What Is Web 2.0

part 1 | part 2 | part 3 | part 4

Author: Tim O'Reilly. Posted on October 18th, 2005

4. End of the Software Release Cycle

As noted above in the discussion of Google vs. Netscape, one of the defining characteristics of internet era software is that it is delivered as a service, not as a product. This fact leads to a number of fundamental changes in the business model of such a company:

1. Operations must become a core competency. Google's or Yahoo!'s expertise in product development must be matched by an expertise in daily operations. So fundamental is the shift from software as artifact to software as service that the software will cease to perform unless it is maintained on a daily basis. Google must continuously crawl the web and update its indices, continuously filter out link spam and other attempts to influence its results, continuously and dynamically respond to hundreds of millions of asynchronous user queries, simultaneously matching them with context-appropriate advertisements.

   It's no accident that Google's system administration, networking, and load balancing techniques are perhaps even more closely guarded secrets than their search algorithms. Google's success at automating these processes is a key part of their cost advantage over competitors.

   It's also no accident that scripting languages such as Perl, Python, PHP, and now Ruby, play such a large role at web 2.0 companies. Perl was famously described by Hassan Schroeder, Sun's first webmaster, as "the duct tape of the internet." Dynamic languages (often called scripting languages and looked down on by the software engineers of the era of software artifacts) are the tool of choice for system and network administrators, as well as application developers building dynamic systems that require constant change.

2. Users must be treated as co-developers, in a reflection of open source development practices (even if the software in question is unlikely to be released under an open source license.) The open source dictum, "release early and release often" in fact has morphed into an even more radical position, "the perpetual beta," in which the product is developed in the open, with new features slipstreamed in on a monthly, weekly, or even daily basis. It's no accident that services such as Gmail, Google Maps, Flickr, del.icio.us, and the like may be expected to bear a "Beta" logo for years at a time.

   Real time monitoring of user behavior to see just which new features are used, and how they are used, thus becomes another required core competency. A web developer at a major online service remarked: "We put up two or three new features on some part of the site every day, and if users don't adopt them, we take them down. If they like them, we roll them out to the entire site."

   Cal Henderson, the lead developer of Flickr, recently revealed that they deploy new builds up to every half hour. This is clearly a radically different development model! While not all web applications are developed in as extreme a style as Flickr, almost all web applications have a development cycle that is radically unlike anything from the PC or client-server era. It is for this reason that a recent ZDnet editorial concluded that Microsoft won't be able to beat Google: "Microsoft's business model depends on everyone upgrading their computing environment every two to three years. Google's depends on everyone exploring what's new in their computing environment every day."

While Microsoft has demonstrated enormous ability to learn from and ultimately best its competition, there's no question that this time, the competition will require Microsoft (and by extension, every other existing software company) to become a deeply different kind of company. Native Web 2.0 companies enjoy a natural advantage, as they don't have old patterns (and corresponding business models and revenue sources) to shed.

A Web 2.0 Investment Thesis Venture capitalist Paul Kedrosky writes: "The key is to find the actionable investments where you disagree with the consensus". It's interesting to see how each Web 2.0 facet involves disagreeing with the consensus: everyone was emphasizing keeping data private, Flickr/Napster/et al. make it public. It's not just disagreeing to be disagreeable (pet food! online!), it's disagreeing where you can build something out of the differences. Flickr builds communities, Napster built breadth of collection. Another way to look at it is that the successful companies all give up something expensive but considered critical to get something valuable for free that was once expensive. For example, Wikipedia gives up central editorial control in return for speed and breadth. Napster gave up on the idea of "the catalog" (all the songs the vendor was selling) and got breadth. Amazon gave up on the idea of having a physical storefront but got to serve the entire world. Google gave up on the big customers (initially) and got the 80% whose needs weren't being met. There's something very aikido (using your opponent's force against them) in saying "you know, you're right--absolutely anyone in the whole world CAN update this article. And guess what, that's bad news for you." --Nat Torkington

5. Lightweight Programming Models

Once the idea of web services became au courant, large companies jumped into the fray with a complex web services stack designed to create highly reliable programming environments for distributed applications.

