Sunday, December 28, 2008

Q: How Does Web 2.0 Make Money? A: Government.

A lot of folks are wondering how Twitter will monetize.  Will they sell premium services to businesses that want to make Twitter part of a communications strategy?  What about Flickr, YouTube, and Facebook?  Are the ads working?  Regardless, if this is Web 2.0 then why are we still talking about subscriptions and eyeballs on pages?! 


I want to suggest another strategy:  Sell to government.  

I don't mean the general sense.  I  mean, specifically, Twitter, YouTube, and Facebook and a great many others should set up for-government operations.  I wrote to the Delicious team years ago asking when they were coming out with a solution that I could bring to government, i.e., in-house.  I never got an answer.  Regardless, figuring out how to get these companies oriented toward government is not straightforward.  Most Web 2.0 companies literally could not be further outside The Beltway.  I suspect they don't have much in the way of strategy for state, tribal, or local either.  Google does a good job selling into government with its enterprise appliance model, and with more than just search.  But, of course, Google is a massive company.

Culture has a lot to do with things.  The Pentagon is not a T-shirt and flip flops kind of environment.  "The Bigs," i.e., large-cap companies that provide most of the contracting labor, are not at all oriented to innovate in the Web 2.0 technology space.  You don't see Macs anywhere.  You do see MS Office everywhere.  I'm not entirely sure what conclusions can be drawn from these observations but I am sure the observations are significant.

I suppose the best example of Web 2.0 penetration into the government space is tele-presence.  Adobe Breeze is ubiquitous on Defense Knowledge Online (DKO).  Just about anyone with a DKO government account can create or attend a meeting.  But tele-presence probably isn't the first thing that comes to people's minds when asked to name a Web 2.0 technology and I'm not sure Adobe is the best example of a Web 2.0 company.

Yes, there is something different about Twitter, Flickr, YouTube, Facebook, Delicious, et al.  I happen to think that something different - whatever it is - translates into unrealized opportunity for both buyers and sellers in the government space.  I choose to focus on these technologies specifically and there are others that I include.  ProgrammableWeb has a solution for the registry problem, for example.  I don't represent any of these companies, by the way.  I call them out as (mostly) well-known examples of capabilities the government needs.  I don't really care if Flickr, Picasa, or PhotoBucket is the image repository of choice.  Vimeo and YouTube can and should compete for the video infrastructure.  

The point is that government needs platform solutions.

Simple, content-based, platform solutions are the most obvious plays for Web 2.0 in government; images, video, audio.  The federal government processes a staggering amount of this stuff.  The DoD may be the first to get into the mix with TroopTube

There also are plenty of outfits that would use social tagging tools if only they could bring them in house.  By bring them in house, what I mean and recommend is providing enterprise services solutions.  It's nice to have applications that provide tagging, but applications are seldom the best enterprise solutions and are hardly social (except, perhaps, in MOSS).  Tagging is a domain, a Web 2.0 partition, if you will, unto itself.  It is a simple-enough-but-not-too-simple utility that scales and it can be integrated with just about any other application, regardless of whether or not the application was designed with tagging in mind.  Yes, government needs strategic guidance and support for tagging services and Web 2.0 tagging companies are just the ones to provide it...if we can figure out how.

The current providers, a.k.a. "The Bigs" are not oriented to provide Web 2.0 tech support.  

This is either an opportunity to get new business before The Bigs or to create a business of showing them the way.  In any case it is an opportunity to make money.  More specifically, it is a way for Web 2.0 technologies to make money.  In the government services space the biz-speak is generally referred to as "priming" and "subbing," as in:  you are either a prime contractor or a subcontractor.  I don't see many Web 2.0 companies subcontracting to big, traditional system integrators, though.

The government is not set up to acquire Web 2.0 technologies.  

While services contracts are fairly common and understood, things are less well-defined in the products and solutions space unless the products and solutions are ubiquitous or otherwise extremely well known.  Government, especially federal, wants to buy everything in bulk.  See also:  Indefinite Delivery, Indefinite Quantity (IDIQ).  New technology is extraordinarily difficult to insert, especially in secure environments.  Protocol, procedure, and process rule the land.  Force-fitting into an existing model is too often the preferred method.

We are getting better at defining and avoiding undue process but process, by definition, is:  1)  necessary and 2)  inherently situational.

When doing business with the federal government, it's important to know how business is done inside The Beltway.  There are most probably things in the mix that need to be undone, too.  To a meaningful extent the situation is not different at state, tribal, and local levels.  Education is needed on both sides of the buyer/seller relationship.  We might "change the world" in the process of implementing Web 2.0 for government, but requisite is the obligation to have a fair understanding of "the world" first.  The obligation goes both ways but mostly falls on the shoulders of sellers.

