I was working on some more research on business model innovation the other day and as I thought about the role of the Internet in business model disruptions over the past 15+ years, I couldn’t keep my mind from wondering back to something that has troubled me for the past couple of weeks, the proposed merger between Time Warner and Comcast. Actually more than just that announcement, there are many issues that keep coming up that threaten the independent nature of the Internet and those threats seem to be increasing in potential very rapidly. Now I should first say that I’m a technology analyst, not a political commentator or expert in government regulation / FCC policy. I am focused on innovation in technology and have spent a lot of time looking at the use of and disruptive nature of the Internet though, and that means that “net neutrality” is a subject that is of keen interest to me.
The problems, which are global, seem much more obvious and pronounced in the US, at least once you get outside of the obvious attempts by non-democratic governments to control access. This growing crisis in the US is a big problem from my perspective, and I guess many would argue that we’re already quite a ways from an open Internet, even putting aside the NSA privacy scandal, and just focusing on the other threats that are top of mind today. Before jumping feet first into these issues though, I want to put a basic concept in place; the Internet is to me at least, the latest addition to an obvious list of public utilities, added to electricity, water, sewage, natural gas, and phone service. This is very important from a legal and regulatory standpoint, and as such, value in an open market should be the key, we should have a system that insures reasonable availability / access to everyone. As a business tool it is essential and from an individual consumer perspective it is a key backbone for commerce, education, entertainment, communication and lot’s of other stuff that we haven’t even thought of yet. From a technology perspective we would not be talking about the cloud, big data/analytics, social technologies or even mobile devices in the same way without the Internet, disruptive businesses that range from Amazon and eBay to Uber and Airbnb, would not exist without it.
Why is Net Neutrality important? To get to that, first let’s make sure we know what “it" is. Net Neutrality is the concept that the Internet should be open and allow free communication. In other words Internet Service Providers (ISP) or governments (or any other organization) should not have the ability to discriminate against, block or interfere with any content, web site, application or user that travels across the network. ISP’s are tasked with providing open (dumb) networks that can be used equally by anyone. As a utility this is similar to a public phone line, the phone company provides the service for a fee but has no control over the content that is shared (i.e. the conversations) through the service. The phone company can’t for example, make the calls to your grandmother clear because she is on the some phone company service but provide substandard service to your office in Paris just because they’re on a different phone company service. They also couldn’t change the call quality based on what brand of phone you use, giving preferential treatment to phones of their manufacture while only providing substandard service on competing phone brands.
So for consumers net neutrality is essential to make sure they can get access to and interact with any content they choose in a consistent manner. It also means that there should be access available that provides reasonable value for the price paid and that it is not denied to a large part of the population for economic reasons. Everyone gets access to all available content and services. Think about it this way, the Internet is just another part of your everyday life, not a luxury place you visit sometimes. This might not have been the case 20 years ago, but today you are on the Internet as much as you’re not. It’s just a part of your everyday life.
For businesses it means that the landscape is a level playing field from a competitive standpoint (or should be). In other words ISP’s can’t favor their own content by slowing down or denying access to competing content. They also can’t use access as a bargaining chip to extort higher prices just to stay competitive. Not that ISP’s aren’t entitled to make profits from providing the network, they just can’t use access or quality of access to change the competitive landscape in their favor. This extends to start up as well, which could easily fall prey to this type of discrimination, with ISP’s using favor to help or thwart start ups based on relationships. The same would apply to governments, they couldn’t, for example, order higher quality service for businesses that contributed to campaign funds or had undue influence through lobbyists. Governments couldn’t restrict access to services except in some pretty dire situations, like the need to use critical infrastructure for communications in a short term emergency or natural disaster.
So what’s the problem, or why do I think we should be more than just a little concerned about net neutrality? Well, let’s look at a few things:
1. A few very large companies are making a very obvious assault on net neutrality in the US and attempting to gain unacceptable control (maybe they already have unacceptable control?). Competition is dying in the US, or actually is on life support. The proposed Time Warner / Comcast merger would create a near monopoly in 19 of 20 of the largest markets in the US. Both companies already have a reputation for heavy handed practices so imagine what it would be like in a market that they control; or in other words, they already have significant influence and control based on pricing, pay-to-play and just overall size, what happens when they become massively larger?
