The Long Tail concept refers to the Internet-based economy that has enabled company success through a focus on highly specialised services and products that are not in high volume demand, but maybe in high-value demand instead. According to the Pareto principle, 20% of products generate 80% of sales, while the remaining 80% niche products only provides 20% of sales.  From a tourism perspective, the short tail is considered the honeypot destinatio … Read More

via Brian J. Perkins

Image provided by Renjith Krishnan

With the dot.com bust a number of start up companies went under. This forced IT professionals to develop new models to making the internet profitable. A new revolution of how users would engage the internet was born. The era of Web 2.0 had arrived. Web 2.0 applications provided a platform that enabled collaboration and empowerment to its users.

This paradigm has been coined Harnessing the Collective Intelligence by Tim O’Reilly. There are two key principles that allow this process to prosper. The first key principle is that the users add value. Through the users participation on the web 2.0 platform by creating content, uploading and sharing their ideas and thoughts they are can both directly and indirectly add value.

The second principle is that network effects magnify this value.

Web 2.0 thrives on network effects: databases that get richer the more people interact with them, applications that are smarter the more people use them, marketing that is driven by user stories and experiences, and applications that interact with each other to form a broader computing platform.

By involving users both implicitly and explicitly the interaction will become more meaningful and enjoyable. Web 2.0 technologies should facilitate emergence by allowing the particular application to transform to suit the users needs. The ability for the application to be fluid and less structured will enhance the experience by the users. Web 2.0 applications have been developed to allow users to create web pages and content with little or no understanding of HTML.

Foursquare

Foursquare is a location-based social networking service which is avaliable on smart phones to allow its users to “check-in” to venues they are currently at. This allows users to share their current location with other users they are connected with their foursquare account. There is also a game aspect to the service which allows users to receive reward points and “badges” for each check-in they do. For users check-in the most to a venue, become the “mayor” of that location. Users are also able to leave comments on a particular location they have check-in at. Some businesses have embrassed this social networking service by providing specials and discounts to the “mayor” or other users of foursquare.

Businesses have seen the advantages of customers using foursquare as it shares their business name with other users of the platform and lets them know if they frequent a particular location (eg: coffee shop) which in turn may attract further foursquare members to visit, especially if a positive comment is left

The face of buisness marketing has changed with the use of social media. The inaugural Nielsen-Community Engine 2010 Social Media Business Benchmarking Study found that 70 per cent of all Australian businesses intend conducting some form of social media activity this year, compared with just 40 per cent in 2008. (read more here).

Users that connect on platforms such as foursquare can read people’s personal opinions on a particular business which could influence a customer’s decision more than having that customer exposed to a traditional marketing campaign.

Businesses need to use platforms such as foursquare to connect with these niche markets to discover what the perception is of their buisness. It is a great source of information and is another way that businesses can market to a specific customer base.

Companies can now operate in a more cost effective way which helps to support lightweight and scalable business models. By choosing open source software as an alternative to commercial products along with cost effective marketing (network effect) and hardware means that there no longer needs to be big expenditure into large development teams.

Open source software such as LAMP which stands for;
* Linux (operating system),
* Apache (HTTP Server),
* MySQL (database software) and,
* Perl/PHP/Python
have allowed businesses to create application servers at virtually no cost.

iStockphoto the world’s original source for user-generated, royalty-free stock images, media and design elements was built on the LAMP stack. The below video is a preview into how iStockphoto works.

According to Patrick Lohr, the president of iStockphoto, one of the biggest drivers for the use of the LAMP stack was cost (Bradbury, 2005).

LAMP allows minimal capital expenditure prior to identifying what the potential return on investment (ROI) will be.

What businesses need to do is start out and test their business concepts in a way that gets them to market fast, with a proof of concept. It’s what some people call ‘fail fast’. If you have an idea that sucks, find out that it sucks fast. That is what the LAMP stack lets you do (Lohr, 2005).

Although iStockphoto which was started by Bruce Livingstone was totally free it has since evolved and developed a revenue model. This is something that came about as a result of the network effect.

