are now fulfilled by the mobile phone. 

 

The seven inherent advantages of the mobile phone include: the personal nature of the phone (advertising message ca be customized to the user, as mobile phones are rarely shared); the portability (the mobile phone is always in proximity to the user whether if they are traveling or sleeping); cell phone is always turned on; the ability to have a payment channel; ability to have user-generated content; more accurate information about the user (easier to measure audience data); the interactivity between the phone and its users – data 2.0 (includes text and twitter messages) measuring not what the individual does, but rather what the group engages in.

 

An example includes: the iPhone 3G has disrupted the current business model with the convergence of internet and mobile phone technologies, while maintaining user-friendly design with sleek design.  A significant number (30.9%) of iPhone users watch online mobile videos.  During some ad campaigns that targeted mobile phones, 75 percent of all video ad impressions were from iPhone users.  With media rich formats and campaigns that engage the consumer, this type of media could be the future of advertising media.  Increasing brand awareness and brand equity would be the main objectives of advertisers of this medium. 

 

Here is a quote from an article discussing advertising and the iPhone:

 

“These big brands require premium mobile executions on rich formats, like video and interstitials, to visually showcase their products and to create engaging user experiences. The best use of mobile is seen in multi-format, interactive campaigns that leverage both rich formats and high volume formats like WAP display and text banners to generate brand awareness and favorability, message association and increased likelihood to buy, rather than pursuing on-the-spot purchases in most cases.” 

 

Here is another article with an interesting video that illustrates the advantages of portability and the interactivity of the mobile phone.  The user shown in the aforementioned video can scan barcodes that are embedded in advertisements that are printed in magazines, newspapers and other written media to purchase the item or to engage in further interactions with the advertiser.

 

Undoubtedly, mobile phone will be an emerging force for media in the future.  The only area of contention could be the infringement on the user’s privacy.  After all, users must pay for airtime minutes as well as any data received or sent.  In my opinion, the only effective manner that mobile phone advertising can be effective is if advertisers engage the consumer, by being granted permission to do so.  It is the consumers that need to seek this type of media whether it would be downloadable games, applications, or to engage in text messaging/twittering.  Recently, to launch the new 2009 Audi A4, Audi of America released an iPhone game that utilizes the accelerometer technology on the iPhone.  This certainly created a buzz for the game.  Users were fascinated by the game and through users, they became advocates of the advertiser.  

Emerging technological trends for businesses

 

 

 

  

 

What are some emerging technology trends that will change and reform businesses and the economy?

 

 

This article from McKinsey Quarterly discusses eight trends can be categorized into three subcategories: Managing Business Relationships; Managing Capital and Assets; and Leveraging information in new ways. 

 

 

The next four trends are categorized under the “Managing Business Relationships” heading.

  

 

The first is Distributing Cocreation – This is when suppliers, customers and contractors can aid in product/service development.  By shifting more power and ultimately more autonomy to outsiders that work together, costs and lead times can be reduced by getting different insights during the development process and forgoing some of the bottlenecks associated with having total control of the innovation process.  The notion of a open-source innovation was discussed in this earlier post. 

 

 

Companies will need to compete with each other in order to attract the best and most innovative contributors.

 

 

The second trend is “Using Consumers as Innovators,” and is facilitated by the growth of the web 2.0.  Customers are looking to be engaged with one another or with an organization.  Customers are increasingly being engaged by the their involvement in the development, testing and marketing (viral marketing) of products or services.  An example of is Wikipedia.  The accuracy of this online encyclopedia is almost as accurate as Britannica’s. 

 

 

With this trend, development cycles and costs can be reduced, while understanding the customer’s behavior and wants can be easier.  The cost to attract customers is lower, and retaining customer loyalty becomes easier. Companies also need to be aware that the customers that would be involved in the development of their product or service is a small segment of the overall market, therefore, the developers’ needs and wants maybe different than the overall market.  Often customers’ needs and wants are immediate and not long term. 

    

 

The third trend is “Tapping into a world of talent”, as the internet is becoming more interactive with new communication and collaborative tools, outsourcing some functions of a business to specialists, talent networks, and freelancers is increasingly more viable from a cost and functional aspect.  As I had alluded to in yesterday’s post, some advertising agencies have outsourced their creative, account management and media buying departments.  Many companies would focus on their core competencies and not have the burden of being tied down to those other functions. 

 

 

The main task is being able to harness the global talent pool, managing the existing workforce and being able to integrate the work in a cohesive manner. 

 

 

The fourth trend is “Extracting more value from interactions”, that is interactions between different types of work and enabling the workforce to function more effectively and efficiently. 

 

 

The first type of work is Transformational, usually work that is involved in the production of goods or in the extraction of raw materials; the second type of work is Transactional, usually work that is clerical or simple-rule based such as a call center operations or someone involved with data entry; finally, the last type of work is Tacit, which primarily deals with knowledge, judgment and collaboration with multiple interactions with multiple stakeholders.  For example, a sales person would engage in tacit work, by interacting with the marketing, product development, H/R, logistics and after sales departments to maximize sales, while engaging and interacting with multiple parties through collaboration. 

 

 

There are systems that can maximize the efficiency of both transformational and transactional work such as assembly line work.  However, with tacit work, there is no such a rule or process.  Maximizing the effectiveness of this work is accomplished by focusing them on interactions that create value.  Companies must enable these workers with greater decision making ability, bring down barriers, increase the availability of resources/information and facilitate collaboration.  New and current technology is facilitating this trend and enabling tacit workers to become more effective by having wikis, blogs, emails, text messages, and feeds to make communication and collaboration easier.

 

 

The next two trends are categorized under the “Managing Capital and Assets” heading.