Comcast has a history of using it’s Internet access to favor it’s own cable services over competitors. Netflix again is at the heart of this issue, with Comcast using data speed caps as a tool to favor it’s own content over any other competitors. I guess this is not as much a problem for Netflix after they started paying off Comcast for equal access though, but if you want to know more read this.
2. Peering, or the voluntary connecting of two administratively different Internet networks for exchanging traffic has generally been accepted as a necessary part of maintaining net neutrality. Simply peering is necessary for keeping traffic between high traffic participants flowing freely. Over the past several months is appears that Comcast was somehow slowing Netflix traffic. Both parties disputed it, but the fact is that there is quite a bit of evidence that makes me believe that Comcast was in fact throttling Netflix. Now remember Netflix is a direct competitor to the movie services that cable operators offer and since cable operators are also ISPs you can see that there are conflicting issues, make money off the content while offering reasonable peering services as an ISP. This goes back to the idea that the Internet is a utility, therefore should ISPs provide paid information services? In this case Netflix seems to have caved and set a horrible precedent by paying for peering services that should have been a matter of normal peering agreements.
3. FCC is weak to ineffective and has repeatedly been cut off at the knees. The recent court ruling concerning the communication services rules that the FCC had applied to the Internet, the FCC made a serious blunder in the specifics of their approach (not using “common carrier” language) and, in a ruling that was no real surprise, lost. Instead of applying the obvious basic criteria to the Internet (treating it like any other utility) the FCC chose to call it “enhanced services” or now more commonly information services, something that all of the major ISP’s obviously supported. The mistake, besides the overarching classification came in the recent attempt to undo the mistake and apply common carrier rules anyway. In 2010 the FCC lost to Comcast in a case that started with Comcast throttling specific content. The FCC attempted to prevent the throttling and while Comcast agreed to the ruling, it challenged the FCC in court and won on the grounds that it was not subject to common carrier regulation as an information services provider. While the recent rumors were that the new FCC chairman Tom Wheeler was planning to revise the rules significantly in favor of net neutrality, unfortunately Verizon’s court case challenging the same rules as Comcast went the wrong way before anything significant could be done. Verizon, just like Comcast, won. The current situation then, leaves the ball in the FCC’s court, but would require them to do what they’ve failed to do over the past 34 years, that is, officially classify the Internet under the common carrier rules as a utility. The ISP’s are the pipes, the information services are something quite a bit different.
4. The US wireless / mobile broadband situation is a mess. Take what I’ve said about the ISP’s and make that 10, no maybe 100 times worse for mobile broadband with it’s outrageous proving and it’s tightly managed data caps. In Jan of this year, AT&T took this whole mess up a notch by offering developers and brands the opportunity to provide sponsored content. In other words you can pay for preferential treatment on AT&T’s pipes and get your content to mobile devices outside the data caps. While on the outside this might sound like a good thing, it’s in reality another threat to the open Internet. The only real hope for the US market comes in the moves by the “anti” carrier, T-Mobile, whose emergence from the failed AT&T merger has finally created a carrier that is aggressively taking on it’s competition and offering radically different services.
5. Paying more for less: That’s just how the current Internet provider market is set up in the US. In a market where market dynamics doesn’t drive competitive pricing and innovation that’s just what happens. The US has some of the slowest connection speeds and yet is among the most expensive markets for broadband in the world. I could show chart after chart to demonstrate that, but this BBC article will suffice to demonstrate the problem.
We have a serious problem in the US and that problem can extend to a global one, net neutrality is under attack. So what can we do? We all have to put as much pressure on the Federal Government, particularly the FCC to step in and provide the kind of regulation that is needed to keep (or make in some cases) the Internet open to all. The current attacks on neutrality, the Comcast / Time Warner merger, sponsored content, pay for play, caps and the paid circumvention of those caps, etc. are a real threat. We can only hope that the FTC’s current antitrust investigation will once again, just like the T-Mobile / AT&T deal, prevent something that will clearly not be good for consumers. We can also hope that the FCC finally steps in and defines the industry in a way that enables them to effectively protect the open Internet.