By Livingstone providing his own material free for download it created a massive interest with web designers. Some of these designers began uploading images of their own. Livingstone then polled the growing iStock community to find out if people would support paying for images.

In 2002, iStock began selling credits. Now you could get a high-quality image for under a dollar, and the artist who contributed it got paid a royalty.

It was an entirely new way of doing things. Some people called it the birth of ‘microstock‘.

By maintaining reasonable user costs Livingstone encouraged participation, which in turn helped foster growth, community, and ultimately user generated data as part of an ‘Intel Inside’ data strategy. iStockphoto was designed with strategic and tactical choices which enabled future scaling as the business grew.

By creating a diversified revenue model, including subscription and premium services, companies can build long-term growth and stability as proven with iStockPhoto.

The first graph is an example of the Pareto principle which is also known as the 80-20 rule. In a business context it suggests that 80% of your sales comes from 20% of your your products. Chris Anderson argues that as demand shifts down the tail, the effect would diminish.

The next below is a visualisation of the effect of leveraging the longtail. According to Anderson’s long tail blog, over the course of time if you grow the tail portion of graph,

the potential aggregate size of the many small markets in goods that don’t individually sell well enough for traditional retail and broadcast distribution may someday rival that of the existing large market in goods that do cross that economic bar.

The Long Tail theory suggests that, as the Internet makes distribution easier and technology systems allow consumers to become aware of more obscure products, demand will shift from the most popular products at the “head” of a demand curve to the aggregate power of a long “tail” made up of demand for many different niche products (Wharton, 2009).

Online companies are already identifiying the power of leveraging the longtail and have based their buisness models on this exact theory. Within the music industry platforms such as Garageband and iLike have provided the avenue for smaller bands and musicians to market their product to a specific audience which may not be catered for by the larger commerical music stores such as Sanity Music.

By selling and advertising online through platforms such as Garageband low distribution and inventory costs can allow businesses to realise a significant profit by selling a small volume of hard-to-find items to many customers, instead of only selling larger volumes of a reduced number of popular items (Anderson, 2004). By making their music available online and market it through online communities musicians have the ability to profit from the Long Tail and overcome the limitations of geography and scale. By employing web 2.0 tools to its fullest potential musicians now have the opportunity to discover new markets and expand existing ones, and ultimately expand their fan base.

One of the core concepts discussed with web 2.0 applications is their architecture being in a constant state of “perpetual beta“. Tim O’Reilly discusses this concept saying: “Users must be treated as co-developers, in a reflection of open source development practices… The perpetual beta, in which the product is developed in the open, with new features slipstreamed in on a monthly, weekly, or even daily basis. It’s no accident that services such as Gmail, Google Maps, Flickr, del.icio.us, and the like may be expected to bear a “Beta” logo for years at a time.”

Unlike the release of new versions of products every few years by commercial giants such as Microsoft products that operate in perpetual beta have “come to be associated with the development and release of a service in which constant updates are the foundation for the habitability/usability of a service.” Wikipedia

This means that products operating in a perpetual beta have features introduced almost on a daily basis rather than commercial product where the user must wait for the release of each version for added features and functionality.

Francesco Mapelli believes because users can provide important feedbacks and feature requests, and companies should add and remove tools and services depending on the feedback and their interests. What can (and should) be in perpetual beta is the way small pieces link together, not the small pieces itself.

“Web 2.0 is like LEGO. You have small, simple and colorful pieces, and you build platforms and services with this pieces. You can build something that changes every day, but the small pieces you use must be solid.”

Facebook

Facebook is an example of a web 2.0 application that is operating in a perpetual beta. Since its inception in February, 2004 the social networking leader has constantly provided updated functionality to its service. In 2010, it released an enhancement to its popular photo feature being high resolution photo uploads and an in-line photo viewer to the News Feed. These features came about as a result of Facebook listening to its customer base on what features they were looking for.

