Let Me Charge You Per User.

Yesterday I saw the following tweet from LinkedIn:
“RT @benparr: Linkedin Surpasses 100 Million Users [INFOGRAPHIC] – http://on.mash.to/eIVmAw”

This led to me thinking on how the business model in Information Technology (IT) has shifted to defining business value from the perspective of a user. Let me explain.

Back in the day, vendors made money by charging customers on the number of CPU’s or the number of transactions their software supported without degrading the quality of the software service. There were several companies including Microsoft, Oracle, SAP, SAS and others which followed this model.

When did the transformation begin? I believe it began when Google came along and started buying companies like DoubleClick and other online advertising companies. This opened up the world to a regular Joe or in this case a regular Enoch to generate revenue via online pay-per-click ads (PPC). At that time Google, Yahoo and other businesses recognized that individuals like you and me have a specific business value and the individual can increase his business value by how pro-active they are in using these online technologies. Then came Facebook with Microsoft’s help (Mr. Zuckerberg, you are one lucky dude!) started to leverage the business value from its users. Facebook and others recognized that money could be made via targeted ads and analyzing user behavior. They inturn showed their business partners that there is a better return on investment (ROI) on the marketing dollars by using logical platforms created by companies like Facebook and Twitter.

Recently I heard on NPR (this may be out of style after congress is done slashing funding for this service) that investment companies are investing in companies like Facebook, Groupon, LinkedIn, Twitter, etc., etc because they are generating money and everyone is excited about. These companies see their users as assets of a company. Switching gears a bit, Google is offering their cloud services to different companies and they are charging businesses a flat fee for the service which is based fee per user per year rather than fee per CPU or transaction. This model is cleaner since it identifies per business associate and it doesn’t require a techie geek like me to figure it out. Therefore “Go Fish”…I mean go figure, the business world always understood that its users are its life blood and now IT is aligning itself to it.

Assessing IT Trends via Google Trends

After spending more than eleven years in the Information Technology, it is amazing to see how technologies evolve and trends are created and destroyed. I did a workshop on Thursday March 17,2011 with my colleague, Mr. Giora Hadar, on social media at FAA's IT\ISS conference where I discussed the evolution of social media and how FAA is using it. While preparing for the presentation, I realized how US government information policy is influenced by technology trends. Anyway here are some trends as viewed on Google Trends:

• Query: "cloud computing"
  
• Definition: "Cloud computing refers to the provision of computational resources on demand via a network." - Wikipedia
• Google Trends:

  

• Query: "Service oriented architecture"
• Definition: "Service-oriented architecture (SOA) is a flexible set of design principles used during the phases of systems development and integration in computing." - Wikipedia
• Google Trends:

  

• Query: "social media"
• Definition: "Social media are media for social interaction, using highly accessible and scalable communication techniques. Social media is the use of web-based and mobile technologies to turn communication into interactive dialogue." - Wikipedia
• Google Trends:

  

• Query: "bpms"
• Definition: "Some define the BPM System or Suite (BPMS) as "the whole of BPM." Others will relate the important concept of information moving between enterprise software packages and immediately think of Service Oriented Architecture (SOA)." - Wikipedia
• Google Trends:
  

  

• Query: "knowledge management"
• Definition: "Knowledge Management (KM) comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences." - Wikipedia
• Google Trends:

  

• Query: "enterprise architecture"
• Definition: "An enterprise architecture (EA) is a rigorous description of the structure of an enterprise, which comprises enterprise components (business entities), the externally visible properties of those components, and the relationships (e.g. the behavior) between them. EA describes the terminology, the composition of enterprise components, and their relationships with the external environment, and the guiding principles for the requirement (analysis), design, and evolution of an enterprise.^[1][2][3]" - Wikipedia
  
• Google Trends:

  
  

As you can see, "cloud computing" and "social media" are the hottest IT trends while "service oriented architecture","knowledge management" and "enterprise architecture", are declining. BPMS is also on the rise. What this tells me that CIO will try to align their strategies to the latest trends. These trends correlate to the Gartner Hype Cycle. I wonder if folks are doing any analytical strategic work using a tool like Google Trends.

Bad Mix: Traditional businesses and Social media

I recently did a road map of social media initiatives within the department and agency I work for. I tracked all of the Office of Management and Budget (OMB) policies from the 1970 (Hello President Carter!) to the present time and them mapped them to specific Department of Transportation (DOT) and the Federal Aviation Administration (FAA) policies and initiatives. I also captured when various Social media businesses like Facebook, Twitter, MySpace, and Blogger were formed or purchased by Google. It was a fascinating exercise.

The evolution of businesses, which are based on the concepts of social networking, and organic growth, has truly been disruptive in the business world. The tools provided by these companies are making the Jasmine flower proud (my poor attempt in weaving the political revolutions in the middle east into this blog entry). Unfortunately I don't think social media tools are going to successful in the big business world because businesses are based on the principles of organized management. There is a reason why fortune 500 companies hire executives with a Masters of Business ADMINISTRATION and not Masters of Science in Business. Structure and management go together.

If you think about it. Labor unions and other user related groups with a common goal (that are not dependent on a process) will adopt social media successfully within their organization. Meanwhile investment banks and large supply chain companies will have limited success because they are based on processes. IT is critical in a business they automate business process and automation of business processes can be managed. Social media shouldn't be managed but it should be organic. A successful CIO may be able to successful implement social media in niche pockets but he or she cannot make it an enterprise level shared services. Folks in the Department of Defense claim that social media is successful in their organization. When you do intelligence analysis which is based on information sharing from different perspectives then there has be collaboration. Social media in the intelligence domain is successful because it is based on information collaboration. This is uniquely different from a typical fortune 500 company.

Anyway I had this thought this morning and now I need to go to work and the agency's social media initiatives.