But much as the web succeeded precisely because it overthrew much of hypertext theory, substituting a simple pragmatism for ideal design, RSS has become perhaps the single most widely deployed web service because of its simplicity, while the complex corporate web services stacks have yet to achieve wide deployment.

Similarly, Amazon.com's web services are provided in two forms: one adhering to the formalisms of the SOAP (Simple Object Access Protocol) web services stack, the other simply providing XML data over HTTP, in a lightweight approach sometimes referred to as REST (Representational State Transfer). While high value B2B connections (like those between Amazon and retail partners like ToysRUs) use the SOAP stack, Amazon reports that 95% of the usage is of the lightweight REST service.

This same quest for simplicity can be seen in other "organic" web services. Google's recent release of Google Maps is a case in point. Google Maps' simple AJAX (JavaScript and XML) interface was quickly decrypted by hackers, who then proceeded to remix the data into new services.

Mapping-related web services had been available for some time from GIS vendors such as ESRI as well as from MapQuest and Microsoft MapPoint. But Google Maps set the world on fire because of its simplicity. While experimenting with any of the formal vendor-supported web services required a formal contract between the parties, the way Google Maps was implemented left the data for the taking, and hackers soon found ways to creatively re-use that data.

There are several significant lessons here:

1. Support lightweight programming models that allow for loosely coupled systems. The complexity of the corporate-sponsored web services stack is designed to enable tight coupling. While this is necessary in many cases, many of the most interesting applications can indeed remain loosely coupled, and even fragile. The Web 2.0 mindset is very different from the traditional IT mindset!
2. Think syndication, not coordination. Simple web services, like RSS and REST-based web services, are about syndicating data outwards, not controlling what happens when it gets to the other end of the connection. This idea is fundamental to the internet itself, a reflection of what is known as the end-to-end principle.
3. Design for "hackability" and remixability. Systems like the original web, RSS, and AJAX all have this in common: the barriers to re-use are extremely low. Much of the useful software is actually open source, but even when it isn't, there is little in the way of intellectual property protection. The web browser's "View Source" option made it possible for any user to copy any other user's web page; RSS was designed to empower the user to view the content he or she wants, when it's wanted, not at the behest of the information provider; the most successful web services are those that have been easiest to take in new directions unimagined by their creators. The phrase "some rights reserved," which was popularized by the Creative Commons to contrast with the more typical "all rights reserved," is a useful guidepost.

Innovation in Assembly

Lightweight business models are a natural concomitant of lightweight programming and lightweight connections. The Web 2.0 mindset is good at re-use. A new service like housingmaps.com was built simply by snapping together two existing services. Housingmaps.com doesn't have a business model (yet)--but for many small-scale services, Google AdSense (or perhaps Amazon associates fees, or both) provides the snap-in equivalent of a revenue model.

These examples provide an insight into another key web 2.0 principle, which we call "innovation in assembly." When commodity components are abundant, you can create value simply by assembling them in novel or effective ways. Much as the PC revolution provided many opportunities for innovation in assembly of commodity hardware, with companies like Dell making a science out of such assembly, thereby defeating companies whose business model required innovation in product development, we believe that Web 2.0 will provide opportunities for companies to beat the competition by getting better at harnessing and integrating services provided by others.

6. Software Above the Level of a Single Device

One other feature of Web 2.0 that deserves mention is the fact that it's no longer limited to the PC platform. In his parting advice to Microsoft, long time Microsoft developer Dave Stutz pointed out that "Useful software written above the level of the single device will command high margins for a long time to come."

Of course, any web application can be seen as software above the level of a single device. After all, even the simplest web application involves at least two computers: the one hosting the web server and the one hosting the browser. And as we've discussed, the development of the web as platform extends this idea to synthetic applications composed of services provided by multiple computers.