 

 

The fifth trend is “Expanding the Frontiers of Automation,” companies will continue and expand their automation ability for tasks and processes that are repetitive.  For example, Fed-Ex and UPS have enabled users to track their packages online.  A major benefit would be to lower costs and help users get the information they need effortlessly in a timely manner.

 

 

The sixth trend is “Unbundling Production from Delivery,” uses existing business structures of large businesses (e.g. supply chain management, computing power, etc.) and rents this to other businesses.  From a supply side, this technology would attract asset-intensive businesses (e.g. factories, office buildings, etc.) to raise their utilization rates and therefore, their return on invested capital.  From a demand side, this technology would attract businesses that do not possess the economies of scale and scope to achieve competitive marginal costs. 

 

 

Unbundling also offers businesses quick and easy access to assets; that minimizes impact on their balance sheets; and makes their income statements more favorable.  For the businesses that offer unbundling, it decreases their marginal operational costs because of greater utilization of resources, and greater economies of scale and scope.  Companies need to manage possible supply and demand conflicts.  Examples have included the mobile phone networks and Amazon.com. 

 

 

Here is another example in this article that discusses the growth of APIs across many existing web platforms using existing computing power of large companies. (e.g. eBay, Amazon, etc.)

 

 

The last two trends are categorized under the “Leveraging information in new ways” heading. 

 

 

The seventh trend is “Putting more science into management,” companies are using statistics and other data to use internally and externally.  For an internal example, automotive companies will typically spend more on sales incentives and on advertising campaigns based on seasonality of sales and possible product lifecycle changes. For an external example, Listen.fm and Amazon.com both use customer segmentation systems that utilize recommendation engines that suggest certain items based on the user’s past history, and on other users’ preferences.

 

 

As mentioned in an earlier post, the costs for computing power and storage capacity will continue to fall; and the quality and quantity of information that will become available will rise. The increase in information will empower organizations, as it becomes becomes transparent to employees and suppliers, and the access to it becomes broadened. 

   

 

The eighth and final trend is “Making Business from information,” as now increasingly more data is captured by businesses and from varieties of sources; this could be beneficial for an information-based business opportunity.  Intermediary businesses that have access to greater quality and quantity of information can charge a premium for the aggregation and analysis of this data.  An example of this could be a security firm selling its video footage of a retail store to a market research firm studying retail consumer buying behavior. 

 

 

These aggregators need to be cautious, because they could be aggregated themselves. Their business model can continue to flourish in business to consumer shopping sites and business to business directories.

 

 

Companies need to be cognizant of these eight emerging trends.  Rather than reacting to it, companies can now use these trends to catalyze change and create opportunities as a result of this.

 

The Usage of Web 2.0 in business

 

 

 

To what degree have businesses embraced web 2.0 technologies? How have they used this to interact with their employees, suppliers and customers? There was a survey conducted by McKinsey that addresses these two questions.

 

 

Web 2.0 is defined as the ability for users to interact, share, collaborate, and exchange ideas.  The age of user-generated content and ideas aid in the development of Web 2.0; applications of such usage include: Wikis, Blogs, RSS Feeds, Social Networking sites, etc. 

 

 

Findings include that most companies employ web 2.0 technologies to for internal usage, interfacing with customers, and interfacing with suppliers.  Some benefits that can be derived by engaging those three parties include: fostering collaboration within the company and as well as encouraging customer and supplier input in the product/service development process; tapping into a larger pool of experts; improving customer service and managing knowledge internally.

 

 

Since this survey was conducted internationally, different markets ended up having different needs and consequently, having different levels of satisfaction.  For example, in the Asia-Pacific area, the satisfaction of web 2.0 technologies is the highest, and the use of wikis is the highest.

Not surprisingly, the company’s satisfaction of web 2.0 tools is highly correlated with the usage and implementation rates. 

 

 

Some of the barriers for satisfaction for the usage of this tool include: senior management not embracing this technology; senior management not understanding the potential financial return; not having sufficient resources to adopt or experiment with web 2.0 tools; and the IT department not deploying or instituting such technologies.

 

 

The business that reported the highest satisfaction with the usage of web 2.0 tools adopted this technology by business units rather than IT department, whereas, dissatisfied respondents exhibited the reverse, where IT departments chose the tools and delivered to the business units.  Almost 60% of respondents were satisfied with the web 2.0 initiatives, expect these business to be more aggressive in the marketplace with those who are slower to adopt this technology, also, it is inevitable that more investment is being poured into the adoption of this technology. 

 

 

 

 

Companies that understand the intrinsic benefit of adopting this technology need to have all levels of management embrace this, and the adoption needs to be business-unit driven.

Design in Business Process

 

This article is an interesting read about design.  Earlier posts have reiterated the importance of user friendly designs.  In the past, new technology without much thought to design was practiced.  Today, especially, with the younger generation, design is the most important criterion.  For example, the portable mp3 player market is dominated by Apple with their iPod.  Compared to its competitors, the iPod is easy to use, as there is only one button versus a multiplicity of them with other competitors.  Also, the graphic user interface is also friendly.

 

 

Businesses must become agile to adapt to this new age where barriers of entry are now low, which is facilitated by user-generated content. Transforming a business into becoming agile to embrace change can only be possible if innovation, risk taking, and radical ideas are embedded into the organizational culture. This is facilitated if throughout the organization, staff need to act, feel, and work like designers.

 

 

The article is summed up with this quote:   “Design is the accelerator for the company car, the power train for sustainable profits. Design drives innovation, innovation powers brand, brand builds loyalty, and loyalty sustains profits. If you want long-term profits, don’t start with technology—start with design.”