The Web is old news by now.
“Why do you say that?” you ask.
The answer is simple. It is now called "Web 1.0."
“Who calls it that?” you might query.
Simple answer. The new generation of digital natives and the industry that supports them. The new Web is here, and it is called Web 2.0. What is new and what does it mean to the world (and accountants)? The answer is that this transformation will be even more dramatic than the rise of the Internet itself. Web 2.0 is a paradigm flip, in which the role of applications and the information that supports them exchange hierarchical roles. The information drives the new world; the applications serve as “plumbing.” Software becomes a service, and social networks, communities and users act to shape the work that is being done and how that work is done.
This is bold stuff, so let’s step back a moment to define the landscape of this new world. It all started when early Web Technology visionaries like Tim O’Reilly began to talk about the rise of the Web as a platform that could replace the computer as the place where applications ran and processed data. If the “network is the computer,” as proposed in 1984 by one of Sun’s founders (John Gage), then the new applications would run above the level of the computer itself. This would lead to an entirely new computing architecture and an entirely new user role and set of behaviors.
Information processing and the computing power to do the processing moves to the “Cloud,” a virtual realm on the World Wide Web where things happen based on real-time communication, messaging and event handling. Virtual machines support a new concept known as Software as a Service (SaaS), which is as different from traditional IT thinking as a stone tablet is to an iPhone.
When you couple the “Cloud” to SaaS and tie in the user as a member of an integrated social network that can make personal demands on the system as well as influence the way the system works, you move in to a realm of technology that is actually larger and more complex than the human brains that spawned it. Estimates are that the volume of information is doubling every two years, and this growth is accelerating it. Every day there are more documents, blogs, podcasts, images, videos, music and other kinds of data being created and stored on the Internet. The only way for us to not be overwhelmed by the sheer volumes of data will be an evermore efficient way of storing, indexing, organizing and retrieving it. Companies like Google and Yahoo! will maintain their value by these abilities more than the asset values of the information itself. As the Internet grows in complexity, it becomes “smarter” in that it enables us to use more and more complex information in simpler ways.
While we are not yet at the point where SkyNet will build Terminators and destroy mankind in a fit of technological logic-based fury, we are on the edge of having the technology change everything that we do with it. Look around. We have Facebook, Second Life, Blogs, Podcasts, Mashups and the like. Social Networking and Communities and Instant Messaging are changing the way we work and play.
Several months ago, my 16 year-old son’s text messaging bill on his cell phone went over $200. He had generated thousands of text messages (this was before unlimited text plans). We immediately took texting off of his phone as punishment for the abuse. A week later, he announced that he and his girlfriend had broken up. When I asked what happened, he said, “You happened. When you took away texting, I was no longer able to communicate with her!” Whatever happened to “talking” to a girl?
The point is that there is a behavioral shift. We text, Google and GPS search our way in a world that is part real and part virtual. We demand information and response right now, wherever we are. I emphasize the word demand, because this is the level of user expectation from the technology and the suppliers of that technology.
So Web 2.0 is the new landscape upon which information and processing will be delivered in real-time to individuals based upon what they need when and where they want it. This is not how traditional computer applications were designed. This is not an upgrade, but rather a re-architecturing of the way in which technology is used.
What does this mean for vendors of software? First and foremost is the realization that the concept of installing an application on a computer and having a licensed user run that application is “old world.” The application (even if you still want to call it that) must now be delivered “virtually” as a service using the Web as a platform. Imagine running Microsoft Word as a SaaS entity. You would walk up to a device (computer, terminal, Xbox, iPhone), enter your identity/authentication codes and connect to a web-delivered version of the product. Based upon your identity state, you would securely be connected to your documents and the documents to which you are a shared community member, which are stored “somewhere” in the cloud. You install nothing on your device. Your identity drives access, rights and privileges, and billing. You work, save your work, send e-mails, and import images and spreadsheets. And you are doing it “out there” instead of on your desktop or laptop.
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