nGenera Insight invites you to participate in a new survey designed to gather information on platform usage, impact, and challenges. The survey is open to all levels and functions—if you are reading this we would love to hear from you! It only takes about 7 to 10 minutes and as a thank you for your time we will provide you with a summary of the findings.

The survey is designed to gather information and help answer questions like:

• What popular platform technologies are being used for business purposes?
• What progress is being made on creating customer, as well as internal, communities?
• What are the major enterprise challenges faced by those using collaborative platforms?
• How do business leaders view the future of collaborative platforms and their long-term impact?

To participate, please click on one of the links above or simply click here. To learn more about why platforms are important and what makes them successful, read Nick Vitalari’s posts Apple and the Rise of Competitive Business Platforms – What Other Companies Must Know and 12 Critical Success Factors for Business Platforms.

Thank you in advance for your participation, we look forward to sharing our results with you.

Cloudmade is a great example of “business as platform”. From the ground up, day 1, Cloudmade’s founders set out to create monetizable services around free mapping. That’s what lines them up against the likes of Google and Nokia, true behemoths of the mobile space. For those who are new to mapping, briefly, mapping’s popularity began with in car navigation in high end saloon cars (BMW for example) where the nav app could be charged out at a fraction of the saloon car price and still be worth $3,000.  That was less than a decade ago. Navigation is now free, and maps – or geo-data – are the next big wave of content and applications.

Cloudmade’s platform makes it easy to create any kind of map, or geo-data-related app for any mobile device or web service. Apps range from games to locators to, in future, opportunities that might include delivery companies coinciding with their customers in mutually convenient places rather than delivering door-to-door, and devising more of an any time any place offer.

Still, you might say of Cloudmade, just one more API project, and one more ecosystem.

The difference is that Cloudmade is out to create the reward structure for its eco-system, rather than leaving all those app developers (10,000 of them now) to sink or swim in the market. Because Google sees dominance in advertising as its right (in return for all those things it gives away like free search) Cloudmade’s business plan also involves out thinking the Google business model.

Nick pointed out that Google is fantastic at creating new tools around its free services and giving these away, all in the name of increasing ad revenues. What it tends not to do though is create business opportunities for app developers (if you are an ad words professional then you know it does create opportunity in the ads world).

Cloudmade’s unspoken pitch is therefore to take the moral framework of free beyond what Google has enshrined in its business practices. This is not just about giving stuff away so the platform owner can pocket billions of dollars. It is driven by a model where everyone shares the revenue growth.

Cloudmade could then be in the process of redefining what it means to be a platform business. Not only does it reach beyond Google, it also extends the platform model beyond Apple, who, like Google, do not help apps developers monetise their apps beyond the iTunes download.

In Cloudmade’s model apps developers can sell their apps (on iTunes or elsewhere) but also have ad revenue potential – by using the Cloudmade SDK’s they are inextricably linked to Cloudmade’s platform, which includes a contextual advertising service. Cloudmade is in fact an ads aggregator that places geo-contextual ads for merchants via the growing network of Cloudmade developer apps (700,000 people accessed Cloudmade geo-apps in March and the figure is growing at 15% per month).

Two more points are worth making around the Cloudmade model.

First it reflects the fact that open collaboration carries responsibilities. Cloudmade’s founders are openstreetmaps‘ founders. Openstreetmap – with Cloudmade’s support – provides the means for anyone to upload mapping information. For “mapping information” read anything that relates to a place.  Openstreetmap and Cloudmade are crowdsourced map, direction and place related databases and the rewards structure needs to be fair.

Secondly a new wave of entrepreneurs is taking free in new directions.”Cloudmade’s support of openstreetmap is driving the cost of data collection down to zero,” says Nick after recounting how much Nokia paid for mapper NAVTEQ ($ 8 billion).

By driving the cost of data collection towards zero Cloudmade can fight on Nokia’s turf. By creating an ad network for its app developer network Cloudmade represents a low cost competitor in the world of Google.

Looking to lessons for the larger economy, I had a few days this week in Stockholm where the rumour is that the large European mobile infrastructure players are facing price reductions of 30% per annum from Chinese competitors.

If that’s the case then finding radical ways of taking cost out of US and European product is an imperative as the economy begins to revive. The question is does it mean that more companies need to work through the moral framework of free, and the reward structure of the eco-system platform. Somehow, somewhere we need to claw back the idea that we can export cost reductions and instead begin devising new pacts around prosumer and developer activity.

While Twitter is a stand-alone company, the value of the service is heavily dependent on the large ecosystem of developers innovating on top of their API. Like Twitter itself, most of these developers took a “build the customer base first, worry about business models later” approach. “Later” is now here. As  everyone involved starts scrambling to try to make money, everyone almost invariably stumbles onto the word “advertising” as the solution. But no one’s quite sure how big the advertising pie will be, and Twitter itself needs to grab a pretty big piece of it. This is going to make it tricky to hold the ecosystem together.

While there were many signs of this coming through 2009, two particularly big ones popped up late in the year. The first was changes taking place with StockTwits, which described itself as “real investors providing real ideas in real time“, and had grown to become one of the most popular Twitter applications. As a TechCrunch article in September explained, StockTwits was evolving to create an entire back end independent of Twitter itself – “Yes, StockTwits is slowly breaking away from the service that inspired its name.” In turn, it would be reasonable for Twitter to think that an important partner might become a competitor, and others might follow.

The second was that Twitter itself was (finally) starting to innovate on top of their own platform. “Lists”, which were launched as a “great way to organize the people you follow and discover new and interesting accounts“, was one such example. Instead of just enabling people to share information, the company seemed to be making baby steps towards making it easier to sort through. If they continued down that path, it could eventually put them in direct competition with services like TweetDeck.

I was reminded of this when reading the recent Economist article called “Up for promotion – Twitter decides to sell advertising.” In paragraph seven, the issues I was pointing towards in #2 are made clear – it opens with the sentence “A few of these may compete with offerings from developers.” It mentions how people at Chirp (Twitter’s first developer conference) were a little upset about Twitter’s purchase of Atebits (the maker of Tweeties), and that “makers of rival programs complain that Twitter is now competing with them.” A developer is quoted saying that “the way they have done this is scary” – and many would argue he has a right to be scared. A New York Times article on the same subject hit on the same themes and arguments.

However, as #1 pointed to, Twitter needs to be a little scared itself, as developers might just shift their attention away from the platform (particularly if they feel threatened), perhaps taking current users, and ideas for new innovations, with them. More to the point, they need to make strategic choices about what should be created on the platform, and what should be left to the ecosystem – a message Twitter’s CEO is clearly sending to developers now. With quotes like “(there are also) features built for Twitter that maybe only exist in client applications, and we’re going to build them in because they should be there“, it’s pretty clear some nifty innovators are going to be put out of business by the platform they innovated on top of, as Twitter tries to find find the appropriate balance.

Such challenges are not new in the competitive collaborative platform space. Companies like YouTube and Ning have had similar issues pop up now and again, and we expect to see such tensions arise far more in the future. How exactly it will play out is anybody’s guess. But as more and more companies move to platform-driven models to derive competitive advantage, what happens here is worth paying attention to.

One of the more important lessons may end up being that the owner of a given platform (or, say, community) that has a clear business model from the outset, and allows ecosystem partners to innovate around it, instead of plugging holes in the core offering, is more likely to build a sustainable ecosystem model. In addition to the quotes above, Fred Wilson, a long-time Twitter Board Member, had a recent blog post that highlights the need for Twitter to (belatedly) move in this direction. In the future, companies that, you know, already make money, might be in a better position to create competitive collaborative platform strategies than those starting from scratch.

On the flip side, perhaps a “winner takes all” model will take hold here – where the best innovators are acquired (maintaining the incentive for developers to engage) and integrated into the main platform, and the rest wither away and die. We see more and more of this type of rewards distribution popping up all over the web, and while it may not seem “fair” to everyone, I think it’s a definite possibility. I don’t know – but with pressure on to find a business model that validates all the venture capital money that has flowed in, I have a feeling Twitter will soon find out.

Either way, there’s actually another interesting lesson in here worth repeating. Many people are expressing “surprise” and “shock” at these latest Twitter developments. They shouldn’t be. Everyone knew Twitter had to eventually find a business model, and little signs have been popping up to point in this direction for quite some time. If you looked carefully at what Twitter (and key partners) were doing, and thought about the challenges they were facing, you didn’t have to wait for the CEO to tell you this was coming.