I was having a conversation the other day with a colleague about trends that are impacting and driving change in businesses and as often happens lately we ended up on the subject of business networks. When discussing new concepts we have no choice but to apply words that have existing, accepted meanings, even if those terms don't quite fit what we're trying to say, and add other adjectives to help translate the picture that you have in your head to mutual understanding. For the last few years, as I've focused my research more and more on emerging trends in the enterprise, I've found this task very challenging. Using the word social in some business context for example, is fraught with issues as people try to shoehorn their own understanding of the word into some new frameworks. The word network, I've learned, is another ambiguous term when used in a business context. It seems that the word's techie baggage, while appropriate to some extent in understanding where I'm trying to go with this idea, causes some confusion. The challenge then is to find the right adjective(s) to start to move people in the right direction, or perhaps, even though it's not my favorite activity, delve into a more detailed definition of business network.
The problem with the word network is also part of the strength of applying it to the current emerging business environment. From IT networks that are flexible, scalable, configurable, fault tolerant, accessible from multiple points and on multiple devices, we can borrow concepts that businesses need to begin to apply more broadly. The downside I think, to using the word network is that when many people hear the word they start to think of the physical connectors, the Ethernet cables and routers, etc. that make up the LAN or WAN and that's very limiting. Or perhaps they think of it in terms of the social web, which can also be distracting even though again some of those characteristics apply.
Sitting in the Philadelphia airport early this morning in one of those inviting white rocking chairs they provide, sipping a cup of tea and prompted by the sight of so many people connecting and carrying out business, I had an idea. When I think about business networks in the context of all of the other technical and cultural change factors that I see in our post-industrial information economy, maybe what I mean is "organic business networks". The word organic could be confusing though, but when I think about it in this context I am thinking that it has similar traits to organic computing. Organic computing is a computing system that is self-optimizing, self-healing, self-configuring and self-protecting. More broadly organic models are generally patterns and methods found in living systems used a metaphor for non-living systems. So applying an organic model, organic business networks are networks that represent the interconnectedness of the emerging information business environment. Organic business networks connect people, data / information, content, and IT systems in a flexible, self-optimizing, self-healing, self-configuring and self-protecting system. People are the primary nodes of the network but the other nodes, data, content, applications and systems, are no less important.
A business functioning as an organic business network would incorporate the characteristics of a social business, as I listed here, but go beyond this basic idea, using social business as the operational paradigm but using the organic business network as the mode of operating it's business. The two concepts play off each other, social business is the "what" and the "organic business network" is the how. An organic business network lets the business work outside of traditional "firewall" boundaries and is the continuously adapting implementation of an optimized business strategy. In this approach value creation can move to the optimal point in the network depending on strategic influencers like economy, market dynamics, customer behavior, prospect behavior, partner behavior and needs, supply chain dynamics, predictive business outcomes, etc. An organic business network driven company is the anthesis of a hierarchical, rigid, reactive, process constrained, and silo'ed organization. Instead the business can adapt to changing conditions, leverage assets effectively and thrive in a hyper-connected, global competitive, information driven environment. What do you think, does that add a little clarity?
The fun thing about trying to figure out what might happen next in software and business in general is the ability to evolve your thinking over time as you gain more data and more clarity. I suppose that's why IDC's tag line is "analyze the future", that's effectively what my job is, at least a large part of it. Sometimes the process is sort of like putting together a puzzle that is mostly blank pieces, but the pieces slowly reveal themselves to you over time. The more pieces you reveal the better the overall picture becomes. Ok, enough rambling around inside my head, what's the point of this anyway? The point is this, I started a few years ago thinking and talking about social media, social networking and enterprise 2.0. That evolved into social enterprise which I used to mean the combination of e2.0 and social CRM and eventually we started calling the movement social business. As a part of social business I started to dig into a concept that I think is an important key to understanding what is happening, that is, in the transformation of business people become the new enterprise platform. That people-centricity is absolutely critical to understanding and building the processes and systems that facilitate the social business transformation. I'm starting to think though, that social business is really just a part of a bigger thing, the people-centric enterprise.
