The Web, part deux

How Web 2.0 is changing the face of business.

Just as business and consumers are becoming used to being linked together via the Internet, yet another buzzword is changing the relationship. It's called Web 2.0, part design/technology, part philosophy and part community. For business it's about using new technology and 'social networking' to build rich communities that include employees, partners and customers.

“Web 2.0 is here to stay,” declares Sonal Ghandi, an analyst with New York-based Jupiter Research. “It's growing, and just starting to gain momentum.”

One of Web 2.0's most successful service providers has been around since, well, before Web 2.0.'s mantra for years has been “no software,” coupled with an insistence that Web-based services are the wave of the future.

While (NYSE: CRM) didn't anticipate the expression “Web 2.0” when it was founded in 1999, the customer relationship management firm certainly embodies one of the movement's fundamentals: to use the Web to accomplish business tasks without requiring software. As one of the fastest growing companies in its sector, the San Francisco-based company is benefiting from the ongoing shift in business thinking to “Web as platform.” Third quarter revenue for its fiscal 2007 (ended October 31, 2006) was US$130 million, a record 57% increase on a year-over-year basis and 10% quarter-over-quarter (revenue for its fiscal 2006 totalled US$309 million, up 200% since 2004).

Adam Gross, VP of developer marketing, says is in the right place at the right time. “The whole idea of using business applications on-demand through a Web browser is something that really [has become] mainstream. Years ago, there were a lot of questions about whether this model would survive.” In the days before dependable, high-speed Internet access was common, the idea of business relying on relatively immature Web-based tools was considered foolish. (According to Industry Canada, today 81% of Canadian firms have high-speed Internet access.)

Calgary-based Intergraph (Nasdaq: INGR), a provider of spatial information management software, is a customer that has adopted several of the latter's products such as Apex Builder (a point-and-click application creation tool) with positive results. Dan Rusheinski, director of business development for Intergraph, says's Web 2.0-like apps have improved process flow, communication, consistency and collaboration within and among the teams. “It really boils down to everybody having access to the same information, and when you've got the whole team looking in the same direction they're going to start to cooperate and work together.”

But it wasn't always smooth sailing. Some employees were initially skeptical of this new way of doing business, but ultimately, he says, “most, if not all” were converted by the products' ease of use. “We had a lot of old-time people who were used to software-based systems where they had control of their data.”

Unlike, and despite launching in 1998, Burlington, Ont.-based content management company iUpload considers itself native to 2.0. CEO Robin Hopper says he realized in 2005 that customers wanted to manage smaller pieces of information and encourage broader participation than a Web content management system would allow. And so was born the Customer Conversation System (CCS). The product integrates blogs and related social media technologies within the enterprise to create what the company calls a “market conversation system” — essentially, new sales and marketing channels.

IUpload client Petro-Canada has adopted social media as a method for building and retaining its corporate knowledge base, given its aging workforce. While e-mail is still the most popular publishing tool, it's not an effective way to share large volumes of information. CCS allows employees to use blogs and wikis to capture day-to-day, anecdotal information. Says Hopper, “Petro-Canada gives blogs out to individuals and encourages them to write whatever they want, which creates a corporate memory.”

Arguably the most popular social networking element of Web 2.0, the blog, or online journal, has found increasing favour among business. Sun Microsystems' CEO Jonathan Schwartz writes about innovations at his company. GM's Vice Chairman Bob Lutz shares his perspective on GM vehicles, racing, and the auto industry in general. Similarly, podcasting, another 2.0 staple, is not just about entertainment but is now used for conference proceedings, investor meetings and corporate press announcements.

The surge of interest in Web 2.0 is paying dividends for iUpload, whose other clients include McDonald's, Coca-Cola, Aetna and Motorola. “The volume that's been placed on our lead funnel has been phenomenal month over month, and growth has been tremendous,” says Hopper. He adds that for 2006 revenue growth is up 200%. And fourth quarter numbers are also up 200% from third quarter. “We've done this with no outbound sales effort, no real outgoing marketing initiatives. It's all been responding to incoming demand and incoming interest based on how other people have deployed [the system]. And the word of mouth that's gone on within our client base has driven that. We're trying to grow quite quickly to take advantage of all the interest right now.”

While Sudbury, Ont.-based ConceptShare could be considered a new kid on the block, it's seeing success very early on. The three-man application service company was born in June 2006 out of a need to collaborate on design documents after its founders decided using e-mail and instant messaging was too limiting.

The ConceptShare tool is Web-based and allows people to share designs in a contextual way. Upload any image into the workspace and invitees can then mark up the document in real time and make comments.

Bolstered by a local angel's investment of about half a million dollars, ConceptShare has just completed its beta testing phase. The public service was launched in November.

Not to be outdone, pioneering technology firm IBM (NYSE: IBM) is embracing Web 2.0 in an innovative way. In November 2006 the company launched its IBM@Play program, a social networking initiative designed to bring together the company's far-flung employees. It has found expression on such platforms as Second Life and India's Planeshift, where people interact using life-like digital personas called “avatars.”

IBM's Chuck Hamilton, solutions leader for IBM's Center for Advanced Learning at its Innovation Centre in Burnaby, BC, says, “We are learning that Virtual Social Worlds (VSWs) offer us the advantage of quickly building new relationships across IBM, regardless of our home geography. While traditional on-boarding will continue, we feel that we can leverage VSWs to get people over the initial learning curve sooner.”

If today is about Web 2.0, then consider what the future — Web 3.0 — might look like. Hamilton says it will be about having everything humans do be visible in a digital 3D world, such as an avatar greeting you at a help desk or providing virtual support for an e-commerce transaction.'s Gross believes focus will next shift to how 2.0 is impacting the enterprise in terms of completely new applications. “One of the things we think is just really beginning to tip now is the idea of mashups [an application or Web site such as Mappr that combines content from more than one source]. We're seeing that now within the enterprise and it's being used to build new business applications, whether it's mashups with Google, things like Skype, or other kinds of Internet services.”