CTO Blog
Remarkable isn’t it? We are now approaching a time when a new technology has become a commodity, and I will define what I mean by that term, even before a fair selection of the IT profession have even heard of it, let alone used it! The gap between the existing implantations, and methods, of what I will call corporate IT, requiring the full time attention of IT professionals and the ‘open’ for anyone to use capabilities of Web 2.0 is getting bigger and bigger. Put crudely too many IT professionals are finding themselves locked into, and too busy with, having to maintain the existing IT systems to find the time to understand how to use the new technologies.
So on that basis how is it possible to say that a piece of new technology has become a commodity? A term generally accepted to mean that the skills to implement the technology are now so widely understood that the price of an implementation has, and will continue, to fall. My new definition for commodity is based not on the commoditisation of the knowledge element becoming universal, thus removing the price premium, but on how the technology is supplied and used.
The new definition is based on the standardisation of the technology in a manner that means little, to no, specialised knowledge is required to use, and that because of this, the availability of product is enormous as any number of people can produce it. The key to how it is supplied becomes the emergence of a relatively new role of ‘broker’. Okay maybe not so new as a term, but the new brokers are not ‘wholesaling businesses’ buying and selling product, but relationship managers to a community with shared interests in the technology. The value proposition is based on how they aid value to the community not on stock availability and price.
Going back to the MashUp topic, very quickly the whole idea of what is, and how to build a MashUp has grown up, and it’s no longer necessary to use a toolkit supplier by someone like Google to ‘roll your own’. Sites like www.mashup.com offer the simple formula that a Mashup = API x plus API y, and then publish lists of APIs, more than 120 at this time, and growing ever faster. How do they gain a commercial benefit from operating the site? Well first the costs are very low, but the model is intrinsically like that of an Open Source Distribution making money on the support.
In this case, and there are others, www.mashable.com, etc, the not so immediately obvious fact is that the APIs in question have been tuned, and checked to work together within the sites simple MashUp formula. So it’s a ‘sticky’ community that encourages both people to come there for their APIs, and for others to build APIs to the formula. Now this opens up the possibilities for some additional serious MashUp linkages that are real chargeable commercial propositions supply uniquely valuable information to supplement the ‘free’ API based MashUp.
By this point my argument about commoditisation should be coming clearer. In summary; it pays to commoditise a product by removing the barrier of skill; the business model does not lie in the sale of the commodity product, or code, it lies in the support of the solution; the more you start to use MashUps based on the ‘free’ APIs probably integrating publicly available data, the more you want serious heavy duty differentiated sources to add to your MashUp and increase its value; or conversely as a business the more you want people to use your data as a source the more you will want to offer ‘free’ APIs to get them started; ‘free’ API based MashUps prove the value and lead to the desire to pay for unique source APIs.
Sound familiar? It’s all an interesting blend of what we have seen occurring in ‘free’ versions of software that develops the interest for the commercial version which is chargeable, and the use of Web 2.0 to promote communities of interest where the community owner makes money by providing support services to the community users. And it’s all being applied right now to ‘commoditise’ MashUps, and that’s what I think is really the driver for the explosion in use by users, and the comparative invisibility to professional IT managers who are used to getting their technology in a different way.
About the author
Capgemini Global Chief Technology Officer, Andy is a member of the Capgemini Group management board and advises on all aspects of technology-driven market changes, together with being a member of the Policy Board for the British Computer Society. Andy is the author of many white papers, and the co-author three books that have charted the current changes in technology and its use by business starting in 2006 with ‘Mashup Corporations’ detailing how enterprises could make use of Web 2.0 to develop new go to market propositions. This was followed in May 2008 by Mesh Collaboration focussing on the impact of Web 2.0 on the enterprise front office and its working techniques, then in 2010 “Enterprise Cloud Computing: A Strategy Guide for Business and Technology leaders” co-authored with well-known academic Peter Fingar and one of the leading authorities on business process, John Pyke. The book describes the wider business implications of Cloud Computing with the promise of on-demand business innovation. It looks at how businesses trade differently on the web using mash-ups but also the challenges in managing more frequent change through social tools, and what happens when cloud comes into play in fully fledged operations. Andy was voted one of the top 25 most influential CTOs in the world in 2009 by InfoWorld and is grateful to readers of Computing Weekly who voted the Capgemini CTOblog the best Blog for Business Managers and CIOs each year for the last three years.
It’s funny because a webmaster can take two seperate sites and mash them together and create his own business from them. This is a new phenomenon because in the past, this was a clearly illegal method of business – but nowadays it seems accepted.
I have been around MashUps for a year now and this is the first time that anyone has raised this point.
Stunning thought Joost
another thought:
SOA is making your own business MashUp-able.
Or should be, because what I’ve seen so far are pretty closed solutions.
Google is getting it and most financial intitutions don’t.
we can recognise that as one answer but we also believe that MashUps equally offer the opportunity to develop a new generation of business capabilities that will be of considerable value. funnily enough in financial trading markets the individual dealers do ‘get it’ and are creating and using their own mashups.
My story of a mashup:
I basically wanted to learn the GWT and created a mashup for Google and Zillow at http://www.gandalf-lab.com/com.gandalf.gwt.HomeValueApp/HomeValueApp.html .
Turned out that when the Zillow guys came to know that I hacked with their HTML output to get the information they threatened to sue me.
The discussion went to the level of their Founder and finally they gave me a key to their API.
When I was interacting with their Director level guy , he was bent upon getting my site down because of legal clauses between Zillow and its data provders. The potential of screen scraping the information and using it without Zillow knowing about it was his concern.
So yes , the legal concerns are not trivial.
That is a truly concerning story and shows that in a sense we are experiencing the same difficulties as with open source in combination with commercial software. once again i wonder if the law in intellectual property is keeping up with the speed of technology change
Just a note to the terms ‘free’ and ‘Open Source’:
We have to be aware of the fact that ‘free’ and ‘Open Source’ are not synonyms at all. (What most IT people call ‘Open Source’ we should rather call ‘Free Software’ to name it correctly, btw.)
FSF, the Free Software Foundation, defines Free Software in term of liberty, not the price one has to pay for it:
http://www.fsf.org/licensing/essays/free-sw.html
The somehow distasteful use of Open Source in todays IT businesses is somewhat like: ‘Go look whether there exists an Open Source solution for our problem before we start coding’, hoping that there is something out there we can use for free without limitations and make the most profit out of it.
No-one thinks in terms of fairness when we talk about ‘Free Software’. But we should: Someone invested know-how and energy into building that piece of software, so if we use it, build on its functionality and maybe enhence the damn thing we have to give something back in turn to the Community, naturally.