People-centricity defines our current social and business progression past the industrial society's focus on business, technology and process. Not that business or technology or process go away, but instead they become supporting structures that facilitate new ways of collaborating and interacting with customers, suppliers, partners and employees. The idea also has to permeate system and process design. Here's a simple example from collaboration systems. In the past collaboration was more often that not defined as the ability to share and work on a file, so let's call the system file-centric. File-centricity defines the core of how the system works, it's core workflow. In the defined process you create a file, upload a file, share a file, edit a file, review a file, approve a file, etc. So as long as the collaborative work is about a file the system process is fine. What happens though, when I need to deal with a customer who calls in a service issue, the product they ordered from their account executive is on backorder and won't meet a critical deadline? I probably start by logging the issue in my CRM system of course and then maybe I look up the order history in the order management system...so far so good, I'm doing system-centric tasks. But if the answers are not clearly in the system the work changes. Maybe there is conflicting information in the system so I have to talk to the account executive or the warehouse supervisor (phone, IM, do we have presence or unified communications...email). Perhaps it's a logistics problem or a production problem...all of these are people-centric tasks. From a system perspective the customer service rep needs something to bring interaction with systems, information and people together, not a file.
Working with customers, internal and external business partners, suppliers, logistics providers, at the core they're all people-centric issues. Not that you don't need to share files or work together on files, co-creating documents, sharing information, all of those things support the work and need to be accounted for in a collaboration system, but the focus is on enabling people to people interaction. This concept also extends to process. Current systems do an adequate job of facilitating work process (one might argue some systems are much to rigid, but that's a topic for another post). The problem arises when the work doesn't fit the process. Workers today often spend much more time on problems that fall outside of the business process, or exception processing. Exception processing often involves working outside of systems and gathering temporary teams to work through the issues. These ad hoc work requirements are a necessary part of the business but can take an inordinate amount of the resources. Because they tend to be people-centric, most fall outside the enterprise systems and processes. We need collaboration systems that are social, or people-centric and capable of effectively dealing with the ad hoc nature of information-based work.
This extends to most enterprise systems as well. Project management is really about executing against a plan, or in other words about people working together to accomplish some end goal...which is by its nature social or people-centric. Content management is file centric but if you step above the files and start to think about curation of content, people are once again the key to accomplishment. Many enterprise tasks today have moved to a more people-centric method and the systems have not caught up.
So where am I going with this train of thought...I'm not sure yet. I do know that the concept of people-centric enterprise is important and that it needs to be built into our systems and processes. The shift in focus from process and technology to people is the key to working in a post-industrial information driven business, IMHO. I'm starting to think about a broader research project to try and tie this together across the enterprise and across the underlying systems but the thought is only just starting to come together.
M & A mania is heating up among social solution vendors. Attensity and Biz360, Lithium and Scout Labs, both increasing solution footprint and platform reach. For the last several years start ups have been springing up building out social business solutions and platforms. As is often the case, these new companies initially focused on a narrow part of the overall social business landscape. As they gain momentum (and customers) they learn what adjacent solutions their customers are seeking and start to look at expanding their footprint. This is a natural progression in tech business and something we've seen over and over. It seems that social business has reached the stage where customers are realizing value from their initial deployments and are looking to do more and carry their success farther,
Lithium's focus is on providing a complete social CRM platform for building and managing social support communities. While feature rich, with community management, mobile, knowledge base, reputation engine, content moderation, workflow, profile management, analytics and connectivity with leading CRM solutions, its focus was on the private label or branded customer community. With the proliferation of public social media and network sites and the growing popularity of using those sites for everything from purchase decision research to product support advice, it became obvious that the branded customer community was only a part of the complete picture of supporting and interacting with customers. The addition of Scout Labs' platform to the Lithium platform combines the branded community platform with a platform to monitor, measure and manage interactions on the public side of the social web. Now the branded support community can add the capabilities to hear what customers are saying in real time on public social networks and media channels, better monitor, understand and reach out to influencers outside the community to build relationships, add proactive customer support and engage customers more effectively in new product and marketing ideas with both platforms in the cloud. This holistic view of the customer, especially in the area of support, is essential and really starts to provide support to customers when, where and how they choose, which is IMHO the most important shift in thinking for effective social support initiatives.
Content of any type is not useful unless you can find it, organize it and interact with it. In the enterprise companies have tried many different schemes to try and get business content collected in a central repository, organized, tagged, version controlled, and searchable. This has often taken the route of "content management" systems. Content management systems to varying degrees, do an adequate job of getting some content into a controlled system environment. There are challenges with content management systems on two fronts though, getting content into the system in the first place (getting employees to participate in inputting content in some way) and getting the right content into the hands of the person who actually needs it. Search helps find content and tagging can increase searchability of course, but the whole system is only as good as the ability to input and tag the content, which inherently requires broad participation. To me it seems that the problem isn't management of content but the opposite, liberation of content.