Many see mobility as simply another communication channel or another medium. Others mistakenly view mobility as simply another information technology, much like those that preceded it. They do not see how a mobile device combined with a business platform (elsewhere I have discussed the characteristics and success factors of business platforms) can lead to new business models, entirely new businesses, and new growth options.

Here are five critical elements executives must understand about mobility. Mobility creates:

1. Micro-tasking. How small can a meaningful piece of work be? Is not the right one-word answer immeasurably productive at the right time? What about a single word of encouragement at the right moment. Rehearsing a new set of phrases for a new language as an adult or reviewing multiplication tables during a couple of available minutes as a child can be remarkably effective and efficient. This is the power of micro-tasking and mobile platforms enable this behavior in ways and times not possible before. Multiply this by the millions or perhaps billion moments per day and you have new levels of potential human productivity and significantly revised time budgets. And there are examples: The Extraordinaries harnesses voluntary micro-tasking to help those in need and see Denis Hancock’s post, “The iPhone, growing up digital, and my daughter’s education,” on the way micro-tasking changes the way pre-schoolers learn.
2. New Creativity. Humans are fundamentally asynchronous and associative. We require props to operate on schedule. Most of the time our ideas, inspirations, and breakthroughs seem random or triggered by some event, association with another idea, or situational experience. Because our devices are always with us and allow us immediate access to tools that were formerly attached to a desk or office, mobile platforms enable us to work in a more natural way – asynchronously and associatively. When did you have your last creative idea? Being connected to a global infrastructure, able to access capabilities at a whim, or simply using an appropriate app at the appropriate time enables new levels of creativity.
3. The Growing World of Sensors. Mobile devices loaded with sensors will revolutionize health, safety and security. Sensor technology is growing in its ability to sense the world that is visible to humans as well as the world that is not. When you integrate sensor technology (biosensors, temperature, radiation, personal sonar/radar etc) into mobile devices married to platform infrastructures, every human being becomes a sensing station that can measure environmental pollutions, noise pollution, unhealthy emissions, or dangerous hazards. The implications for health, safety and personal care surpass any in a non-mobile, non-sensor based world.
4. Enhanced experience or augmented reality. Much like the headphones issued at some public museums enhance the one’s understanding of museum artifacts, all facets of daily life can be enhanced by location, context and proximal awareness. Location data can enhance the experience of the local opera, theatrical performance, or visit to a museum. Commercial enterprises, whether serving B2C or B2B marketplaces, have the ability to augment the entire procurement process through mobile platforms. Employees can be augmented with relevant information and tools when serving customers and providing contracted services.
5. Digital Identity and the Rich Digital Self. As remarkable as the human capacity to remember is, it remains limited in many ways. The same is not true of devices that sense and store, activities that mobile platforms do in unique and often helpful ways. If my rich digital self is only based on what I can recall, it is limited. On the other hand, a rich digital self enhanced by streams of unbounded data collected through my mobile platform can create personal value and protect my privacy.

Are these areas where the greatest opportunity awaits? Are there others that I have missed? Are there companies and institutions that seem to really recognize—and leverage accordingly—the power of mobile platforms? Is there a role of for mobile business platforms to meet the special needs of your marketplace? Or will you stand by and let others, competitors and new entrants till the fields of mobility?

There is more to the game than a comprehensive tutorial, there’s also a sharp story, and perhaps more significantly, a robust content delivery and data-mining platform that Valve uses to update and monitor the usage of their products. Valve’s content distribution platform, Steam, allows the company to apply bug-fixes and updates to games, as well as learn about how users go about playing through the games, including but not limited to the furthest level of completion, and whereabouts in the game players are most likely to meet their end.

While the ability to glean insights about how their customers use their products must be invaluable as feedback data for making better and more engaging games, it is the ability to update content seamlessly on users’ computers that was a move to watch this past week.

To prepare for the upcoming release of Portal 2, Valve quietly and unceremoniously released an update to 2007′s portal that changed the end of the game. The practice, known as retconning, or enforcing “retroactive continuity” is usually met with nerd-rage, but seems to have been well-received by the gaming community in this case. Thanks to their content distribution and monitoring platform, Valve has been able to take a product already in the hands of consumers, and modify it so that when their forthcoming product hits the shelves, the continuity between the first and second installments of the game’s story is cohesive and correct. Not something that could be done with the game of Life or Clue.

Steam isn’t the only content distribution platform that has the ability to update and change the user experience after the sale is made, Amazon’s kindle had an unfortunate time with what is more or less the same story, and I’m sure that there is plenty of legal language and technical infrastructure in the iPod/Phone/Pad terms of service that allows Steve Jobs to legally annex users’ first born children.

As an increasing amount of products are imbued with connectivity and access to a platform, the way that companies think about the experience they deliver to users will need to change in kind. Companies will need to find ways to cleverly leverage these platforms to make their brand experience really resonate with customers–all the while avoiding pitfalls where they may alienate users and lose their trust.

In other words, the company takes a mixture of structured and unstructured data (including 150,000 + stories a day), applies an algorithm to it, and comes up with a single score that ranks the potential of each start-up they look at (40,000 and counting).

I have no clue how good it actually is right now (if anyone could let me know that would be great), but at minimum I think it’s a very cool idea. And I’m particularly intrigued by the idea that such an approach could be applied within a big enterprise to assess the potential of various ongoing projects.

Think about it: companies have (or should have) far more structured data about their own employees than YouNoodle has on start-ups; the unstructured data on the web is open to them as well. Now imagine if a company was using all the collaborative platform tools that are potentially at their disposal in order to know what people are working on, have worked on, how they’re connected together, etc. Might there be a way to take all of that information, and use it to come up with a per-project “YouNoodle Score”? And if there was, could you imagine how valuable that might be?

So at a high level, the major difference between the two is simple. The core of Yelp’s competitive advantage is it’s community of contributors; the core of Milo’s competitive advantage is driven by it’s inventory data. Both, of course, help people find products or services to purchase in their local area. My question to wikinomics readers is simple – given the option, which of the two would you prefer to own – and why? I’ve got a few of my own ideas on this, but would like to hear what other people think first…

Earlier this week I spoke at a conference hosted by the Royal Flemish Society of Engineers on the topic of complexity. The keynote speaker was Prof. Geoffrey West, former President of the Santa Fe Institute that pioneered the study of complexity science using a combination of economic theory and biology/physics (the founders were an economist and a physicist – both Nobel Laureates).  The end goal of complexity research is to develop new integrated conceptual frameworks for understanding the interdependence between various complex adaptive systems that define our world, including cities, financial systems, and the environment.

West’s research suggests we may be able to use the same rubric to study both cities, and forests, and maybe even economies. Complex adaptive systems share certain characteristics. Among other things, they: have many nodes, are interconnected, are adaptive and resilient, have many participants that create bottom-up disruptive change, result in emergent phenomena, and are often subject to unintended consequences. Sounds a lot like the type of emerging business ecosystems we talk about here on the Wikinomics blog. Collaboration between large groups of disperse and diverse individuals is extremely complex; when you add in financial systems, various incentives, supply chains, and a global information network, it becomes even more so.

West also talks about different types of networks—often layered on top of each other—as a characteristic of complex adaptive systems. The better we can understand networks and their interdependence, the better equipped we will be to understand complexity. He believes that underlying all complex systems are simple rules or patterns. For example, if you look at the metabolic rate, size, and lifespan of various organisms, you can determine that every biological organism grows in the same fundamental way. Here West asks some compelling questions: Are cities and companies just very large organisms satisfying the laws of biology? If so, why do all companies eventually die, while almost all cities survive? To this end, I think there’s probably great value in studying the evolution and “biology” of collaborative networks, informal networks within enterprises, business ecosystems, information flow and knowledge networks, and the multitude of other networks that collectively define Wikinomics-enabled business practices.

So, what are the best types of structures to deal with complexity? If we base our answer on how the Santa Fe Institute is structured, we find that the solution to complexity requires a multidisciplinary approach that involves participants that can bring different perspectives and diverse expertise. It also necessitates an open, distributed, and collaborative approach, a willingness to take risks, and a relatively small executive team that is able to meet face-to-face in order to build consensus and drive decision making at the highest level. This sounds remarkably similar to what we prescribe for next generation enterprises that want to thrive in today’s dynamic business ecosystems.

Another interesting thought at the conference came from Prof. Francis Heylighen who spoke of the Internet as a global brain that may act to combat complexity at a macro level by reinforcing strong signals between parties and building “synapses.” Tied to the he global brain theory is his theory of human stigmergy—a mechanism of spontaneous, indirect coordination between agents or actions (think of the way ants and other insects develop collective intelligence that enables coordinated and fairly complicated activities).

