what’s dying? It’s Not The News; It’s The Paper!
I attended the inaugural Ignite NYC today at M1-5 in the Chinatown area. A crowd of about 350 people turned out and the din was quite formidable at times. But it was a fantastic lineup of speakers and I learned a number of things from the talks.
The last talk in the program was The Future of News by Nick Bilton, who works for the New York Times technology R&D group. Conventional wisdom holds that as more and more advertising moves online, newspapers are a dying business. The carnage happening in the publishing industry seems to bear out this notion. After a brief overview of the history of news, Nick challenged the audience to think beyond this truism. He said that it’s not the news that is dying, it’s just the paper–the medium for its delivery–that is dying.
Newspapers have fallen into a malaise about their financial health and spend reams of one of their most expensive resources, newsprint, writing about exactly this. The problem is: readers really don’t care to read about this and want instead to learn about substantive news that’s going to affect their lives and their communities. Several Internet services–Digg, Google News, NowPublic and outside.in to name a few–have taken a stab at redefining how relevant news is selected and delivered to people. I am hardly one in favor of throwing this important, professionally mandated, socio-political watchdog function entirely to the wisdom of the crowds, but these services are proofs of the concept that news reporting needs to closely examine and adopt some of the value that these services provide.
Some news organizations, such as News Corp are exploring this space aggressively. Others, like the New York Times, are merely coming to terms with the economics of digital media consumption, such as by opening up the paywall that used to surround most of its content. News organizations need to snap out of their malaise, reprogram their corporate DNA, stop attributing their ill-health solely to the shift in advertising and figure out the precise value they are providing to their customers. News isn’t going away anytime soon, and customers will pay for high-quality content that provides them with true value.
What can disrupt Google?
Google, in addition to making well-regarded products, is hailed as the company that could stand to dominate the technology landscape for a while to come. The company has accumulated a remarkable base of talent (even if some of the bloom has come off that rose) and has built up a formidable infrastructure, both of which enable it to play neatly to an emerging always-online lifestyle. Even as the company goes from strength to strength in its domination of online properties, the golden question everyone loves to ponder is how Google, the golden child of an Internet Age that doesn’t seem to going away anytime soon, might itself get disrupted.
Unlike technology changes like commodity hardware and the Internet, which disrupted IBM and Microsoft respectively, the biggest potential disruptor to Google is in fact Google itself. Google puts a high premium on its ability to maintain the atmosphere of a small, innovative startup, where innovative ideas are heard and translated within a reasonable timeframe into products. Engineers at Google are encouraged to exercise their creativity and passion without much intervention from a traditional corporate hierarchy. The flip side of this heavily peer approval-driven approach is that engineers must build extensive personal networks of influence to increase the chances that their product or feature sees the light of day. As the company continues on a trajectory of hypergrowth though, the laws of organizational physics will pose a challenge to this goal by making this web of relationships progressively harder to keep up. And Google certainly wouldn’t want its own cultural best practices to lead inadvertently to its demise. Until now, most companies that experience this transformation deal with it by creating processes that impose order on chaos, which inadvertently saps the serendipity and hallway conversations that were the life-blood of the company in the first place.
Back when Microsoft was viewed as the innovative young kid on the block, the organizational behavior literature produced several surveys of how Microsoft’s corporate culture enabled its success. MIT Sloan professor Michael Cusumano’s How Microsoft Makes Large Teams Work Like Small Teams is but one example. Now that the legal and technological abilities to form atomized enterprises are emerging, one way for Google to deal with its looming disruption is to look at how to make large enterprises work like small enterprises.
Software development organizations have long realized the value of small, driven teams, but that wisdom doesn’t necessarily translate over to the organizational side of most enterprises, who continue to stick with well-understood models of resource allocation for Traditional Enterprises. Of all the major technology-driven companies in business today, it is Google that can come up with a way of creating a functioning network of independent internal entities that collaborate effectively to advance stakeholder interests. These entities (which, as a practical matter, could be structured as JVs), would not just be maintaining a startup atmosphere–they would in fact be startups! The idea of ‘intrapreneurship’ isn’t new or foreign to Google, but pushing the envelope on that concept and changing the rules of the game are what holds the keys to keeping Google’s innovation engine firing on all cylinders.
the enterprisization of consumer IT
Much digital ink has been expended on the trend of consumerization of enterprise IT–the trend of consumer-facing technology being used in enterprises because of there being high-quality applications. Less has been written about a closely related trend: the enterprisization of consumer IT. Contrived as its name may seem, I think the trend of consumer-facing technologies acquiring characteristics traditionally ascribed to enterprise software is very real. First let’s explore a few ways in which consumer technology is getting enterprisized:
- Scale. Even the world’s biggest employer, Wal-Mart, has only 2.1m employees, whereas the U.S., which doesn’t even have the biggest broadband user base in the world, boasts over 40m broadband Internet users. The global spread of broadband has given rise to a class of applications that must deal with scaling problems hitherto unseen by any enterprise-class software. Accordingly, any consumer-facing technology that has managed to attract and adapt to a sizeable user base will find little trouble applying the lessons of Web-scale computing to the needs of most enterprises.
- Availability and reliability. Not all in the most recent generation of Internet applications may have viable business models, but the resulting changes in user behavior are significant. Be it teenagers using Facebook as Outlook to Indians spending $2bn on online airfare purchases, the Internet is increasingly used as a transactional substrate rather than just a means of transactional support. The increasingly transactional behavior of Internet users on Web services and social networks is giving so-called consumer technology a bunch of enterprise-appropriate features using commodity hardware and software redundancy.
- Interoperability and standards-based distributed computing. A consumer Web site may not be designed from the start with a predetermined list of point integrations with other consumer Web sites. The prevalence of platform-neutral Internet standards enables opportunistic instances of integration to emerge serendipitously. Broadly applicable standards for data, architecture and identity enable the creation of pipelined systems that can dwarf much traditional enterprise software in terms of complexity, utility and elegance. These very principles can be applied within enterprises to create modular, interoperable systems that can be reconfigured flexibly rather than complex monoliths designed from the start against a fixed specification.
In the long run, the consumerization of enterprise IT will just be part of a larger renovation of enterprise IT and will one day disappear into the ether as a trend. The enterprisization of consumer IT, however, has major implications for business models and investment. Time was when the quality of supporting technology and availability of resources to create it was a significant gating factor that determined the choice of business model and market to pursue. Now, however, conditions are in place for a venture to realistically choose between pursuing the enterprise market and the consumer market. It is not that the distinction is becoming false or irrelevant, because the resource allocation methods required for either market are (still) too widely divergent for a venture to pull off pursuing both. But for a software venture, realizing that it is finally beginning to have a realistic choice between pursuing the enterprise market and the consumer market is immensely empowering.
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