But as with many areas of Web 2.0, where the "2.0-ness" is not something new, but rather a fuller realization of the true potential of the web platform, this phrase gives us a key insight into how to design applications and services for the new platform.

To date, iTunes is the best exemplar of this principle. This application seamlessly reaches from the handheld device to a massive web back-end, with the PC acting as a local cache and control station. There have been many previous attempts to bring web content to portable devices, but the iPod/iTunes combination is one of the first such applications designed from the ground up to span multiple devices. TiVo is another good example.

iTunes and TiVo also demonstrate many of the other core principles of Web 2.0. They are not web applications per se, but they leverage the power of the web platform, making it a seamless, almost invisible part of their infrastructure. Data management is most clearly the heart of their offering. They are services, not packaged applications (although in the case of iTunes, it can be used as a packaged application, managing only the user's local data.) What's more, both TiVo and iTunes show some budding use of collective intelligence, although in each case, their experiments are at war with the IP lobby's. There's only a limited architecture of participation in iTunes, though the recent addition of podcasting changes that equation substantially.

This is one of the areas of Web 2.0 where we expect to see some of the greatest change, as more and more devices are connected to the new platform. What applications become possible when our phones and our cars are not consuming data but reporting it? Real time traffic monitoring, flash mobs, and citizen journalism are only a few of the early warning signs of the capabilities of the new platform.

7. Rich User Experiences

As early as Pei Wei's Viola browser in 1992, the web was being used to deliver "applets" and other kinds of active content within the web browser. Java's introduction in 1995 was framed around the delivery of such applets. JavaScript and then DHTML were introduced as lightweight ways to provide client side programmability and richer user experiences. Several years ago, Macromedia coined the term "Rich Internet Applications" (which has also been picked up by open source Flash competitor Laszlo Systems) to highlight the capabilities of Flash to deliver not just multimedia content but also GUI-style application experiences.

However, the potential of the web to deliver full scale applications didn't hit the mainstream till Google introduced Gmail, quickly followed by Google Maps, web based applications with rich user interfaces and PC-equivalent interactivity. The collection of technologies used by Google was christened AJAX, in a seminal essay by Jesse James Garrett of web design firm Adaptive Path. He wrote:

"Ajax isn't a technology. It's really several technologies, each flourishing in its own right, coming together in powerful new ways. Ajax incorporates:

• standards-based presentation using XHTML and CSS;
• dynamic display and interaction using the Document Object Model;
• data interchange and manipulation using XML and XSLT;
• asynchronous data retrieval using XMLhttpRequest;
• and JavaScript binding everything together."

Web 2.0 Design Patterns In his book, A Pattern Language, Christopher Alexander prescribes a format for the concise description of the solution to architectural problems. He writes: "Each pattern describes a problem that occurs over and over again in our environment, and then describes the core of the solution to that problem, in such a way that you can use this solution a million times over, without ever doing it the same way twice." The Long Tail Small sites make up the bulk of the internet's content; narrow niches make up the bulk of internet's the possible applications. Therefore: Leverage customer-self service and algorithmic data management to reach out to the entire web, to the edges and not just the center, to the long tail and not just the head. Data is the Next Intel Inside Applications are increasingly data-driven. Therefore: For competitive advantage, seek to own a unique, hard-to-recreate source of data. Users Add Value The key to competitive advantage in internet applications is the extent to which users add their own data to that which you provide. Therefore: Don't restrict your "architecture of participation" to software development. Involve your users both implicitly and explicitly in adding value to your application. Network Effects by Default Only a small percentage of users will go to the trouble of adding value to your application. Therefore: Set inclusive defaults for aggregating user data as a side-effect of their use of the application. Some Rights Reserved. Intellectual property protection limits re-use and prevents experimentation. Therefore: When benefits come from collective adoption, not private restriction, make sure that barriers to adoption are low. Follow existing standards, and use licenses with as few restrictions as possible. Design for "hackability" and "remixability." The Perpetual Beta When devices and programs are connected to the internet, applications are no longer software artifacts, they are ongoing services. Therefore: Don't package up new features into monolithic releases, but instead add them on a regular basis as part of the normal user experience. Engage your users as real-time testers, and instrument the service so that you know how people use the new features. Cooperate, Don't Control Web 2.0 applications are built of a network of cooperating data services. Therefore: Offer web services interfaces and content syndication, and re-use the data services of others. Support lightweight programming models that allow for loosely-coupled systems. Software Above the Level of a Single Device The PC is no longer the only access device for internet applications, and applications that are limited to a single device are less valuable than those that are connected. Therefore: Design your application from the get-go to integrate services across handheld devices, PCs, and internet servers.