All of this is very much related to the research we’re conducting here at nGenera regarding what we call the highly-instrumented enterprise where actions are increasingly digitized, sensors and software track and analyze new sources of data, and create new understanding of complex systems and emergent phenomena. Some examples of these types of tools in a Wikinomics context might include reality mining tools that track the behaviours of individuals; automated sentiment analysis of text, voice, and even video; platforms that generate data and offer venues for consensus-building; and enterprise monitoring tools that map the informal networks and measure productivity within organizations. In fact, I’m sure there are many more connections to be made here, and look forward to thinking more about this one and hearing thoughts from our Wikinomics readers.

Vertical integration was popular in the latter part of the 19^th century and the first half of the 20^th century as a means to assure consistent and predictable supply chains for large-scale enterprises. Andrew Carnegie coined the term in the late 1800s to describe the structure of his company, U.S. Steel, which owned virtually their entire supply and distribution chain — the inputs to production (ore and coal mines), the means of production (steel mills) and the means of product distribution (steamship and railroad lines) – ergo a completely vertically integrated company.

Vertical integration was one of the key inventions used by industrialists to manage the proliferation of transaction costs involved in the orchestration of a scale enterprise. Industrialists at the time did not have the Internet nor did they have well-developed global financial markets or global supply chains. As a consequence these early large producers had to create their own infrastructure and transaction cost deflators through vertical integration. Otherwise the coordination, collaboration, and transaction costs would have overwhelmed their enterprises. As the industrial economy developed, other industries followed suit with other vertically integrated firms in the petroleum, automotive, and newspaper / communications industries. However, as economies matured and suppliers and supply chains became more reliable, the model was largely abandoned in favor of a more distributed model with specialized firms serving segments of the supply chain and many vertically integrated companies divested.

All of that is history: today is different. While vertical integration may be on the rise, entrepreneurs and executives operate with many more tools in their strategic arsenal. Let’s look at two tools that help shed light on the new approach to “going vertical:” the Internet and collaborative business platforms.

1. The Internet. The Internet is now a euphemism for the reality of a highly-interconnected always-on business environment. More to the point, this highly connected world has radically reduced collaboration and transaction costs. When vertical integration is applied in this context, the purchase of an element of the value chain is not used to corner the market or reduce transaction costs, but rather but rather to solidify the company’s position relative to the business ecosystem. So for example, the acquisition of Sun by Oracle, enables Oracle to embed its software in a hardware platform, similar to the iPhone or to the Google Nexus One, that in turn provides more options to work with others and build growth through an interconnected ecosystem (for commentary on the pending handset war between Google and Apple, see Laura Carrillo’s post). With the hardware, Oracle has the potential to involve more partners and grow the business beyond the bounds of a software provider. Consider also that Oracle can also entice other developers to create add-ons (apps) for the Oracle tool. One other benefit: Oracle potentially opens new markets with smaller companies that desire industrial strength databases.
2. Collaborative Business Platforms. In a prior post, I noted an emerging “best practice combination” of a collaborative business platform + a business ecosystem. Google needed to remove itself from Apple’s Board and create their own handset and move into head-to-head competition with Apple, RIM and Nokia. Google has the world’s most powerful and extensible collaborative platform with 100′s of millions of users. But, without a handset (i.e. a mobile device) it cannot differentiate itself nor assure its place in the increasingly mobile marketplace. This inability to garner sustained loyalty of its customers was a key threat to Google’s ecosystem. Without a branded mobile device, Google is just another “app provider.” This vertical integration play allows Google to instantiate its brand in a physical mobile device. Why is this better than instantiating its brand in an iPhone or a Blackberry? Because, the device enables Google to offer a more extensive set of apps and offer functionality that is critically dependent on firmware integration. It also creates new options for Google, who has been largely dependent on the hardware manufactures for it innovation model. Now the Google innovation maven can drive innovation in hardware and firmware.

So the new form of “going vertical” is a merged strategy that will operate in concert with collaborative business platforms and robust business ecosystems. In the case of Oracle, Apple and Google, the addition of hardware assets to their respective business portfolios increases their competitive options, extends their brand, provide a closer connection with their customers, provides a new “sandbox” for innovation, and offers new ways for partners to contribute to their business ecosystems. In the new style of vertical integration, the goal is not to go it alone, but rather to set up the game, so that more partners can participate in the supply chain thereby enhancing Oracle’s, Apple’s and Google’s prognosis for growth.

The expertise threshold to publish content was considerably higher on GeoCities than it is today, requiring at least bare-bones understanding of HTML, and very little WYSIWYG (if any) editing. Templates were added later, but by and large most things were done by hand. Today, it’s very easy for anyone to have a professional looking, CMS-powered blog that never breaks and scarcely if ever uses Comic Sans MS, but most of these lack the personality that dripped from nearly each and every tweaked template. User generated content lived, in large measure in one GeoCities section or another, so the problem of trying to distinguish “professional” from “amateur” content at least seemed easier.

The precursor to GeoCities was probably (and correct me if I’m wrong) Usenet. But instead of fading away as GeoCities seems to be doing, Usenet is still around and kicking, and is mostly used for piracy and debates about which Star Trek captain could best Darth Vader. However, the bulk of the pre-piracy history of Usenet is now indexed (if poorly) by Google. Knowing the right combination of dates and usernames, my grandchildren follow through my online argumentative career circa the late 90s. The argument has been made the internet should learn how to forget — so why not begin doing so with digital mausoleums like GeoCities and Usenet archives? On the other hand, for the first time we’ve got greater retention and documentation from the exciting time when everyone started to connect to everyone else.

But I digress. I’ve been looking around for any old GeoCities sites I may have made way back in the day, and, finding none, have little more to say than goodbye to one of the first content publishing platforms I ever used. Thanks again, GeoCities, for the public service you provided, it was a big and essential step for the internet.

This week I’ve had the pleasure of attending a very well executed Government 2.0 Summit held in Washington D.C. I was pleasantly surprised to find many ‘kindred spirits’ at the conference and additional examples that signal the rise New Public-Private Ecosystem.

Tim O’Reilly, whose firm conducted the conference, opened with a keynote that argued that the twin developments of open data and the power of shared platforms had the capacity to revolutionize government. He noted that platforms such as Google, eBay, Amazon, Craigslist and Apple’s iPhone App Store were successful because they harnessed user contributions to create enormous collective value – value way beyond what they could do alone. He then went on to argue that this same logic could be applied to the role of government services. He argued that the government needed to begin to think of itself as a platform. He pointed to how the investments made by the U.S. Department of Defense in globally positioned satellites (GPS) spurred others to develop applications, products and services, and spawned an entire industry.

Over 40 noteworthy examples of the government as a platform were seen at the conference. Here are some of the highlights:

• NASA’s Spacebook – “Lessons Learned from NASA’s Enterprise Social Network,” (Emma Antunes) that supports internal and external cross-fertilization of ideas and innovation at the juncture of different scientific disciplines.
• TSA’s IdeaFactory – “Transportation Security Administration’s IdeaFactory: Social Media and Securing America,” (Tina Cariola) that harnesses front line TSA employee’s ideas for innovation and continuous improvement at the TSA.
• Citizen budget input in Santa Cruz – “City of Santa Cruz Offers Blueprint for Solving CA Budget Crisis with Social Media,” (Peter Koht) was used to deal with radical budget cuts in municipal services and reallocate resources.
• State of Utah – “Utah Department of Public Safety Media Portal,” (Jeff Nigbur) – a shared portal that coordinates safety information, enables collaboration with private media organizations, and saves money for the State of Utah.
• Data and Platforms – “GeoEnabling Gov 2.0″ (Jack Dangermond) – GIS wizard, pioneer and founder of ESRI, illustrated how open data sources with powerful GIS tools and government platforms can enable “on-the-fly” mashups to support situational awareness and crisis situations in realtime, like the recent Station Wildfire in Los Angeles.

One of my favorite sessions was a panel on “Creating an Effective Platform,” with John Markoff (New York Times), Vinton Cerf (Google), Jack Dorsey (Twitter) and Tim Sparapani (Facebook). Markoff started off the session by distinguishing between “platforms of liberation,” and “platforms of control,” suggesting that platforms of liberation lead to creativity and innovation whereas platforms of control tend to limit creativity, stifle innovation and by implication in the worst case, be used to enslave or oppress. All the panel members reiterated that effective platforms (aka liberating platforms) have the ability to enlist broad voluntary participation. Cerf noted that a combination of design requirements from the Department of Defense for connectivity among all of their assets mixed with the values of the academic community fostered an open, cooperative architecture for the Internet. Dorsey, the creator of Twitter, noted that the concept of a utility, like the electricity grid or the Internet was his inspiration for Twitter – a reliable platform that can be used by others to build new capabilities. Sparapani noted that while Facebook has over 250 million members, it is also important to note that Facebook’s architecture also enlists and supports over a million independent developers that add value to the Facebook platform every day.

