Like it or not, Web 2.0 is heading for your network

The inevitability of Web 2.0, how to attract VC money and if the iPhone will always be cool are topics discussed by DEMO's Chris Shipley in a recent Network World Chat.

Moderator-Julie: Welcome and thank you for coming. Our guest today is industry icon Chris Shipley, Executive Producer of the DEMO Conferences. For over 16 years, DEMO has been the premier place to launch new technology. The 2008 DEMO Conference will be held January 28-30 in Palm Desert, Calif., where more than 70 of the world's most promising technologies will be unveiled. No one is in a better position to discuss what the hottest technologies will be, and how they impact our work and home lives, than Shipley.

Now, onto the chat.

Moderator-Keith: While we wait for Chris to begin answering audience questions, here's a pre-submitted question and answer: "We've often seen technologies that have bubbled up from the consumer market move into the enterprise. Will we continue to see that in 2008?"

Chris_Shipley: You've identified a major trend that began last year and will continue well into the future. Social Internet applications, products such as the iPod and iPhone, have done so much to reset individual expectations about what a computing experience ought to be. Consumers have become adept with technology and they have very high expectations around usability, performance, and functionality. A person who spends hours online in the evening in YouTube or Facebook or any of a myriad of Web application isn't going to go to work the next morning and be satisfied with a clunky ERP interface.

So I’d say that it is the consumer experience with technology that is bubbling over into the enterprise and placing new demands for usability and flexibility in workplace applications.

Prodigy: Hi Chris -- With the potential for a recession in the U.S. this year, what will be the hottest technology for 2008?

Chris_Shipley: Great question ... I think we're going to see some slowing of purchasing across technology sectors in this first quarter, then a settling in on productivity (business) and entertainment (consumer) technologies paid for on an as-you-go basis. I realize that doesn't speak to specific technologies, but rather to business models.

J: Which two or three companies from your last couple of DEMO shows are doing the best?

Chris_Shipley: Remarkably, most of the companies that come through DEMO go on to do very well. We've seen GrandCentral, for example, be acquired by Google, which is certainly a great outcome for that company. Others do well as a measure of their ability to adapt to a changing market and customer base. VideoEgg might be a good example of that.

Moderator-Keith: Here's another pre-submitted question and answer: "When evaluating a product for DEMO, what factors do you take into consideration before choosing them?"

Chris_Shipley: I look for products that are brand new and can be introduced at DEMO, of course, but also looking for products that challenge the market. They create new categories, challenge existing competitors, introduce new business models, or otherwise change the game. Some products do this in small ways; others in very big, dramatic steps.

Alper Celik (Stockholm): Hi from Stockholm, I am a master student in ICT entrepreneurship at KTH and I want to ask what you think about the entrepreneurship in Silicon Valley. Do you think that U.S. entrepreneurs are luckier than others because of being in the center of the "IT world"? What are the most difficult challenges for an entrepreneur in the U.S., and can you explain a little about what "Idea Capitalist" really means?

Chris_Shipley: I love this question! My colleague, Carla Thompson, and I have been debating this very issue over the last few days. I think Silicon Valley entrepreneurs are fortunate to be at the epicenter of so much activity and where there is so much support for startup firms. But don't confuse that with luck. Success comes from hard work, and I believe that you make your own luck as a technology entrepreneur. No matter if you're in Silicon Valley or elsewhere in the world. The IT market is a global one and every company will have to compete on that basis.

Pparker: What would you say to a CTO in a mid-sized company who was resisting Web 2.0 technologies because of potential leakage of confidential information, or just the idea that such technologies were a security threat in general?

Chris_Shipley: I'd say that you can't resist a tidal wave and the concepts behind the social Web are forces that can't be stopped, they have to be managed. So what is your corporate policy on data/information integrity? How do you inform and train employees about best practices?

JeffCaruso: Are you seeing a ripple effect from the iPhone? That is, are there other hot technologies that are trying to leverage the iPhone's success, or compete against it?

Chris_Shipley: Well, we're seeing lots of hardware designed in the color white. Seriously, iPhone and Apple have set a standard for usability. Consumers are coming to expect more and more usable products. That high bar is leading to more smartly designed products, and that's a good thing.

J: Will Facebook own the enterprise social network? Or do you see players with better potential (and the ability to meet enterprise requirements) arising?

Chris_Shipley: I think Facebook is proving to be an effective inter-enterprise social network. It's bringing colleagues together across organizations. But clearly Facebook is not a private network and that need for privacy and confidentiality may open the doors for other players. Still, you've got to think about the value of a closed vs. open social network. Do you lose the effectiveness of a social network by closing the community?

Moderator-Julie: Pre-submitted question: "How do you think enterprises are doing in terms of adopting Web 2.0 technology into their infrastructures?"

Chris_Shipley: This is less of a technical issue than it is a cultural one. Workgroups, I believe, are already finding ways to bring social applications into their work environment. It's easy to do because most collaborative applications carry little to no cost and are easily accessible by a Web browser. So the cultural question is how does the data center seek to manage (or not) these rogue applications? Does the organization foster open collaboration? Does it promote adoption of readily available tools to facilitate workgroup interaction? And what, if any, policy does an organization put in place to insure data integrity and security?

J: Do you see a bursting of the bubble ahead for consumer Web 2.0 products? If so, when?

