Web 2.0 briefing paper

Transcription

1 Web 2.0 briefing paper Have you heard of Web 2.0? If you surf the internet or keep in touch with online news you may have heard about Web 2.0. It s not a new software release and it s not a game on PlayStation or Xbox. As a salesperson for a technology company, however, you should know a little more about it. This briefing paper presents different perspectives of Web 2.0, to help salespeople understand what it means. You will encounter several new terms in this paper, so either start by reading the list of keywords from page 5 onwards, or refer to the list as you go along. What is Web 2.0? Web 2.0 is a term that describes a concept in internet communication. The term was coined by Dale Dougherty a web pioneer and given popular exposure in 2005 by Tim O'Reilly the founder of O'Reilly Media and supporter of the free software and open source movement. A report titled What is Web 2.0: Design Patterns and Business Models for the Next Generation of Software heralded the beginning of worldwide interest in the topic. The discussion and debate about Web 2.0 and the implications for global businesses are interesting topics for salespeople. Web 1.0 to Web 2.0 examples It is useful to compare examples of Web 1.0 and Web 2.0 to get an idea of what people are talking about: Keep in mind that the boundary between Web 1.0 and Web 2.0 is conceptual. Different people may have a slightly different view of where the boundary lies, according to their interpretation. It highlights the need to adopt an approach to Web 2.0 that facilitates discussion and creates common ground, rather than using the term as a meaningless 'buzzword' for advertising purposes. Web 2.0 as a platform O'Reilly describes Web 2.0 as a core platform, acting like a gravitational force on the surrounding space. The core platform has a set of principles and practices. In the surrounding space, sites that demonstrate some or all of the principles and practices are attracted at varying distances from the core. The core platform has distinctive competencies: Services, not packaged software daily operations are maintained and enhanced by dynamic and transparent software updates An architecture of participation users participate in the development processes and add value to the services Cost-effective scalability user participation is leveraged to expand services Remixable data source and data transformation developers are encouraged to reuse (even hack) the existing software source code to create new pathways Software above the level of a single device not restricted to a single PC or even 2 PCs a host server and client PC and browser the platform supports services across multiple computers Collective intelligence is harnessed links and methods to engage users are vitally important to encourage user participation and trust. 1

2 Web 2.0 in business Apart from examining the core platform characteristics of Web 2.0, there are other ways to understand it, especially from a business perspective. Structural elements A web business relies on 3 structural elements and their behaviour in the global market: Business model Information model Technology Responds to changes in the target market and regards the web as a utility. Responds to changes in the flow of information. Responds to technology trends on the web. A Web 2.0 business is an integration of the 3 structural elements, each depending on the other. If you look at the transition from Web 1.0 to Web 2.0 in the context of business model, information model and technology, you can see how Web 2.0 businesses have emerged: The changes in each structural element are summarised below: Business model from shop to long tail/ service oriented business In Web 2.0, the business target expands and small sales to low demand, niche consumers accumulate. It leads to big sales volumes. A web business is not restricted by the physical space of the shop and warehouse. It uses web facilities and the information flow to attack the long tail market. It also moves single, isolated business functions to an integrated web service, as information infrastructure. For example, Google ( ), Google Local (map), Google Reader (RSS/ATOM reader), Writely (word processor), and Num Sum (spreadsheet). Information model from 1-way silent information to active mixed information Mushup the mix of 2 or more information sources to offer value-added information makes it possible to construct websites in a short time, at low cost. They are designed to attract user participation, promote word-ofmouth communication, gather information and use the wisdom of the crowd to continue the information flow. Technology from static text content to active website The technology of Web 2.0 is not really new, but the way it is used gathers momentum and creates new connections. Information circulates with fewer technical limitations, creating extremely efficient communication channels between individuals, and thereby reaching a much wider audience in a very short time. 2

3 Shift in major players in the web world In the Web 2.0 world, there is a shift in the major players, from corporations to the individual. The interaction between the players is also different, affecting information content, the relationship between businesses and consumers, and the cash flow. The role of individuals is dramatically changed. Before Web 2.0, information was sent out from businesses and advanced users. Audiences simply received them. With Web 2.0, everyone becomes an information originator. Collectively, the short comments by the individual (word-of-mouth communications) become large enough to influence others. This Consumer Generated Media (CGM) is powerful. Flow of cash and information The flow of cash and information between consumers and businesses highlights the different interactions in the Web 2.0 world: Flow of goods The flow of goods to consumers may also take a different path in the Web 2.0 world, via drop shipping or affiliate : 3