Curation of content is a concept that is gaining momentum across various media types online. If you want to learn more about curation you can check out CurationNation. The idea though, revolves around involving human interaction with content to filter and organize. Combined with the power of the social web, curation has the potential to change the way we collect, consume, organize and share content online. Socialization of content could take the form of curation if a social system was applied to the process.
I had the pleasure this week of chatting with Patrice Lamothe, CEO of French startup pearltrees and since that meeting joining and using the pearltrees system. Here's a screenshot of my account:
The concept is fairly simple really. Pearltrees is a social network with tools and processes to capture, organize and share web content or pearls. As you browse and read things online you can capture those "things" in your pearltrees (web pages, blogs, Tweets, etc.). The social aspect of pearltrees then allows your content to be viewed, searched and linked together by others with similar interest. You can add pearls from others into your trees and share the pearls in pearltrees, facebook, Twitter, email, permalink and also embedded in other web pages. Here's an embedded pearltree from my account:
Overall I'm starting to think that pearltrees is useful and that curation or socialization of content has a lot of application in the enterprise. An enterprise private label version of pearltrees, although not available today, could form the center of a social content process that would address many of the current content challenges for businesses. I'm enjoying using pearltrees for my own research although I'm looking forward to a non-flash version so that I can use it on my iPad, which has become my primary content consumption tool. (They are working on an HTML5 version for later this year)
Although it may have gotten a little lost in the noise created by the Salesforce.com / VMware announcement of VMForce the day before, yesterday Attensity made what I believe is an important announcement in the social business market about their acquisition of Biz360. Socialytics, as I've discussed before, is becoming a business imperative as we create more and more social data and as the social customer and social employee gains more influence over the fate of a company. The social web gives voice to the involved individual and creates network effect to magnify influence. As a company you have to look to technology for ways to collect, filter, analyze, and create actionable information from the mountains of social data generated on the social web. That social information and its intersection with existing corporate information is business critical in todays hyper-connected business environment.
So why is this an interesting acquisition? Once again the whole (combined company) is greater than the sum of the two parts. Attensity is a leader in web 3.0 semantic analysis and natural language processing (NLP) technologies applied to business problems through a set of applications that enable deep data analysis and decision making support. Biz360 has developed three socialytic applications on the Market360 Platform, Media Insights, Opinion Insights and Biz360 community, that aggregate and analyze traditional and social media channels to provide insight into customers, influencers, financial / investment community and the press / analysts community. The combination of Attensity and Biz360 provides a complete, self-service socialytic platform that "collects" data, filters, analyzes and provides output information to support actionable business decisions across multiple interaction channels. In other words, the solution supports social CRM strategies across sales (predictive selling), marketing (sentiment analysis) and customer service (multichannel customer conversations and customer knowledgebase enhancement). These same capabilities could also be applied to internal social data for use with employees, as well as applied to social programs for suppliers and partners. Social business is about changing business culture and about engaging in the conversation, socialytic technologies like the new Attensity SCRM solution can be an important enabler in this process.
For some time now I've been thinking about the whole generational categorization scheme that always gets a lot of coverage. The idea that certain age groups have some common traits has been around for a long time I guess. We have Boomers, Gen X, Y, Z, Millennials, etc. Now I suppose there are commonalities that are shared because of the external factors that exist during the time when someone grows up, but I'm starting to think that age may not be as important in the emerging connected world that we inhabit. I hear often enough that web 2.0, social networking, social (fill in the blank) is for the "kids". It most often comes from a business person that is trying to deny that business is being impacted by the social web, a defense mechanism of sorts. We get it in comments on our surveys and in person but it does seem to happen less and less.