At the highest levels of the Obama administration the United States, with the appointments of Vivek Kundra as the first CIO of the United States and Aneesh Chopra as the U.S. CTO, is developing policy frameworks (e.g. The Open Government Directive) and new tools (e.g. data.gov and The Federal IT Dashboard) that will support collaborative platforms and open data. Both Mr. Kundra (see here) and Mr. Chopra (see here) provided additional information on these efforts at the conference.

So the story continues and I believe the mindshare is growing. Policy makers, practitioners and thought leaders are rising to the idea that a globally interconnected world affords new opportunities to reshape government. Open data unleashes the creative potential of citizens and private enterprise to create new services, software applications, and insights that the government cannot do by itself. The shear numbers tell the story. Millions of citizens and hundreds of thousands of companies of all sizes uniting to independently create value and enhance the common good. The proprietary ownership or licensing of that data to a few (Gov 1.0) seriously limits the power of the New Public Private Ecosystem. Now not all government data should be open and privacy must be safeguarded to be sure. Nonetheless, the vast proportion of government data falls under the non-private category.

The same logic applies to collaborative platforms. In contrast to open data, however, collaborative platforms require investment and development. As we further explore the New Public-Private Ecosystem, policy makers, entrepreneurs, and the market will need to work out where it is best for the public sector to invest and where the private sector should invest. The dividing line is not clear. Only 10 years ago, one would not expect Twitter to emerge from the private sector; utilities were the province of governments. But the good news is that democracies, republics, and open societies have the natural open forums to debate and collaborate to find the answer. Closed societies force themselves into a comparative disadvantage on the world scene – they only harness a small proportion of their collective creative spirit. We are not likely to see the New Public-Private Ecosystems and its benefits emerge in those nations.

This is a new age of collaboration and the train has left the station. Distinctions between less government or more government are the realm of old categories and thinking. Government may well get smaller – a happy thought for citizens. Howeverit will get smaller, not through fewer services, but rather through the power of collaborative platforms, open data, and the New Public-Private Ecosystem, and in the final analysis, private citizens will have more services and a play a greater role in the development and delivery of those services. Everyone can win: the dedicated public servant, the engaged citizen, the investor, and the company.

Envision a world where networks of public institutions and private companies seamlessly work together.  In this next generation world, each member of an ecosystem divides their collective resources and labor according to those functions and capabilities best performed within each respective entity.   The ecosystem has a unique division of labor, clear decision rights, and defined roles across tens to thousands of individual organizations. Such new levels of collaboration arise from the economic and technological capabilities available in a massively internetworked planet.

True, public-private partnerships are not new – in the 20^th century we saw many in areas ranging from space exploration to entrepreneurial innovation.  However, the combination of online platforms and networked ecosystems transforms their underlying form and function. Public-Private Ecosystems fortified with powerful online platforms can drive entirely new ways to involve citizens, divide work activities among traditionally private and public enterprises and harness talent in new ways for the common good.  Here are three examples that point to the potential and key elements:

• Crossroads Bank for Social Security, Belguim.  Maryantonett Flumian, a fellow colleague and frequent contributor to our Government 2.0 Insight program, tells the story of the Crossroads Bank for Social Security (CBSS) – a platform that links 3,000 private and public sector agencies to cooperatively deliver services for the citizens of Belgium.  The “bank” itself holds no information – the information of the citizens and the services delivered travel among the right agencies across the right public, private and jurisdictional boundaries, at the right time.  To quote Flumian, “The work of the CBSS has resulted in dramatic reductions in forms, decreased burden on employers, and streamlined access to better social services. It is estimated that since 2002 the system has saved companies 1.7 billion Euros a year in administrative costs.”
• City of Frieburg, Germany.  One of our student interns, Alex Marshall, studied a software platform developed by the local government of the City of Freiburg and TuTech Innovation (see post).  By architecting a web-accessible system of “budget sliders,” Freiburg enabled citizens (1,291 participants) to increase or decrease the spending levels of 22 proposed budget line items. The city gained new insight into the desires of its inhabitants and in the final analysis readjusted some of its spending priorities.  Similar examples can now be seen in Hamburg, Germany and Belo Horizonte, Brazil.
• Apps for Democracy, United States. Vivek Kundra, the first Chief Information Officer (CIO) for United States Federal Government, came to Barack Obama’s attention through his innovative approach to leveraging government databases as Chief Technology Officer for the District of Columbia. Kundra found that by taking existing government databases and adding common software interfaces, he could generate a free-form public-private platform and ecosystem of the District of Columbia staff, external software professionals, private firms, and creative citizens.  In contrast to the prior examples, the data grounded the effort, the platform was mashed-up from a collection of open source software, and an ecosystem formed through the independent activities of interested parties to find new ways to use the data for the public good – ways that the District of Columbia neither had the time or resources to find by themselves.  Now Kundra is applying the same logic to the U.S. Federal Government through a series of open data initiatives (see http://www.data.gov).

So what have we learned and what are the implications for citizens, governments and public policy?

1. Focus on differential advantage.  Anyone who manages an organization knows that appropriate division of labor is often a prerequisite for success. We need to apply the same thinking across enterprises and institutions in this new massively networked world.  Let’s extend the lesson of Belgium’s CBSS to link capabilities regardless of jurisdiction utilizing the strengths of each organization.  In a networked world why should we duplicate efforts across enterprises or start new enterprises when enterprises work together?  Such a mindset goes a long way to unbundling our preconceptions of who should do what and taps into a latent stream of broad societal efficiencies. What latent capabilities exist that can be linked when we reexamine particular types of work that must be done for the public good across the traditional divide of public and private entities?
2. Consummate network externalities.  Let’s not be shy.  In most developed nations we have a surplus of 20^th and sometimes 21^st century capabilities locked down and isolated in balkanized 18^th century structures.  As the world has become networked so too we need to re-examine how we have created divisions of labor among what we call public and private.  Sure there are legal and jurisdictional boundaries that protect the common good and regulate political and economic power.  However, these new examples indicate that not all divisions are necessary for good democracy or regulatory imperatives.
3. Information does not need to be consolidated in one place to do good. As seen in both the CBSS and the District of Columbia examples, in the networked world a free flow of information can enable previously siloed organizations to collaborate and revise their division of labor.  The result: potential new efficiencies for society and economic benefits from a better use of assets and capabilities.

While many details need to be worked out in the new public-private ecosystem, including privacy, legal, governance and regulatory factors, the emergence of these new structures, processes and participants could usher in a more effective set of arrangements for the common good.

Apple understands that business platforms fundamentally change the rules of competition and accelerate cumulative business performance. Competitive business platforms drive and nurture the latest business innovations – mass collaboration, social networking, community formation, ecosystems, global cooperation, prosumerism, community branding, transparency, options portfolios and real time analytics to mention a few. And they also do the same for “old-fashioned” ones as well – things like business process management, customer intimacy, and supply chain management. We’ve studied business platforms extensively at nGenera Insight and Apple is not alone. But Apple has taken the approach and out-executed almost everyone else on the planet.

While many see Apple as enslaved to secrecy, unresponsive to external input, and obsessed with product control, the company has put many of those behaviors behind them. In fact, Apple is writing the book on 21^st Century style collaborative business models and continuous business strategy.Nokia and RIM became Apple students in the last 12 months – both have adopted a business platform approach. Ironically, RIM had the makings of a business platform long before Apple, but did not really exploit it. AT&T is being schooled again about business platforms as it copes with Apple’s latest generation iPhone 3Gs release (it seems that AT&T’s network can’t keep up with new iPhone features such as tethering and MMS messaging). Verizon is playing catch-up because it only recently saw the light – but rumors suggest it may have a deal with Apple on the “iTablet.” Meanwhile, it appears that Motorola still doesn’t get it.

But Motorola’s not alone. Almost 10 years after Apple’s launch of the iPod, iTunes and the iTunes Store, most corporations either stand in awe of Apple’s accomplishments, or see Apple’s approach as completely irrelevant to their businesses. They’re mistaken. These developments signal a new formula for business success that extends beyond the glitzy world of Hollywood or the high tech software and telecommunications industries. More importantly, leading firms in other industries have used the recession to put plans in place.