4 Comparison of drop shipping, affiliate and netshop A comparison of the characteristics of drop shipping, affiliate and netshop Web 2.0 businesses highlights the strengths and weaknesses of each one: Drop shipping Affiliate Netshop Sales vehicle Drop shipping trader Personal blog Netshop Netshop Price setting Available Not available Available Customer list Held by Sales Manager Not available Available Profit % High Low High Inventory risk None None Large Purchasing cost None None Large Web 1.0 to Web 2.0 communication To understand Web 2.0, it is useful to compare the trends in communication from Web 1.0 with Web 2.0. These trends are most obvious in the media, in advertising, and in the level of service available to everyone. Media trend This refers to the media trend from oligopoly where the media consists of a small number of players to open media. In Web 1.0, websites broadcast or publish information on the internet. Large databases store the necessary information for visitors. In Web 2.0, individuals are participating in blogs and social networks, creating web communities. Large numbers of people are expressing and hearing personal opinions about all types of information. People are also creating new meaning for themselves by participating in public internet forums. Advertising trend In Web 1.0, companies purchased banners on popular websites to reach a mass audience, like traditional billboards and TV commercials. In Web 2.0, advertisements are linked to search facilities, like Google s AdSense. The advertisements offer information specifically targeted at the individuals who are searching and who are most likely to be interested. With this search technology, very narrow or niche markets gain the best opportunity to promote themselves. Level of service trend Web API technology common in Web 2.0 means that information from other websites for example, maps and weather forecasts can now be built into personal websites, without copyright problems or conflicts of interest. More websites are connected more efficiently, while the independence of each one is maintained. This high level of service raises the standards and expectations of everyone who participates. Both positive and negative aspects of Web 2.0 apply to participants: 4

5 What s Web 2.0 got to do with me? Many people have an opinion about Web 2.0. To quote Web 2.0 expert Mr. Pierre Omidyar, who is the founder and chairman of the ebay auction site: Web 2.0 is about putting the tools in peoples hands, making them widely available, letting them work together, share and collaborate. Start with the belief that people are good, connecting them together is inherently good also, and it will change the world. Web 2.0 is a self-perpetuating phenomenon. It is alive within the web world, yet it reaches out beyond its virtual boundaries to influence the real world. As a salesperson, you may wonder how Web 2.0 will affect your career and your success in the real world. The effect may depend on how successful you are at leveraging the power of Web 2.0 for yourself. Consider these points: Customers research Ricoh products and solutions on the internet before and after they talk to you. Are you aware of the full range of websites they may access for information and opinions? Salespeople conduct research about their customers and competitors on the internet. Have you developed your internet skills to a level that matches your customers and competitors? Ricoh products and solutions are closely associated with computers and computer users. Do you harness the advantage of this computer experience in your business relationships? Web 2.0 has its share of detractors who are cautious about its ability to change the world or even about its limitations as a business breakthrough. Blogs, for example, belong in the Web 2.0 world, yet it has been suggested they are ephemeral, poorly read and likely to join other fashionable habits that have reached their expiry date. However, while blogs suffering from neglect are obviously of limited value, well-managed blogs create access to new communication channels. Ricoh s corporate blog for Ricoh s GR DIGITAL cameras ( is an example of how Web 2.0 can be used to get feedback about Ricoh products and service. Ricoh also supports Web 2.0 technology by providing Embedded System Architecture (ESA) in its multifunction products (MFPs). This open system means developers can customise MFPs to meet their customers individual needs, providing flexibility to scan and print how and when the customer wants it. An encouraging aspect of the Web 2.0 world is the freedom to explore alternative perspectives. This open approach has more positive than negative outcomes for successful businesses. For example, businesses that try to promote themselves with false information are usually uncovered by word-ofmouth and may face negative exposure in a public forum. Businesses that opt for a transparent approach to their products and services are more likely to win over the wisdom of the crowd and reap the rewards. As representatives of their business, Ricoh salespeople can learn from the Web 2.0 world and make it work for themselves. 5 Use Web 2.0 yourself If you would like more information to help you understand Web 2.0, you can go online and use the power of Web 2.0 to discover more. Try these starting points: #_Toc #many Alternatively, start your own personal blog. Get help by searching on how to start a blog in Google. Web 2.0 keywords Understanding Web 2.0 involves understanding several keywords that you may not have heard before. Use this list of keywords to build your Web 2.0 vocabulary: Affiliate An agent who refers customers to a seller and collects a fee for the service. In an e-commerce environment, an affiliate company usually hosts a website link. Common in the hotel and travel industry. AJAX Asynchronous JavaScript and XML. A web development technique for creating interactive web applications, made popular in 2005 by Google. API Application Programming Interface. A language and message format used by an application program to communicate with the operating system or some other control program, such as a database management system (DBMS) or communications protocol. It implies that some program module is available in the computer to perform the operation or that it must be linked into the existing program to perform the tasks. Blog An abbreviation of web log. A blog is a journal that is frequently updated and intended for general public consumption. Blogs enable users to instantly publish short comments and ideas for other people to read. CGM Consumer Generated Media. This is when word-of-mouth communication becomes big enough to influence others. It contrasts with traditional media, where consumers receive information passively.

