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.