More and more I see commonality between people who are very active on the social web and who tend to be fast adopters of technology. While my daughters are certainly digital natives (ages 14 and 11) they are no more involved in the social web or with technology in general than I or many of my friends are. I'm starting to believe that there's a cross generational trend that is creating new common traits that are shared across a broad group. At first I was calling this Gen "S" for social but I've noticed lately others talking about the same idea and applying the label of Gen "C". As I thought about this more I think that in fact the key to this new "generation" is its hyper-connected lifestyle. Certainly the social web is playing into this trend and helps create the common traits but its really the interconnected nature of the members that is causing the cross-generational nature of the movement. Here are a few recent facebook demographics that demonstrate this (from istrategylabs.com):
I was working on a Prezi for a presentation next week by the same title as this post and as I worked through the flow some ideas that had been hanging around in my head sort of came together. The nature of an analyst is, I suppose to try and fit things neatly into a taxonomy, especially technology. We've tried to sort out social business in those terms over the last year but in many ways it just won't fit, mostly because the technology is secondary to the overall business cultural change that is the real focus. That said, I have started to fit things into three categories and now that I've done it visually I think it might be useful to share. The three broad categories are technology enablers, social output and social outcomes.
Let's look at tech enablers first. These fall into three categories, social platforms, social applications and embedded social features. Here is an excerpt from the Prezi that explains this in more detail:
The next focus area is social output. These fall into two categories (at least), social media and social networks.
And lastly the outcomes, customer engagement, employee empowerment, partner enablement and supplier engagement.
And lastly I've embedded the entire Prezi so you can see this in context. Some of the introductory material you might recognize from my recent Directions Prezi but I think the whole flow is useful. Also, if you haven't heard my CardScan customer service story, which is only represented by a pic in the Prezi, then the short version is that I was turned from a disgruntled customer to a brand advocate through rapid service via the channel I preferred, Twitter. Take a look and let me know what you think:
A lot of the current focus on social business revolves around social CRM and customer initiatives. I guess that's not surprising since it is both a customer driven imperative as more customers adopt the social web, and also an area of quick and obvious business benefit (when done correctly anyway). I have this nagging feeling though, that approaching the transition to a social business from the outside in may not be the best approach. After all, the social customer that we hear so much about is also becoming the social employee, and I wonder if you can really successfully change your relationship with your customer when your own organization is "unsocial"? How can you, as an organization develop a meaningful and ongoing conversation with customers when your own organization is so silo'ed that marketing doesn't talk to customer service or product development doesn't talk to sales, etc.?
Don't get me wrong, I'm not suggesting that you can't or shouldn't start to engage customers in new and different ways, in fact I believe it's a must do action. Social customers are creating a wave of change that will be increasingly difficult to resist. What I am suggesting is that you also need to start to deal with the overall cultural transformation that is happening and address internal issues as well. Here are some ideas:
- Build a social company policy (see this post for ideas) and train your employees on what you expect.
- Liberate the content. Get data into the hands of the people who need it to get their jobs done. Old content management (read content protection or lock up) isn't the answer. To turn content or data into useable information it has to be easily accessible. We need people centric content tools, not file centric.
- Look at incentives: do you reward individual or group efforts? Are employees incented to work together and share? Do you establish common objectives and goals?
- Where are decisions made, only at the top or throughout your organizations?
- Who owns social in your company? If your answer is marketing (or any 1 existing department for that matter), which is the most common answer by the way, I think you have significantly greater challenges succeeding with your social initiatives. I believe you need a new approach to bringing social into your company, and that the initiative needs to be led by an empowered leader on par with your CIO.
- Social tools are already being used in your company. Yes I know you may think you block them on your network, but trust me, you have not stopped your employees from using available social tools for business. Take inventory of what's being used and why. More than likely you will find that employees are working around systems that simply are not getting the job done. You can't address this by shutting things down or punishing employees for doing what they believe they must to get their jobs done. Instead use this momentum to correct issues and bring the work-a-rounds out into the light and figure out real solutions to these problems.
Technology won't change your business culture. There are a lot of tools though, that can assist in the transformation. From an internal perspective we need to focus on people as the platform and enable them to interact with each other, with content, with data and with systems in a paradigm that resembles current consumer Web 2.0 tools. There interfaces have proven efficient and effective. One of the places to start then, might be with a social collaboration tool like Salesforce.com's Chatter, Novell Pulse or SocialCast. Breaking down the walls around people, content and data are critical to the broader concept of removing silo'ed organizations and engaging with external constituents more effectively (customers, suppliers and partners). Oh, and the tools better support mobile...