Choices for Web 2.0 companies to make money by doing business with government:
  1. Become or spin-off an enterprise systems integrations unit
  2. Sell enterprise systems solutions a) to government b) to system integrators (Note:  probably can't sell solutions to government without either being an integrator or having the support of one.)
  3. Consult a) to government b) to system integrators on enterprise systems
Of course, "partner" is an option, but still implies one or more the previously listed options.

[Update 9:47 PM - I've decided I really don't like these choices at all.  Need to come up with an altogether new business model, perhaps...probably]

There's so much more to this than I can wrap my head around now, certainly more than I am prepared or qualified to comment here.

[Update 9:47 PM - Forgot to comment on need for and evidence of government investment in backbone instracture and understanding of cloud architecture; significant issues arise once a bunch of these services are running around on a single network.  And as always, security is different and harder.]

I think it's time Web 2.0 companies, government, and large-cap contracting companies had a grand introduction to one another.  Believe it or not, there are plenty of people who have never even heard of Web 2.0.

6 comments:

JS said...

I've been pondering some similar thoughts with regards to the governments approach to modern system architectures (more specifically web 2.0).... But then I always his this speedbump in my thoughts:

Much of the ideas of web 2.0 involves the communication and sharing of data (data being using loosely) across multiple systems... But the government has no over-arching authoritative figure for IT decisions, and without that, there will never be the governance needed to impliment said solutions across government organizations. I think that before a new wave comes across the "whole" of the government, some sort of meeting of the minds needs to occur...

I wonder if this has even came to anyone's attention (more specifically, the big guys of the many organizations/sectors of the government)...

...Just another thought to ponder.

Kevin Curry said...

JS,

I think your comments speak directly to the debate over national CTO. I am not opposed to the idea of leadership from the Executive Office, however I am certain that a central authority is not requisite to the solution. There have been several IT paradigm shifts since the dawn of computers and none required central authority. There are many practical things we can do to move forward on Web 2.0 in government and for sure many things are being done through greater awareness and education among players already in the game.

Thanks for your comments.

Best,
Kevin

bodyboarder20 said...

"Web 2.0 in government and for sure many things are being done through greater awareness and education among players already in the game."

What sorts of things? I'd like to get involved, if such a niche exists where Im able to get involved.

Luis Guajardo said...

its clear that the government is behind on tech advancement...but unfortunately i think there's bigger issues at hand that will prevent any real progress on this issue...you know...things like the ECONOMY!

Luis Guajard
www.therawdealblog.com

Kevin Curry said...

@bodyboarder20,

In no particular order:

Check out these two

un-conferences
I bookmared, both happening in D.C. There will be more like these, too.

Army CIO-G6 LtG Sorenson just announced Army Innovation Lab:

http://innovation.cio-g6.com, where anyone can submit an idea.

Locally there are developer groups that we can engage: HRNUG and SEVA JUG.

I encourage you to get a DKO account, if you don't have one, and update

your profile there. That is a great way to advertise your expertise and make it visible to folks who may be looking for it.

Go to FedBizOpps: https://www.fbo.gov and search on "web services"

Follow these people and groups on Twitter:
@bobgourley
@carlmalamud
@corbett3000
@cheeky_geeky
@dhinchcliffe
@DavidStephenson
@FEMAInFocus
@Kevin_Jackson
@krazykriz
@levyj413
@lewisshepherd
@LindyKyzer
@meznor
@sradick
@timoreilly
@USArmy
@ZachTumin

Actually, this is my favorite: Find something in the public domain and

fix it. I've been banging the drum recently about government taxonomies that are used by everyone and useful to no one. The reason is that they are only published as documents and through browsers. If, instead, we used web services to publish these taxonomies, their usefulness across multiple applications and domains will increase dramatically.

Kevin Curry said...

Luis,

You are definitely right that the economy is putting some serious downward pressure on spending. But this is precisely the right time and place for Web 2.0 initiatives. There is a staggering amount of waste due to the burdens of information technology and I see Web 2.0 techniques as a way to alleviate some of those burdens. Check out "Government Data and the Invisible Hand" by Robinson, et al., as a reference. Basically it says that government should stop spending resources on building web portals and applications and instead just focus on opening up data through ubiquitous standards. In other words, spend wisely "Here" not foolishly "There." There are certainly low cost things that can be done. I created @StormPrediction on Twitter for zero cost by sending NOAA RSS data through twitterfeed. Of course, no one made any money from that. But fact is that there are groups spending resources (time, money) on Web 2.0 techniques for KM; wikis, blogs, social bookmarking and they tend to do so with little guidance from or interaction with WikiMedia, WordPress, or Delicious (for examples). There is a niche to be filled in doing more with less and someone is going to make money from it. Finally, it may be the case that in this lousy economy the only place spending money is government.