Let’s take a look at what the iPod, iTunes, the iPhone and the App Store really mean for business. A bit of history first. Apple Inc. launched iTunes, the now famous digital music application, on January 9, 2001 for the Macintosh computer. A little over 9 months later Apple launched the 1^st Generation iPod on October 23, 2001. About 2 years later Apple launched the iTunes Store on April 28, 2003. The iPhone was released 4 years later on June 29, 2007 after the runaway success of the iPod-iTunes-iTunes Store combo that revolutionized the retail music industry. The iPhone App Store was launched on July 8, 2008 with 500 applications, 125 of which were free. Today the iTunes Store is a digital media store encompassing all forms of digital media including music, games, software applications, podcasts, and a growing collection of video assets.

In the process, Apple sold in excess of 200 Million iPod units and over 40 Million iPhones. Apple sold more than 1 Million of the new 3Gs iPhones in the first weekend of its introduction in July. The iTunes store has sold 8 billion songs since inception, and is the undisputed leader in digital music sales. Moreover, Apple revealed in April of 2009 that the App Store introduced in July of 2008 had already hit the 1 Billion mark in downloaded applications. By late July of 2009, Apple reported that its extended community of iPhone developers, which split revenue with Apple on a 70/30 basis had produced over 65,000 applications that were approved by Apple and available for download on the App Store. At the end of 2001, Apple’s annual revenues were approximately $5.3 Billion USD. At the end of 2008, annual revenues had grown to approximately $32.4 Billion.

Here’s what Apple has learned and what I believe all companies should heed – the undeniable superiority of the 21^st Century business model:

1. Products must become business platforms that grow through collaboration. The iPhone, the iTouch, and iPod are not music players and multimedia phone – ergo products – so much as they are business platforms. A business platform is the totality of the physical product (e.g. iPhone), the embedded software inside the product (iPhone OS), the collaborative platform (iTunes+App Store), the economic community (the iPhone ecosystem which includes AT&T and other wireless providers, Google, Yahoo, the iPhone developers, related iPhone social networks and communities, and the iPhone global industrial complex (core manufacturers – e.g. Intel, accessory providers etc.).
2. Business platforms create superb externalities and a powerful ecosystem. Business platforms create a sort of lingua franca for all of the participants. In other words the business platform contains a common understanding for business transactions, business rules, business communication, technical specifications, interface standards and requirements. As a consequence transaction costs are minimized for all parties and efficiency results. For example, embedded in the iPhone OS, the iPhone SDK (systems development kit), the App Store and the iTunes store are the complete “rules of the road” for operating in the iPhone ecosystem. The result is a cumulative transparency that enables tens of thousands of participants to collaborate asynchronously and independently. In so doing they create economic value, a continuous wellspring of innovation and mutually extend the overall value of the economic community. They also rapidly extend the capabilities of Apple’s core product way beyond what Apple could ever do so on its own.
3. Business platforms create a learning platform that spawns communities of interest and communities of practice. A multitude of social networks and communities surrounding Apple’s iPhone business platform. Numerous Apple-sponsored and independent communities trade ideas, IP and practices daily and cajole and attempt to predict Apple’s next move.
4. Business platforms generate untold business analytics for the platform’s owner and participants. Because all elements of the business platform are networked, the platform generates a prodigious amount of valuable information about the product, the ecosystem, the participants, and the customers in realtime. Apple knows the score for each element of the platform and uses the information to fix, improve, extend and enhance the product and ultimately delight the customer.
5. Business platforms generate a superior portfolio of strategic options. The generation and management of options remains at the core of business strategy. Business growth depends upon the portfolio of business options available to the executive team. Traditional business models depend upon internal knowledge and internal innovation processes to generate new product ideas, new ventures and appropriate acquisition strategies for growth. Such traditional processes are anemic when compared to an enterprise armed with a 21^st Century collaborative business platform. Who has more options for the future, Apple or Motorola? Who has a richer options portfolio on potential products and services? Who has better information by which to value those options? For an investor looking to make an investment, which company has greater future value? The company with a business platform or a company with a 20^th Century, product-focused, internally driven innovation engine. I know my pick.

In subsequent blogs I will examine what we’ve learned about managing business platforms and dealing with negative and positional externalities, what traditional firms must do to change and embrace the rise of business platforms, the power of business platforms in Collaborative Enterprise Management, and the role that business platforms play in continuous business strategy.

To Apple I say: mega kudos, keep up the good work – it’s good for the economy and good for business. Thanks for letting the cat out of the bag.

From ancient philosophers to modern day journalists, the rules of engagement for discourse and collaboration have always been hot topics. In ancient times mass collaboration was limited to communities building churches, discussion in public squares, or monks taking turns to painstakingly write text. Today, in addition to facilitating public debate online, mass collaboration has the ability to build robust and super efficient software. Collaboration is central to Day Software’s ethos. Not only is Day Software born through mass collaboration but its software has social collaboration central to its user experience. We also embrace collaboration with our competitors. The last area is one I want to focus on for this post.

Last month we collaborated with one of our key competitors, Nuxeo, in order to advance an industry standard, which will benefit the content management industry as a whole. We used the Apache Software Foundation (ASF) as our neutral “workspace”. The Apache Software Foundation provides support for the Apache community of Open Source software projects.

That word “community” is key.We teamed up with Nuxeo to advance the Content Management Interoperability Services (CMIS) standard via Apache. CMIS is designed to benefit the growing number companies that need to securely manage a wide variety of online and offline content from different applications in a central hub. This is just one of many projects that Day collaborates with their peers via Apache. On the Jackrabbit project, numerous vendors leverage the community-driven efforts of building a standardized Enterprise Content Management (ECM) repository based on open standards

Despite our competitive differences, both Nuxeo and Day share the same collaborative Open Source mindset that is central and unique to the ASF. In contrast to the more onerous General Public Licence (GPL) model, The ASF model lowers the legal and creative barriers for commercial collaboration and innovation. When you sign up to Apache your day job (excuse the pun) is irrelevant. It’s an environment ancient philosophers would be proud of; the Apache community is working together, openly, equally, without bias and everyone’s contribution is valid.

Open Source is beneficial specifically because it is not proprietary. That means that the user is not locked in to any one vendor. In community Open Source, if a given vendor were to stop innovating, the community can take the product forward. Apache enforces a simple rule: new concepts under incubation do not graduate until there is a proper community that is not beholden to any one vendor. Apache also enforces the principle benefit of Open Source: no one vendor is responsible for driving or inhibiting innovation. Innovation happens.

Commercial Open Source firms – the ones driving much press these days – do not always follow this model. For many commercial Open Source firms, community and collaboration with their peers does not happen. This limits the benefits of the Open Source model, because while the software is accessible, true participation and joint collaboration does not happen.

Contrary to conventional wisdom, collaboration actually helps us to win marketshare and revenue. By serving up the basic product interoperability that developers and customers demand, collaboration frees up our time to focus on unique customer and market driven product innovations and invest more time in services and support. We are not afraid to say we are reaping the rewards of being a collaborative company. Open Source can provide the basis for a robust and profitable business model.

For us Open Source is proving to be a very strong, yet flexible backbone for our business. This should serve as an example to other technology companies that being Open Source is of benefit both to your customers, product development and profitability. The more competitors that join the Open Source community, the better all our products and services will be.

On this platform, everyone contributes to a library of content that can be used by anyone to do anything, the payoff for sharing your content is that everyone else has access to yours. I think Larry Lessig would agree.

Unfortunately, the interface for accomplishing such a level of collaboration doesn’t yet exist, but that doesn’t mean it hasn’t already started happening. Introducing thru-you.com — a site run by YouTuber ‘Kutiman’ that remixes unrelated existing user-submitted YouTube musical content into new pieces; making songs played by ‘bands’ whose members have never met one another. The result is pretty cool to behold:

Under the editorial control of Kutiman, a massive pool of unrelated source material has been crafted together into an original piece. Conceptually, this is reminiscent of the sampling done in hip-hop, but from a much larger, more diverse pool.

Generating these movies required downloading each of the YouTube videos, converting them to an editor-friendly format, stitching them together and then uploading them again — something that is likely beyond most casual YouTubers’ technical abilities. It won’t always be this way, and soon I believe new technologies will emerge that allow all YouTube users to better leverage the content that their entire community has generated. Once this happens, the remix-culture will really be in full swing.