A further enhancement that came about in October 2010, was the drag-and-drop organising. Demonstrated in the video below, drag-and-drop organising is exactly as it sounds; users can now drag and drop albums and photos into any order they desire.

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Amazon.com identifed that moving developers closer to both operations and customers creates a feedback loop that improves both quality of technology and service. This same principle was employed by Facebook which has resulted in an enhanced product brought on by the feedback of its customers.

Look at the shift from watching television through an analog signal, then to digital and now streaming through the internet through devices such as a TiVo and smartphones. Enhancements in networking technology and infrastructure have allowed for this process to happen.

Similarly, using internet banking as an example, the ability for users to conduct banking transactions from anywhere in the world at anytime provided flexibility of service. Users want that flexibility with any interaction online whether it is watching their favourite TV Show, accessing their Facebook page or updating their personal blog.

With the enhancements in technology such as mobile handsets, smart phones, laptops, portable media, gaming consoles and media centers a framework to build and run applications has been created that has the potential to connect users to their data and applications at all times.

Users now and into the future will want this flexibility and have applications that operate above the level of a single device. Tim O’Rielly has referred to this as software no longer being limited to the PC as its only platform. O’Reilly refers to smart phones having the capability to interact with the cloud so that applications on the smart phone such as your personal contacts are able to be accessed from a PC along with other personal data. The devices will interact with other applications online such as Google Maps to provide a richer user experience.

Webinos is an online open source platform currently under development which aims to enable web applications and services to be used and shared consistently and securely over a broad spectrum of converged and connected devices, including mobile, PC, home media (TV) and in-car units.

webinos is an initiative of 22 project partners from across Europe, spanning academic institutions, industry research firms, software firms, handset manufacturers and automotive manufacturers. The project has funding for 14 million Euro and is due to finish in 08/2013.

The video below is a great example of how webinos will allow applications to operate across a variety of devices.

The webinos platform has many key features that will guarantee its success in being future proof.

Firstly, it is an open source platform that offers a common set of API’s. This allows greater collaboration and interaction through the development and enhancement of applications on the wininos platform. The common set of APIs will allow applications easy access to cross-user cross-service cross-device functionality in an open yet secure manner.

Secondly, webinos provides security for its users as part of its quality of service.

Context and security are intimately intertwined: rich context is valuable but without user empowered security it becomes a liability. This dual approach is a hallmark of the webinos approach.

According to webinos, the platform will enable secure access private and nonprivate data and services on the cloud, social web, as well as data on the user terminal.

Finally, the webinos platform will make use of the specific capabilities and resources of the underlying hardware platform. This means that the webinos application servers will provide all the back end processing. This will offload the heavy lifting from edge devices to servers and only return lightweight results to the end user devices to provide a more enjoyable experience for the user.

The webinos platform is an excellent example of where the future of applications will need to be. An interaction of applications across multiple devices that offers flexability, functionality and security. Allowing users to access their data and applications from anywhere in the world at anytime across a multitude of devices will ensure that webinos are prepared well into the future.

Ajax incorporates:

* standards-based presentation using XHTML and CSS;
* dynamic display and interaction using the Document Object Model;
* data interchange and manipulation using XML and XSLT;
* asynchronous data retrieval using XMLHttpRequest;
* and JavaScript binding everything together.

AJAX applications can retrieve data from the server asynchronously in the background without interfering with the display and behavior of the existing page.

HTML5 also has increased functionality with new video, audio, and canvas elements, as well as the integration of Scalable Vector Graphics (SVG) content.

These features are designed to make it easy to include and handle multimedia and graphical content on the web without having to resort to proprietary plugins and APIs.

Online software applications such as the online mind mapping tool MindMeister are great examples of these new technologies with drag and drop functionality that provide full rich media. MindMeister is entirely Javascript / Ajax based.

A Tour of MindMeister from MindMeister on Vimeo.

