Any veteran of the software industry will tell you that version 2.0 of any product tends to be a shortlived staging post on the way to 3.0, which is where it finally hits the mark. Windows was a classic example. 1.0 was so buggy it was hardly worth using. 2.0 fixed some serious problems but still had a lot of shortcomings. 3.0, launched in May 1990, was an instant success, and the rest of the story, as they say, is history.
Don't be surprised, then, if Web 2.0 also turns out to be just a staging post on the way to a much more mature and durable Web 3.0 is going to deliver a new generation of business applicationsWeb 3.0 era. Over the next couple of weeks I'm going to be writing a series of posts about what I see as the key characteristics of Web 3.0, using a variety of on-demand companies by way of illustration. Of course I'll be mentioning Google, Amazon.com and eBay. But don't assume these companies will inevitably become the dominant players of Web 3.0. I'll also be mentioning some less obvious players, including WebEx, WebSideStory, NetSuite, Jamcracker, Rearden Commerce and Salesforce.com. Each of these companies shed interesting light on how Web 3.0 may develop. As with any shift from one generation to the next, there's plenty of scope for new leaders to emerge — and for established front-runners to stumble — in the battle for supremacy.
I'd like to make one thing is absolutely clear right from the outset: Web 3.0 isn't just about shopping, entertainment and search. It's also going to deliver a new generation of business applications that will see business computing converge on the same fundamental on-demand architecture as consumer applications. So this is not something that's of merely passing interest to those who work in enterprise IT. It will radically change the organizations where they work and their own career paths. I'll write more on that in a later posting.
Today I'm going to start by mapping out a brief topology of Web 3.0. It's divided into three (and a half) distinct layers:
API services form the foundation layer. These are the raw hosted services that have powered Web 2.0 and will become the engines of Web 3.0 — Google's search and AdWords APIs, Amazon's affiliate APIs, a seemingly infinite ocean of RSS feeds, a multitude of functional services, such as those included in the StrikeIron Web Services Marketplace, and many other examples. Some of the providers, like Google and Amazon, are important players, but there is a huge long tail of smaller providers. One of the most significant characteristics of this layer is that it is a commodity layer. As Web 3.0 matures, an almost perfect market will emerge and squeeze out virtually all of the profit margin from the highest-volume services — and sometimes squeeze them into loss-leading or worse.
Aggregation services form the middle layer. These are the intermediaries that take some of the hassle out of locating all those raw API services by bundling them together in useful ways. Obvious examples today are the various RSS aggregators, and emerging web services marketplaces like the StrikeIron service. I'll have a lot more to say about these emerging platforms in several of my posts. There will be some lucrative businesses operating in this layer, but in my view it's not where most of the big money will be made.
Application services form the top layer, and this is where I believe the biggest, most durable profits will be found. These will not be like the established application categories we are used to, such as CRM, ERP or office, but a new class of composite applications that bring together functionality from multiple services to help users achieve their objectives in a flexible, intuitive and self-evident way. I'll have much more to say about these applications when I write about some of the companies I've mentioned in more detail. But an interesting example just surfaced in Swivel, Halsey Minor's new venture, which Dan Farber has been covering in his blog this week. Dan quotes one enthusiastic early user who describes the 'wow' moment of starting to use an application and discovering that it delivers utility he barely even knew existed. To me, that's a fundamental characteristic of a Web 3.0 application.
Serviced clients are the 'and-a-half' layer I mentioned earlier. There is a role for client-side logic in the Web 3.0 landscape, but users will expect it to be maintained and managed on their behalf, which is why I've chosen to call these clients 'serviced'. Whether those clients are based on browser technology or on Windows technology is moot point that I shall also be returning to. After all, everyone will want to know what role Microsoft might play in Web 3.0.