Part and parcel with viewing YouTube as a platform with open content that can be used and displayed however a content remixer likes is a new way to view YouTube videos: YooouuuTuuube.com. YooouuuTuuube.com takes a normal YouTube video and spits out the frames on a grid before your eyes. The result is pretty different from the normal experience of watching a YouTube video, but it shows the new kind of media that can be created when existing media is open (or at least taken) for use by others. To see it in action, check out this YooouuuTuuube’d version of ‘Junior Kickstart’ by The Go! Team — Enjoy!

I like the idea, a lot. However, I think it’s a bit early to bet on one horse – so why not add more to the mix. I like twitter’s generally open approach, so why can’t they play in this space.

So, here’s a proposal on how anyone can use twitter as an open authentication scheme to log into their site:

The first step is a login page (screenshot below) which gives you a unique one-time authentication key that is used to identify your session. In this example the one-time code is “82kjx_OneTimeAccessCode_IeZh9els” and it is designed to be tweeted (probably best to DM) to the web site owner’s account (“SiteTwitterName”in this case). By DM’ing the one-time code to the site owner you link your session to a specific twitter account, and by DM’ing it, you provide proof that you own that twitter account. To make this easier to tweet, you could add a “copy to clipboard link”, or “tweet to login” button/link which would automatically prepopulate the tweet in a browser window (see next screenshot).

Below is a sample of what the page might look like after you click the “tweet this to login” button.  You can imagine the button creating a popup window like this (if the browser allows popup windows). On twitter, it’s easy to prepopulate a page with a ready-to-tweet message like this. Just open a page with the URL:

http://twitter.com/home/?status=d%20SiteTwitterName%2082kjx_OneTimeAccessCode_leZh9els

And that link should give you a page similar to the one below:

Then, once you send the DM through twitter. The website can use the twitter API to read the DM and then make a connection between your twitter ID and the unique session key in order to authenticate you. At that point, your original login page can be refreshed, logging you in automatically. Voila, you are logged into a website using your twitterID as the account name:

A login scheme like this would work with twitter, but equally well with any messaging or IM service that’s sufficiently quick and also has an API. One of the best things about it is that it doesn’t require any endorsement of the service provider in order to use it for authentication either. You can even imagine doing this via a mobile phone too (either through cameraphone image, QR code (discussed here and here), IVR, OCR, or even a “sound” produced by the website that you could hold your phone up to).

Any suggestions about holes or problems with this scheme that I may be missing? Or ideas for improvements?

If anyone would like to implement the first working demo of this scheme it would be a great contribution to the public good.  I’d love to credit you with it here. Happy to share any demo code for it too if you wish.

…please contact me via twitter @crasheral if you would like to help kickstart this.

But the actual deal between the two is less about cash then it is about technology exchange and access to their respective dealerships. Fiat, for example, is keen to bring its line of compact cars to the US, and is willing to trade access to its successful small-car platforms and fuel-efficient technologies to do so. Seems like a high price to pay for real estate, non?

Which brings us to the magic of US car dealerships:

• GM has more than 6,400 dealers in the US.
• Ford has over 4,300 in the US.
• Chrysler (with Jeep and Dodge) have over 3,300.
• And finally, Toyota/Lexus has (just) 1,400 US dealers.
• This works out to nearly 700,000 direct employees across the US dealer network.
• And with annual sales of 14-15 million new car sales per year, this works out to about 750 units sold per dealer.

For the most part, these dealerships operate as single-brand sales outlets (proprietary models one might say). Subsequently, the framework for sales across the US leaves the industry with a heavy, and somewhat immoveable burden of dealers that contributes to their inability to restructure.

But does it have to be this way?

There may or may not be precedent for something else.

Example 1 is Ontario’s Brewers Retail – the Beer Store. “Established in 1927, The Beer Store is the primary distribution and sales channel for beer in Ontario. It sells beer to the public under the authority of the Liquor Control Act and is owned by Labatt Brewing Company Ltd., Molson Canada and Sleeman Breweries Ltd.” I.e. It acts as a platform for distribution of various brands. Brewers that wish to sell through The Beer Store can pay a per store listing fee or a single fee for the entire system depending on the number of stores they wish to sell in.

Example 2 is the Credit Card – which for argument’s sake we’ll limit to Visa and Mastercard. Prior to their respective IPOs, both functioned as cooperatives, owned equally by their networks of 21,000 and 25,000 financial institutions respectively, wherein each institution would purchase a license for use of the network.

Both of these examples saw individual organizations choose the efficiencies and lower transaction costs of a distributed and shared network over a proprietary model. And while my colleague Denis makes a good point that in the auto industry the sticker price of a purchase is the equivalent of 1000 or so cases a beer, and thus makes keeping the customer as close as possible more important, I can’t help but think that a shared platform for sales would be more efficient and might just hep build a competitive and user-centred industry.

I’ll admit I’m not an expert on the industry so I’d love to know what everyone else thinks. I’ll also admit that I submitted a similar idea for the financial services industry about 8 years ago when I worked at large Canadian bank and got told thanks but no thanks! So maybe it’s already being done? Maybe it’s not possible?

Let me know.

Jive’s system is called “the betty,” and is centered around ease of use. The white block in the left of the picture is a wireless router/dsl modem, it plugs into a phone jack and gives the social networking unit internet-access.

To add one another as “friends,” users exchange friend-pass cards, which contains an RFID chip that links to an account. The user takes the friend-pass and places it in one of three locations on the screen. One for the profile, one for messaging, and one to see specific updates.What strikes me most about the prototype is that it’s designed to promote social networking from the abstract into the physical: friends are represented almost by business cards, and you have something to show for the “relationship.”

There are some aspects of the prototype that I’m not clear on, such as how messages are composed, how photos are uploaded, and how the interface is used above and beyond placing the rfid passes on the screen. But, it is a great acknowledgement of the fact that older people are every bit as social as the rest of us, and they have been largely left behind by the social networking revolution.

Finally, once the unit has been purchased, connecting to the network is free. The router is pre-programmed with ISP login information, and the network connection pays for itself by displaying targeted ads to the unit’s user.

All of this makes for the beginning of a potential new social network for seniors, somehow I’m alright with that, as I’m not exactly sure how I’d feel about a facebook friend request from my grandparents…

Central to this development is an increased sense of autonomy from human interactions (such as self-repair, stabilizing feedback loops, and self-directed traffic management) and “smartness,”  — something that already exists in an ever-increasing form in the computational clouds of Google and Amazon, which are constantly learning about how it is that we use language, and form an understanding about how collective human behavior can be used to anticipate the actions of an individual.

These two systems are able to “manufacture intelligence” and sell it to the humans that participate in the system (by adding raw usage-information that these clouds use to refine their understanding). This money is then invested by the curators of the cloud to expand its computational power and scope, and the organism grows. While it seems like there’s an intentional blurring of the line between the hardware/software itself, and the companies that use them to deliver the services, I think it’s fair to respond that a corporation is a fairly abstract entity, and if Google were able to do it’s job of organizing the world’s information and making it universally accessible and useful with fewer employees and more computing power, its shareholders wouldn’t mind so long as the share price continued to rise. So such an organism could be viable as a company.

The final phase of the development towards something lifelike (or maybe even alive) would be self awareness, in which the Internet could map itselfs to determine whether the information it’s delivering comes form within or from without.

All of this, I suspect and hope, is still a few years away. So we don’t yet need upper-year university ethics courses on the proper and just treatment of packets and subroutines, but I find it gives a new perspective to my everyday internet-habits if I assume that each search I make, and every book I buy online, could be contributing, to an infinitessimal degree, to the creation and emergence of a new form of life; and that this process is happening in a surprisingly innocuous and organic way.

So why are they “worth” that much? Well, according to their CEO Dr. Lars Buttler (a former Electronic Arts executive who worked on Might and Magic and Heroes), the reason is two-fold:

• First, Trion’s goal is to design a MMOG that can truly operate cross-platform. This means that Trion’s games will work across devices ranging from your PC, your gaming console, and web-enabled mobile phones.
• Second, Buttler is convinced that Trion’s other ace is the premise that he calls “dynamic gaming”. This “dynamic gaming” seems to be a flavour of the traditional server-based MMOGs, but Trion exercises more control over the environment, aiming to give the user a “unique” experience. Here, the game can change overnight, at the behest of Trion’s designers.

Superficially, this “dynamic gaming” concept seems more like an attempt to create a new buzzword rather than provide some tangible, novel technology. But, of course, some very clever investors feel like Trion is a hundred-million-dollar-plus investment. Digging deeper, Bertelsmann, Peacock Equity (NBC’s VC arm edit: A JV between NBC Universal and GE Commercial Finance – Media, Communications & Entertainment. Thanks, Alex!), and Time Warner all have vested interests, and Trion has teamed up NBC to issue games that coincide with a yet-to-be-released TV show on the Sci-Fi Channel. This seems like a MMOG version of Andrea’s last article on LiveHive, a Waterloo, Ontario-based company. So that will definitely be a market-share battle to watch, but their markets are still pretty separate.