MindMeister is one of the most authoritative and open collaborative mind mapping tools available on the web. MindMeister brings the concept of mind mapping to the web, using its facilities for real-time collaboration to allow truly global brainstorming sessions. Users can create, manage and share mind maps online and access them anytime, from anywhere. In brainstorming mode, fellow MindMeisters from around the world (or just in different rooms) can simultaneously work on the same mind map and see each other’s changes as they happen.

Real-time collaboration is also possible using Skype, if needed. Like most web apps, documents can be readily shared with others. Export options include .rtf, .pdf, .jpg, .gif, .png, .mm, .mmap, and .mind, the default MindMeister file format. Programmers can extend this application through the MindMeister API. Currently there are apps avaliable for download for the Apple iPhone and iPad.

MindMeister allows users to sign up for free but is limited to storing three mind maps at a time. There are two types of paid accounts a business account starting at $9 per month and a premium account that is $59 per year. The business account is more expensive but provides the extra functionality.

Using MindMeister as an alternative enterprise soloution makes sense with the cost and infrastrure to run the software virtually free. This relates to a great Return on Investment (ROI) in using the product.

MindMeister is a multi award winning product that contains plenty of features tailored not only to business but also to students and individuals.

A review conducted by Celine Roque an avid user of mind mapping tools provides a great insight into the capabilities of MindMeister as an alternative to the desktop clients that are avalabile in this space.

Despite the limitations of the free account, MindMeister is a good way to start learning about mind mapping for the curious.

MindMeister is an excellent mind mapping tool alternative to desktop clients. It provides collaboration, sharing, mobility, low cost and plenty of features that enhance the user experience. This is a prime example of where the future of applications will be heading. With programming languages such as AJAX being able to provide such amazing functionality to the online user the gap between desktop clients and online applications is constantly becoming closer.

Tim O’Reilly states in What Is Web 2.0;

The race is on to own certain classes of core data: location, identity, calendaring of public events, product identifiers and namespaces. In many cases, where there is significant cost to create the data, there may be an opportunity for an Intel Inside style play, with a single source for the data. In others, the winner will be the company that first reaches critical mass via user aggregation, and turns that aggregated data into a system service.

We are in a data driven era. The uptake of Social Media has been phenomenal over the past few years. In an online article News.com.au stated in 2009 that Facebook alone has 6.5 million visitors per month. With computers becoming more affordable and the increased power of portable devices makes access to social networking an “always on” reality for users. A study in the United States by comScore showed for the three month average period ending in February 2011,

234 million Americans ages 13 and older used mobile devices.

Social media sites are constantly being updated with information from users about where they are, what they are doing and where their interests lay.

The power of the network effect and software as a service mean that web 2.0 platforms become a great source for user data. This can provide competitive and market intelligence through the use of mashups and by bringing structure to unstructured data.

Understand the needs of future users

Bearing this in mind, companies need to think of how this can be used to their advantage.

Data Analysis can be helpful in highlighting useful information, suggesting conclusions, and supporting decision making but what if data analysis could not only happen on archived data but be conducted in real time. Focus is now shifting towards social analytics which harnesses the real time thoughts of vistors to your site. Depending on the type of service you are providing the reason why the user visits your site may vary with each visit. The essence of using social media analytics would help to create a tailored experience based on what the intent of the audience is.

One such tool in this space is Kontagent.

Kontagent’s social analytics platform helps companies measure every aspect of the user experience. We capture deep insights into how people interact on the social web, so that you can improve the discovery and adoption of your social games and applications.

According to Matt LeMay, platform manager at bitly, companies could see what people are sharing and discussing on the Web in real time in order to deliver the most relevant content.

Kontagent focuses on 3 areas being Infrastructure, Intelligence and Interpretation.

Organisations such as Kontagent are seeing the power of data and how it is the next intel inside. Other organisations such as Demand Media are also operating in this space and can provide customers with social media tools, optimized content and domain tools to grow your online business.

As Tim O’Reilly stated, the company that first reaches critical mass via user aggregation, and turns that aggregated data into a system service will benefit. Kontagent and Demand Media are doing this using a comprehensive feature set which leverages off platforms that have harnessed the network effect such as Facebook, Twitter and LinkedIn and by aggregating all these and other data pools together they are providing structure to unstructured data that can benefit business into the future.

