Keeping the Web 2.0 Bubble Inflated

Opinion: Web 2.0 faces trouble on the consumer end, but the B2B side is still OK.

Is Web 2.0 a bubble about to burst? And was there ever a Web 2.0 in the first place? These are the questions that are taking up an awful lot of keystrokes in the blogosphere (a term that I wholeheartedly wish would disappear) and which hold some import for the business-to-business marketplace. I think that, on the consumer side, the bubble will, indeed, burst. However, I think the B2B side will do just fine this time around.

Om Malik has been one of the more vocal bloggers ringing the alarm bell that Web 2.0 is about to burst. The very ingredients of 2.0 companies—pure Web platforms geared to social interactions—will prove their undoing, goes the argument. Social Web gatherings, whether based on blogs, personality descriptions, podcasts or videocasts, have some inherent hurdles between being a cool place to hang out and a business that can generate revenues.

Here are a few of the challenges facing Web 2.0: Big sites require big, expensive infrastructures for support; big social sites attract not only cool people but every seedy character with a Web connection; and cool sites that try to morph into a business must get over financial, legal and management hurdles that are sure to trip up those that dont remember and havent learned from bubble No. 1.

The difference between the current B2B Web plans and those on the consumer side couldnt be greater. The business 2.0 world is tying in the digital world to the real world. There was a flurry of interest recently when Hewlett-Packard labs introduced its Memory Spot chip. That chip, about the size of a tomato seed, has a 10MB-per-second transfer rate and can store about 4MB of data. It is a long road from a lab experiment to a product, but whether it be a Memory Spot chip, RFID (radio-frequency identification) chip, an enhanced bar code or a Dust Networks wireless sensor, real-world information is becoming part of the information technology infrastructure. The benefits of knowing how your company uses electricity, heating, cooling and having part information travel along the manufacturing cycle with the actual part is apparent. Understanding a business benefit and then building products that can access and leverage that benefit is a real market that the coolest consumer social network could only wish to emulate.

A second positive aspect of the business 2.0 world are the benefits of virtualization. While the promise of virtual worlds in the game industry are still not being met, the nitty-gritty virtual business world is delivering on its promise now: operating systems that can run over many processors; virtual storage networks made up of many physical devices; and virtual hosted applications where users can subscribe individually or on the company level and can have updates and new capabilities seamlessly delivered. These are changing the nature of business computing. Companies such as, VMware and NetSuite have led the way in proving that virtual applications are faster, more accessible and more robust than applications that must be installed, updated and maintained within the corporation.

A third segment of the business 2.0 world mimics the consumer side in social applications. Why not get a bunch of CEOs or CIOs or any other CXOs to meet on the Web and share their experiences? But CEOs really arent all that computer savvy as a rule, and the other CXOs have to think about corporate disclosure rules and company privacy policies before they can all start hanging around the virtual water cooler. To get big, social applications need lots of users, but that very growth leads to legal, political and management restrictions. Maybe those restrictions can be overcome, but, right now, Id bet that the real and virtual worlds of the business 2.0 Web will be what keeps the business bubble from bursting.

Editorial Director Eric Lundquist can be reached at


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