6 Drop shipper A retailer who does not keep goods in stock, but instead transfers customer orders and shipment details to wholesalers, who then ship the goods directly to the customer. The retailers make their profit on the difference between the wholesale and retail price. Enabler company An enterprise that develops and supplies services and merchandise to interested buyers. For example, manufacturers and publishers. Folksonomy A term to describe how users categorise and tag related web pages, web content, links and other information to make a body of information easy to find, thereby creating web communities. Front company An enterprise that cultivates a large number of consumers, stores their identities in a database, and has direct contact with them. For example, Amazon.com, Google and Yahoo!. Long tail In statistics, bell-shaped curves represent normal distributions, where high frequency populations tail off to low frequency populations, toward infinity. The low frequency areas on either side of the bell are 'long tails'. In a sales context, the most profitable sales are concentrated in the bell-shaped curve, and comprise a small proportion of total sales. The long tail, while indicating lower profitability, represents the greater proportion of total sales. This means that products that are in low demand or have a low sales volume can collectively make up a market share that rivals or exceeds the relatively few best-selling products, if the store or distribution channel is large enough, or targeted efficiently. When the cost of storing a large inventory decreases, and distribution is improved, the long tail sales channel of Web 2.0 may threaten conventional businesses. The long tail is also known as the dinosaur. The body of the dinosaur the first 25% of sales contains 80% of total sales. Or, the top 10 dealers out of 100 produce 80% of the revenue. Mushup/mashup Mushup or mashup (both used) in Web 2.0 means to mix 2 or more information sources to offer value-added information. Mashup techniques reduce development time and costs by using existing information sites. Netshop An online shop. Oligopoly A state of limited competition, in which a market is shared by a small number of producers or sellers. The actions of any one of them will materially affect price and have a measurable impact on competitors. RSS/Atom Rich Site Summary or Really Simple Syndication. RSS is a lightweight XML vocabulary for describing metadata about websites. Ideal for news syndication, but used to syndicate and share almost anything that can be broken down into discrete items. Originally developed by Netscape. Atom is an alternative to RSS, originally developed by IBM. Social bookmarking A web-based service to share internet bookmarks, associated with folksonomies and social networks on the internet. SNS Social Networking Service. An online service that builds social networks for whatever purpose required, from company employee social events to online dating. Wisdom of the crowd The idea that a diverse collection of independent individuals 'many' is smarter than 'a few'. It relies on these individuals possessing independent market judgement, a common understanding of cultural influences and a desire to cooperate. XML extensible Markup Language. XML is a markup language for documents containing structured information. Structured information contains both content (for example, words and pictures) and some indication of what role that content plays. A markup language is a mechanism to identify structures in a document, using tags. The XML specification defines a standard way to add markup to documents. Comments? Please send any feedback about this document to: michiaki.ninomiya@nts.ricoh.co.jp and vbaxter@ricoh.com.au 6 Prepared by Ricoh Asia Pacific for Version 1.000, April 2007