So the burning question is: Have those savvy investors misspent their $70MM? Kind of. It’s been two years in the making; HP has firmly backed the server side of Trion’s business for over a year. They have surplus cash, and Buttler has been poaching high-end talent from his former stomping grounds at EA. What’s the hold up?

I too feel that cloud-centric gaming is where the EAs and Blizzard Entertainments of the world will compete for market share. The cross-platform MMOG concept is compelling, but it’s highly unlikely that Trion will be allowed to easily branch out to other platforms given their relationship with Bertelsmann (who shares half of the control of Sony BMG). The PS3 is their first console they’re trying it on. That’s going to make it tough unseating the incumbents World of Warcraft or EVE Online. Am I missing the Killer-App part of the pitch? Maybe I’m not ready to be a VC.

Valve, the company who developed Portal, has a long history of openness with their games. With their first game, Half-Life, Valve released a Software Development Kit (SDK) that allowed amateur game designers to build their own games on top of the existing engine. Counter-Strike, arguably the most popular FPS game ever, was the result of a fan-made project built on top of the Half-Life engine. Valve ended up hiring the team behind Counter-Strike, and eventually made a sequel.

Staying true to form, Valve released an SDK for Portal. So far as I knew, it was mostly used to make new levels with new challenges. Monday, it was announced that for the past eight months, a fan-made prequel, Portal Prelude, has been silently under development. It serves not only to add content to the existing game, but also greatly expand the scope of the story. In fact, Valve has even approached the team to offer their support and congratulations.

The team released a trailer for their project:

It’s tremendously professional.

Valve has done a fantastic job of building a loyal community around their games, and they’re very relaxed about amateur teams using their characters and settings to tell new stories, it’s very reminiscent of the Japanese manga culture. But instead of just providing their fans with material to adapt, Valve also gives them first-rate tool to work with. Based on the Portal: Prelude trailer, those tools look to be usable to great effect.

Valve, and other companies that open their games, are providing their consumers, and potential employees, with far more than a game, they’re selling a platform (and access to a loyal and enthusiastic community). It’s a fantastic example of openness and prosumption, and with benefits shared among everyone involved. This fan made extension of the story is fitting, given that the original development team was a bunch of students who caught the eye of Valve at a trade show, they were brought on board. Maybe the same thing will happen to this team…

Prelude is due out this month, here’s to hoping that my excitement isn’t misplaced!

If I was writing this post a week ago, it probably would have been a feel good story about wikinomics, but the wheels have recently fallen off the proverbial bus. This is a development equally worthy of exploring in relation to the challenges that come with embracing wikinomics principles – and particularly those that emerge when you only embrace a few of them. Of greatest interest to me – if more stories keep popping up like this, it could be a dramatic blow to more open, collaborative innovation processes. That would be a shame.

TechCrunch picked up the story on August 22nd, when Ning suddenly removed all of the WL widgets, without warning to anyone, from their network. This decision which clearly angered the company, as well as the thousands of customers who had spent time and money with WL in order to optimize their offerings. Based on the emails that WL has published on the web, this is the gist of Ning’s complaint:

Over the past few months, WidgetLaboratory’s applications have caused multiple and significant technical degradations to the Ning Platform. In point of fact, your code has broken numerous times and has negatively affected a large number of Networks in addition to the Ning Platform.

This sounds fair enough – having a single company break the platform repeatedly would seem to be a problem. However, WL vehemently disagrees with this assessment. If you read through the emails they point the finger for whatever platform problems exist squarely at Ning (particularly highlighting when Ning implemented Dojo changes that broke many applications without bothering to inform any of their partner developers in advance). They also indicate the shutdown may be more about anti-competitive behavior (a.k.a. they’re making too much money and Ning wants it, and/or Ning is worried they’ll lose customers and revenue going forward). From their POV, this was a win-win-win relationship, and they don’t understand why Ning would do this unless there were ulterior motives.

What’s the truth? it’s hard to say without knowing EVERYTHING that’s gone on, but it’s even harder to say Ning has went about anything in the right way. If you work through the email train, there is an ongoing (if occasionally heated) dialog through to August 7th between Spencer Forman at WL and CEO Gina Bianchini of Ning, at which point she indicates the communication will be handed off to Jay for technical issues, Bob Goorah (general counsel) for the terms of service, and Jason Rosenthal for business conversations (who was starting on the 15th). The next email in the chain is this:

Dear Spencer,
I am writing to inform you that your network (widgetlaboratory.ning.com) and third party applications have been removed for violations of our Terms of Service. Please direct all correspondence regarding this matter to my attention. Thank you.
Bob Ghoorah
General Counsel
Ning, Inc.

So much for business and technical I guess – only the lawyer now, and there appears to be no interest in finding an amicable solution. WL, as noted, has posted the email correspondence on the web. Ning’s initial public response, in contrast, was this:

This morning we removed WidgetLaboratory, a third party application developer, from the Ning Platform for violating Ning’s Terms of Service. WidgetLaboratory provided independently developed applications that could be added to a social network on the Ning Platform by a Network Creator. While we try to be as transparent as possible, it’s our long standing policy not to comment on specific cases where we remove networks or third party developers from the Ning Platform so we will not be providing any additional details publicly.

You have to love that – we try to be as transparent as possible… but we’re not going to tell you anything. How transparent. Lawyer Bob continued to respond to several emails from Spencer, and helpfully reminded him of the terms of service:

Ning has the right (at its sole discretion) to delete or deactivate your account, block your email or IP address, or otherwise terminate your access to or use of the Ning Platform or any Network, or remove and discard any Code or Content within any Network, without notice and for any reason.

While legally this is very clear, one has to imagine that setting a precedent of unilaterally shutting down the most successful widget provider on the platform might not be good for encouraging other developers, or encouraging customers to pay for premium services that could/ will quickly be axed. If you read through the responses on various blog posts (including this one on the Ning developer platform), you see this come up repeatedly – and you notice that most seem to be on WL’s side.

Gina later posted a more thorough response which has some more positive responses – though it’s interesting to note many users seemed to be asking for Ning to offer them the applications that WL used to offer them, which is a very slippery slope indeed. It’s even more slippery when Gina notes that:

Our focus at this point is in assisting Network Creators in finding alternatives to features that they may have been using from WidgetLaboratory. If we could fill these holes today, we would. We will start this effort shortly.

There’s no way around it – this looks really bad. It’s bad to have a model where 3rd party players are encouraged to get involved, grow a business with valuable offerings they develop and prove, and then get shut down while the “parent” company and customers clamor over replacements for them. Not sure how that can be sugarcoated.

There’s also another wrinkle in this – if you check out the August 7th email, you’ll note that one of Ning’s other complaints is that WL sometimes asks for user names and passwords, which is also against the terms of service. WL points out that they do this as a service for paying customers, who WANT to provide it to them, so they can go in there and… diagnose and trouble shoot problems with their licensed and purchased products. That seems perfectly sensible, and again to everyone’s benefit – but apparently Ning does not agree. Even while complaining that WL code regularly breaks down and hurts the network. Curious.

So overall there are a lot of disconnects here, and as more information comes out it might clear up – but I doubt it. I think it’s fair to say at this point that if you want to learn how to deal with such “open” development platforms and partnerships, do pretty much the opposite of what Ning did. Even if they had to shut down WL, they could have went about it in a far better way. Secondly, saying that you try to be transparent, and then sharing nothing, is dumb. Finally, if it’s the innovation of 3rd party developers that is helping your company so much, you really have to think about what the long-term implications are when you unilaterally axe your top performer and then very shortly after that talk about replacing their offerings being your top priority.

Enkin is a mapping system that bridges the digital and real worlds. Typical mapping applications show a bird’s eye view whatever location is being investigated. What Enkin does is something called “Live Mode”, which provides an overlay of rich digital information that you use when you look at anything. That probably isn’t very clear, so check out the movie. Skip to about 2:40 for the really cool stuff:

Using the camera and screen, with labels injected, the Android powered mobile device becomes something of a magical lense that can be used to provide us with digital information about the world, overlayed on the world itself, as intermediated by the device. So far the Enkin guys have set this up to work with locations that have been tagged in their map view, but imagine the possibilities if it could integrate with all of the Geodata that’s tagged in Google Earth. You could also integrate this with social mobility services, and set your name to public, then strangers on the street could take a look at you through their phone and see your name floating above your head like in a videogame. Businesses could also geotag deals that they are running, and you’d set your Enkin-enabled device in “deal hunter live mode” where you’d see overlays on businesses including distance and deal. The list goes on and the possibilities are great.