AJAX is also a key component of Web 2.0 applications such as Flickr, now part of Yahoo!, 37signals' applications basecamp and backpack, as well as other Google applications such as Gmail and Orkut. We're entering an unprecedented period of user interface innovation, as web developers are finally able to build web applications as rich as local PC-based applications.

Interestingly, many of the capabilities now being explored have been around for many years. In the late '90s, both Microsoft and Netscape had a vision of the kind of capabilities that are now finally being realized, but their battle over the standards to be used made cross-browser applications difficult. It was only when Microsoft definitively won the browser wars, and there was a single de-facto browser standard to write to, that this kind of application became possible. And while Firefox has reintroduced competition to the browser market, at least so far we haven't seen the destructive competition over web standards that held back progress in the '90s.

We expect to see many new web applications over the next few years, both truly novel applications, and rich web reimplementations of PC applications. Every platform change to date has also created opportunities for a leadership change in the dominant applications of the previous platform.

Gmail has already provided some interesting innovations in email, combining the strengths of the web (accessible from anywhere, deep database competencies, searchability) with user interfaces that approach PC interfaces in usability. Meanwhile, other mail clients on the PC platform are nibbling away at the problem from the other end, adding IM and presence capabilities. How far are we from an integrated communications client combining the best of email, IM, and the cell phone, using VoIP to add voice capabilities to the rich capabilities of web applications? The race is on.

It's easy to see how Web 2.0 will also remake the address book. A Web 2.0-style address book would treat the local address book on the PC or phone merely as a cache of the contacts you've explicitly asked the system to remember. Meanwhile, a web-based synchronization agent, Gmail-style, would remember every message sent or received, every email address and every phone number used, and build social networking heuristics to decide which ones to offer up as alternatives when an answer wasn't found in the local cache. Lacking an answer there, the system would query the broader social network.

A Web 2.0 word processor would support wiki-style collaborative editing, not just standalone documents. But it would also support the rich formatting we've come to expect in PC-based word processors. Writely is a good example of such an application, although it hasn't yet gained wide traction.

Nor will the Web 2.0 revolution be limited to PC applications. Salesforce.com demonstrates how the web can be used to deliver software as a service, in enterprise scale applications such as CRM.

The competitive opportunity for new entrants is to fully embrace the potential of Web 2.0. Companies that succeed will create applications that learn from their users, using an architecture of participation to build a commanding advantage not just in the software interface, but in the richness of the shared data.

Core Competencies of Web 2.0 Companies

In exploring the seven principles above, we've highlighted some of the principal features of Web 2.0. Each of the examples we've explored demonstrates one or more of those key principles, but may miss others. Let's close, therefore, by summarizing what we believe to be the core competencies of Web 2.0 companies:

• Services, not packaged software, with cost-effective scalability
• Control over unique, hard-to-recreate data sources that get richer as more people use them
• Trusting users as co-developers
• Harnessing collective intelligence
• Leveraging the long tail through customer self-service
• Software above the level of a single device
• Lightweight user interfaces, development models, AND business models

The next time a company claims that it's "Web 2.0," test their features against the list above. The more points they score, the more they are worthy of the name. Remember, though, that excellence in one area may be more telling than some small steps in all seven.

Tim O'Reilly
O’Reilly Media, Inc., tim@oreilly.com
President and CEO