Chris_Shipley: Bubble? What bubble? Actually, I've written about this quite a bit on DEMOLetter. A bubble implies economic risk, and I think there's been little of that in this Web 2.0 cycle of investment. Certainly, there's been a ton of hype and that will die down over the next few months. We'll see a thinning of the crowd as a range of experiments prove to be failures and as some smart little companies get gobbled up by bigger players. So, consolidation and sobering for sure. Bubble bursting? Nah.

Wirelessdog1: Isn't it natural that corporations would be reluctant or slow to embrace new technology, given the inherent risks involved? After all, corporations have more to lose than consumers when it comes to network security.

Chris_Shipley: Yes, corporations are risk adverse, and should be, in order to maintain the quality of service required to keep the organization running effectively. The counter force to that risk, though is the "consumerization" of the enterprise. Individuals coming to work each day are bringing new technologies into the organization. The role of IT is to ensure that these new technologies don't stress the fundamental infrastructure, while at the same time enabling experimentation and productivity at the end points of the network. It's a tough line to walk.

BartK: What mistakes (if any) are startups making these days?

Chris_Shipley: Where to start? ... Actually, smart startups should be making lots of mistakes and making them quickly, especially if they are putting consumer-facing products in the market. The Web enables startups to rapidly test and iterate for improvement. Some of these tests will fail, but that's OK. Smart startups learn and go on to test other things. So, the biggest mistake a startup can make today is to NOT make mistakes, NOT take risks, NOT experiment.

Moderator-Julie: Pre-submitted question: "What do you think the hottest emerging technologies are for 2008?"

Chris_Shipley: The most important work won't seem very "hot" because too many people find infrastructure "boring." All that boring infrastructure, though, is necessary for a rich, exciting, "hot" user experience. So I think some of the most important and "hot" technologies will be those that support the realtime communities and applications that users are beginning to demand. In fact, "realtime" is the watch word for '08, and we'll begin to see both the core technologies and the new applications that enable an on-demand, realtime experience for millions of users.

Kolya: Chris, can you tell us about any trends that you're seeing in this year's DEMO companies?

Chris_Shipley: DEMO really is all about exposing trends through the products that launch at the event. In broad strokes, the 78 products at this next DEMO point to the "consumerization" of the enterprise, as I spoke of before, and the impact of and expectation for the next of realtime Web applications. These will require improvements to infrastructure and protocols to ensure performance and reliability while meeting individuals' high expectations of what an effective Web productivity or entertainment application should be.

J: What new categories of companies or business models particularly excite you?

Chris_Shipley: I get excited by companies that actually have business models and that have smart plans for proving them in the market. Nothing is more troubling to me than a company that has created some feature or product, but has no idea how to make it a viable product in the market. We've seen so many companies over the last 24 months rush products and services to market, assume that they can get a bunch of users, THEN try to figure out how to make a business of it. There's a place for that experimentation, I suppose, but it needs to start with a smart hypothesis, and too many of companies don't even have that.

Alper Celik (Stockholm): How do you decide which companies to work with -- or not to work with -- for DEMO?

Chris_Shipley: I'm looking for PRODUCTS to bring to DEMO, not companies. I want products that are challenging the market in one way or another. But I also want to see that they are coming from a company or team that has the staying power to make the product viable in the market. So I'm looking for a smart team with a plan to make their product real.

Gokhan [Stockholm]: Many experts say that 2008 will be the year of products that save time for consumers, as time is the most scarce resource for people nowadays. On the other hand, I believe Facebook doesn't save time but wastes time. How do you explain this?

Chris_Shipley: People only *think* they want to save time. Think of all those products and devices that are about bringing efficiency to the consumer life... and how complex our lives have become. We may say we want time savers but what we really want, I think, are time engagers. We want to feel connected and validated. Facebook does that for many people.

Pparker: Other than the obvious Facebook, what Web 2.0 products/services do you see successfully penetrating the corporate environment? Perhaps things that haven't gotten much visibility yet.

Chris_Shipley: We'll see communications tools make a big impact, much like Skype has done. But now think video conferencing, screen sharing, collaboration. Lots of these capabilities are coming in consumer accessible services.

Moderator-Julie: Pre-submitted question: "Which technologies will move from "emerging" to "mainstream"? (Meaning are there any technologies that have been out there a while that people are only now starting to discover, deploy, build upon?)"

Chris_Shipley: We'll see a lot of work emerge in the IPTV sector. In the U.S. market, at least, the infrastructure to support realtime streaming video over IP is neither robust nor economical enough to deliver a TV-like experience simultaneously to millions of viewers. The technologies will be embedded in networks and devices, but what will be obvious to end users is that the online video experience is of higher quality and much more responsive.

Gokhan [Stockholm]: If I have a successful product and a smart team, what is in it for me to bring it to you?

Chris_Shipley: My colleagues and I see 1,500 or more startups each year. We can quickly assess your market position and challenges, give you feedback relative to the competitive field, maybe even suggest partners or investors. And it costs you nothing to share information. So why wouldn't you bring it to me?

BartK: Do you think that VCs are being more careful with their money to avoid an economic risk bubble? Or is there still a lot of money out there?

Chris_Shipley: There's a lot of money out there and investors are being more careful with it. VCs want to mitigate risk and maximize return. That's their job. So the more risk you can take out of a deal by gaining customer traction, proving the business model, having initial revenue, etc.

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