What kinds of overlays of the digital onto the real would you like to see?

One rainy day earlier this summer, nGenera’s Gov 2.0 Program Director, Dan Herman, locked three summer interns in a room (Ben and Jude, and I) and asked us to think about what life – and government – would be like ten years from now. One of the results was the following short story about a day in the life of a man named Donald, in the year 2018. Hope you enjoy.

7:00 AM. The alarm rang, and Donald pressed the confirm button to silence it. His bedroom monitor switched on and began playing his morning video feeds.

“Luke Smith,” said the newscaster on the monitor, “who only yesterday controlled more proxy votes than any other advisor, has been reduced to irrelevance. Almost all of Smith’s supporters abandoned him last night after he tried to use their proxy votes to pass a bill that would have allowed him to collect millions of dollars through a dummy public service provider.” The country’s voting platform gave all citizens the ability to vote on every bill. But many gave their votes by proxy to advisors.

“I wonder how Smith thought he could get away with it,” thought Donald. Open Collaboration Platforms (OCP) were now mandatory for any agency that received government funds. They gave citizens access to all of an organization’s internal activities, including documents and meeting. Not only had these allowed greater collaboration between governments, businesses, citizens, and civil society; they had greatly enhanced oversight, and made it difficult for anyone to get away with corruption.

After the newscast, an ad played. These ads helped pay for the other content Donald watched. His friend Ralph had forwarded this ad to him. “I just signed up. Its great,” said a message from Ralph. The ad was for a new bank account from UniBank. It had low credit rates and high savings rates. Donald thought it sounded good, especially since profits were being used to support internet access for children in the developing world.

Donald decided to follow the link from the ad to the bank’s website. He clicked on Open a New Account and was taken to the government’s Central ID Management System (CIDMS). CIDMS linked all private and public sector databases that contain personal information, both to facilitate data sharing across databases, and to give individuals the ability to manage their privacy.

Donald confirmed that he would like to allow UniBank to create a record of him in their database. He then received a request from UniBank for access to his credit history. He allowed it. He was then asked if we would like to share his name and contact information with UniBank. Donald declined. Because all of his information is shared over the CIDMS, UniBank didn’t need any personal information about Donald to confirm the information he had shared. Providing his name and contact information might have allowed them to give him a more personalized service, but Donald didn’t trust them not to share his information with other companies.

After the account was setup, Donald electronically transferred all of his money and information from his old bank account. He saw that he had a bill from the Hospital of New Delhi. Donald was getting surgery there the following week. He was originally going to go to the local hospital, but there was less of a wait at New Delhi, and besides, it was supposed to be much better. The bill had already been automatically forwarded to, and paid by, the government’s Health Fund. He had also just received his latest electronic paycheck. It outlined exactly where his taxes went: ten percent to education, five percent to the police …

Looking at the clock, Donald realized it was already 7:30. He had to get going. He rolled out of bed, got ready for work, and headed out the door, remembering to take the trash to the curb. In his car, Donald logged into the Car Pool System (CPS). People who wanted a ride could enter a request into the CPS. Car owners were then notified of people they could pickup along their route. In return, the car owner got paid a portion of each passenger’s daily transit allowance.

One of the passengers Donald picked up that morning was Sarah Johnson, the president of the neighborhood council. The council had been formed early in the year, when over half of the neighborhood agreed to create one in an e-vote. Neighborhood councils had authority to improve neighborhood roads and parks, put-up stop signs, and run community programs. In order to pay for their work, neighborhood councils were given money from the city on a per-capita basis.

“You guys really need to improve that park,” Donald said, referring to the park across from his house.

“We’re working on it. You should check out the design proposals on the OCP,” said Sarah.

“I will.”

After dropping off his passengers, Donald went to work at the city planning commission. He logged on to the commission’s online planning map. In addition to displaying current and proposed by-laws, the map provided an interactive, 3D model of the city, including 3D mock-ups of current and proposed buildings. The map was available to all citizens, who could use it to comment on and suggest modifications to proposals.

The Transit Commission had recently uploaded plans for a new subway line. Emergency Services was concerned that the design would make their response difficult in the case of an emergency. They were using the platform to work with the transit commission to solve the problem.

At the same time, citizens had been asked to help design the outside of the new subway stations. Donald’s job was to lead this group of volunteers, and make sure their design stayed within budget.

Before he left work for the day, Donald logged on to the central government’s voter platform and reviewed a list of “upcoming votes and issues that may concern you.” One of the big issues of the day was a bill to ban designer genes. It had actually been drafted by the janitor in Donald’s office. Donald gave his votes by proxy to the New World Party. But the party had not made a decision on this bill. Donald voted against the ban, as the voting system had predicted based on his past voting history. This system of tracking voting behavior had previously suggested Donald transfer his proxy vote from the popular Conservative party to the niche New World party, which he had found was much more in line with his views. Donald donated his monthly allowance for political financing to the party so that it could grow, and garner more influence.

When Donald got home from work, he saw his garbage still sitting on the curb. Donald had switched to a new, environmentally conscious garbage company, but it never picked up his garbage. He logged into his garbage collection account, run by the city government, and switched back to his old company. Now his weekly garbage pickup allowance would be given to a company that actually did their job.

It was getting late, and Donald had a date that night. After a quick shower and a change of clothes, Donald hopped back in the car.

“Would you like to pickup passengers?” the CPS prompted him. Donald declined.

“Probably not the best way to impress the ladies,” he said to himself.

He describes how the software as a service (SaaS) model and on-demand computing is not a gold mine for software vendors.

Anyone who thinks the software-as-a-service business is a gold mine for vendors is wrong. The economics are fundamentally different from those of the traditional software business – and not in a good way. As Lacy writes, the Web is “just as good at displacing revenue as it is in generating sources of it. Just ask the music industry or, ahem, print media. Think Robin Hood, taking riches from the elite and distributing them to everyone else, including the customers who get to keep more of their money and the upstarts that can more easily build competing alternatives.” Web apps remain a hard sell when it comes to big, conservative enterprises, and the capital and marketing costs are daunting, particularly if you’re running your own data centers. This revolution in business software will play out slowly and, for most suppliers, painfully.

Carr is right; the economics are fundamentally different from those of the traditional software business. However, they are different in a good way. Just like how utility companies changed the electric power game by drastically reducing costs, cloud computing and SaaS vendors will change the software and server game. Carr even made this same argument in his book, The Big Switch. “What the fiber-optic Internet does for computing is exactly what the alternating-current network did for electricity.”

The problem SaaS firms are having is that they are relying too much on the technology and the medium of distribution, and not on the service. Salesforce.com has been successful and the “poster boy” of SaaS because it provided a better CRM system than what was already available.

Steve Papermaster, the CEO of nGenera said at a recent SaaS panel discussion that SaaS vendors must provide new functionalities in order to succeed: “[SaaS] changes your billing cycle, but doesn’t change the game for the customer…If you’re not providing disruptive change in the positive sense for customers so they can run and lead their business very differently from before, then you’re not providing breakout value.” As soon as more vendors realize this, on-demand computing WILL become a gold mine for SaaS vendors. If the end product to the enterprise is ultimately more valuable, SaaS vendors don’t necessarily have to charge significantly less than the offerings of current vendors.

Most SaaS vendors are targeting small and medium sized businesses (SMBs) where the margins are much smaller. For SMB’s, SaaS makes more sense as they are unable to pay the high fees of traditional vendors. This current practice results in what Lacy described as Robin Hood taking money from the rich and distributing it to the poor. However, Papermaster continues, “the issue is not so much one of ‘is SaaS going to be acceptable to the enterprise,’ it’s rather how will it be possible for an enterprise not to run globally on demand?” Both large, traditional companies and SMBs alike will be forced to make the switch, as the level of service will be so much greater than what the traditional vendors are offering. For larger companies, vendors can include value-added service and consulting work on top of the basic platform to justify charging a higher subscription fee.

Current economic arguments aside, the companies soon to be staffed by the Net Generation won’t just appreciate always on SaaS applications, they’ll expect them. This hyper-connected, tech-savvy generation will not tolerate upgrade cycles, instead expecting the daily improvements and tweaks only SaaS vendors can provide.

Although both Carr and Lacy recognize that cloud computing and SaaS is the future, the future is a lot closer than they think.

Note: BusinessWeek has published special report on cloud computing.