Photo courtesy of renjith krishnan

The definition of an API is the specific method prescribed by a computer operating system or by an application program by which a programmer writing an application program can make requests of the operating system or another application. An API can be contrasted with a graphical user interface or a command interface (both of which are direct user interfaces) as interfaces to an operating system or a program.

With the massive uptake of instant messaging in the enterprise across multiple clients it makes sense to deploy a single enterprise solution that will handle multiple IM clients. JBuddy Messenger by Zion Software is a multi-protocol, cross-platform instant messaging desktop client. JBuddy Messenger supports popular public instant messaging protocols as well as enterprise instant messaging servers and runs on Windows, Mac OS X, Linux, Solaris and other Java-enabled desktop environments.

The Jbuddy platform is an excellent example of how the benefits of API can provide innovation.

JBuddy API Stack

Through the use of the JBuddy API users are able to experience instant messaging from the following public services;
# AIM
# ICQ
# Windows Live Messenger (formerly MSN Messenger)
# Yahoo Instant Messenger and
# Google Talk

It also supports Enterprise solutions in this space with the following platforms;
# IBM Lotus Sametime
# Microsoft Office Communications Server (OCS 2007)
# Microsoft Live Communications Server (LCS 2005)
# Apple’s iChat Server
# Jabber / XMPP Servers
# JBuddy Message Server

By crossing multiple public and enterprise platforms JBuddy Messenger succeeds in providing an enhanced experience for the user. It also promotes growth into what is referred to as the mashable ecosystem. A mashup is the combination of data, presentation or functionality from two or more sources to create new services. This process frequently utilises open APIs and data sources to produce enriched results that were not necessarily the original reason for producing the raw source data. The mashup have known characteristics of combination, visualization, and aggregation.

JBuddy is feature rich, visually effective and easy to use. The JBuddy platform contains enhanced functionality that individual instant messging clients can not provide such as enhanced logging and searching capabilities.

The creators have shared their knowledge with other developers by releasing their software libraries and code. This allow s other software developers to collaborate with the work they have already produced. It also allows the JBuddy Messenger platform to build customer trust and loyalty.

A new revolution of how users would engage the internet was born. The era of Web 2.0 had arrived. Web 2.0 applications provided a platform that enabled collaboration and empowerment to its users.

This paradigm has been coined Harnessing the Collective Intelligence by Tim O’Reilly. There are two key principles that allow this process to prosper. The first key principle is that the users add value. Through the users participation on the web 2.0 platform by creating content, uploading and sharing their ideas and thoughts they are can both directly and indirectly add value.

The second principle is that network effects magnify this value.

Web 2.0 thrives on network effects: databases that get richer the more people interact with them, applications that are smarter the more people use them, marketing that is driven by user stories and experiences, and applications that interact with each other to form a broader computing platform.

By involving users both implicitly and explicitly the interaction will become more meaningful and enjoyable. Web 2.0 technologies should facilitate emergence by allowing the particular application to transform to suit the users needs. The ability for the application to be fluid and less structured will enhance the experience by the users. Web 2.0 applications have been developed to allow users to create web pages and content with little or no understanding of HTML.

Wordpress

WordPress is web software that enables uses to create websites or blogs. The platform is totally free and the core components of the platform were built by hundreds of community volunteers.

The success of Word press is attributed to their ability to allow users to feel empowered and to provide the platform for free. Although their are minor structural features to the platform each user has the ability to develop and create their own unique content which they can share online for free utilising thousands of plugins and themes.

By providing the platform for free Word Press have exceeded over 25 million users thus enabling the network effect. With more users comes more interaction and more content and a richer experience for its users.

There is ability for users to collaborate online with each other and also across other web 2.0 platforms through the adding of external content and links.

Word Press is an excellent example of how harnessing the collective intelligence of its users can enhance their experience and propagate further successful growth.