Enterprise 2.0 and the economics of abundance

By July 28, 2009Enterprise2.0

I haven’t written much about Enterprise 2.0 recently, perhaps because the slow rate of adoption has stemmed the flow of interesting startups in this area, but I remain convinced that it’s time will come.  That conviction was strengthened this morning when reading the chapter on the economics of abundance in Anderson’s Free.

Early in the chapter he describes how he and his colleagues used to receive regular emails from their IT department asking them to delete unnecessary files from shared drives, and how that changed with the realisation that storage is now cheap and abundant and it therefore no longer makes sense to ask people to spend their (scarce) time deleting files.  Critically, this realisation took a long time to dawn on them because the IT department was in the happy world of managing measurable storage costs and stepping outside that to thinking about people’s time was a move into the unknown.

So it is with enterprise 2.0.  Historically the scarce resource has been server space and the resources of the IT team who had to deploy and support enterprise apps.  In the world of enterprise 2.0 both those scarcities disappear.  The apps are hosted outside the enterprise, the employee takes care of deployment (in her browser) and support is handled directly by the app provider.

A significant part of the raison d’etre for IT departments is therefore under threat and it is little surprise that they resist the trend towards enterprise 2.0.

The chart below is copied from Anderson’s book and describes five changes in the optimal organisational model brought about by the shift from scarce to abundant computing.  Four of five apply directly to enterprise IT, and all are an anathema to most CIOs.

  Scarcity Abundance
Rules "Everything is forbidden unless it is permitted" "Everything is permitted unless it is forbidden"
Social model Peternalism ("we know what’s best") Egalitarianism ("you know what’s best")
Profit plan Business model We’ll figure it out
Decision process Top-down Bottom-up
Management style Command and control Out of control

Any cultural change is slow happen, and on this scale particularly so, which explains the slow roll-out of enterprise 2.0.  This also suggests that maybe the way forward in the short term is to target companies too small to have strong IT departments – a strategy employed by Basecamp, one of the most successful companies in this space.

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