Column 2

The morning finished with Jared Spataro, a Microsoft product manager for SharePoint, responsible for enterprise search: namely, the group in which FAST will belong after the acquisition completes. He talked about why Microsoft is making this acquisition, how FAST will benefit, and what this means for customers.

Microsoft started to look at enterprise search about 18 months ago when they realized that their customers no longer saw search as just a feature, but that it was actually shaping the user experience. They found a huge gap in the market between high-end and low-end enterprise search segments, and created a mid-range search capability combined within the SharePoint platform. They also attacked the low end of the market by introducing Search Server Express, a free downloadable product. But that left the high end of the market, which Microsoft is approaching through the acquisition of FAST. So the answer to the question “what’s in it for Microsoft?”: total search world domination.

So what’s in it for FAST, besides $1.2B? It gives them scalability both in their ability to innovate and in the massive sales and marketing channel that will expand their product reach. Microsoft has recently bought in to the idea of distributed development, both to find and retain talent and because of non-US acquisitions, meaning that FAST’s development team can stay in Oslo, far from Redmond and hence a bit autonomous.

At the high end, of course, FAST runs on non-Microsoft platforms, and Microsoft is committed to continuing support and innovation across all platforms, a stance that should somewhat calm the fears of existing FAST customers. Spataro also talked about how it’s an advantage to customers that they offer complementary capabilities in enterprise search across the low, medium and high tiers; personally, I’ve never seen a big advantage to having multiple products in the same product class but based on different technologies available from the same vendor, since there will be confusion at the boundaries and some uncomfortable migrations.

He summed up with the overall SharePoint strategy, based on the pillars of business intelligence, collaboration, portal, search, content management and business processes. It’s not their intention to bury FAST inside SharePoint, although it will likely end up as part of the platform at least for branding purposes.

Tom Davenport presented on competing on analytics — he published an article with this title in 2006 in HBR. He believes that the planets are aligned for analytics:

• Powerful IT, and a new model for IT use
• Data critical mass: ERP, POS and web data
• Skills sufficiency, at least for the individual pieces
• Business need: a differentiated, personalized, well-informed easy use experience

He makes a distinction between reporting and analytics, and sees analytics as a way for companies to find the best customers and charging them the right price, or analyzing search logs to design a better website.

He sees the following attributes of a user-centric analytical strategy:

• Analytics are used to design and modify the customer experience
• Analytics are used to measure and maximize user engagement
• Analytics are used to determine what the user wants, and personalize to the user
• Analytics are employed across all customer channels
• Analytics are made available to the user

This includes companies such as Amazon and Netflix through their targeted recommendations, Google with customized ads and do-it-yourself analytics, eBay with behavioral targeting, Harrah’s and Marriott with loyalty programs, and Royal Bank of Canada and Capital One with targeted cross-selling across channels. Analytics can also be used for public service: New York City reduced crime through predictive analytics of where crimes were most likely to occur.

He stepped through what’s required for competition grade analytics: data (which he envisions in a data warehouse, counter to Weinberger’s arguments about the more serendipitous discovery of data), enterprise (widespread access to a centralized data store), leadership (executive commitment), targets (focusing analytic activity), and analysts (professional, semi-pro and amateurs, using all levels of analytical tools).

He finished up with the next steps for analytics, from the pursuit of new data types to search/BI combinations to better model management.

David Weinberger — author of Everything is Miscellaneous — spoke about the power of digital disorder, and how we need to unlearn what we think that we know about the best ways to organize information. He feels that we’re approaching the end of the age of information — by which he means a focus on rigidly structured information — and a move away from being “informationalized”, where we consider everything to be information even if they’re just symbolic representations of reality.

He looked at how many projects, typically physical projects, require a much greater degree of control as they increase in size, but contrasts that with the web, which has growth only because of the lack of control. Control doesn’t scale; we just thought that it did, and managed to scale with control by eliminating information.

There are two orders for how things are traditionally organized: in the case of physical objects, there’s the first order, namely, the physical order in which they are placed; and the second order, which is a catalog of the physical objects, like a card catalog in a library, which uses a limited and pre-determined taxonomy for categorizing the objects.

In the new world of organization, we allow for user-generated folksonomies to generate metadata that we couldn’t have possibly thought of for the objects. These multiple layers of metadata online allow for a physical object to virtually be in more than one place at a time; when the concepts are applied to online data rather than physical objects, the division between data and metadata starts to blur. All contents are also connections: everything leads to everything else, creating a wonderfully messy mass of interconnected data. The web, of course, excels at creating connections because of the basic premise of linking: we create hypertext links on pages to make connections that are important to us. The user revolution, therefore, is not just about us creating our own content; we also control the links, hence control the connections between content and the organization of that content. Digg, Twitter, your RSS feeds and other socially-created sites create our new “front page”, replacing the newspaper of old: why would you read someone else’s idea of what’s important, rather than self-select what you’re interested in reading?

A key thing is not to set arbitrary limits; he cites the example of the Library of Congress recently posting a huge set of historical photos on Flickr to allow open tagging by everyone, which has since run up against Flickr’s arbitrary limit of 75 tags per photo. Tagging like this helps to destroy stereotypes: the more data/metadata that you have about someone or something, the less likely you are to make a shallow characterization.

Weinberger’s a great speaker, and uses some really funny and compelling images in his slides.

Clare Hart, EVP of Dow Jones’ Enterprise Media Group spoke about rising expectations and new patterns for interacting with information. She started with the four macro trends that are impacting business and consumers today:

• Globalization
• Distributed workforce
• Follow the sun business cycle
• Information overload

Information is being exchanged around the world instantaneously, and this constantly flowing river of information is changing how companies react to events and fundamentally how they do business. Information overload — actually relevancy overload — makes it difficult to find the right information unless there are tools such as sophisticated taxonomies and tagging applied to properly filter the information. In my view, lack of relevancy is the most common reason that people ignore information that is available to them: some people don’t Google for information because they have a difficult time separating the wheat from the chaff.

A couple of years ago, Dow Jones acquired Factiva, which provides search and filtering of external news information to provide customized feeds to their customers; she stepped us through how their Factiva service presents this information in order to provide the most relevant information from traditional news sources as well as blogs and other non-traditional news sources.

She had an interesting cause-and-effect slide on how an event occurs, that triggers news, commentary and analysis that feeds into a discussion on that event and its analysis. For example, an investment banker interested in a specific industry would be presented with a screen of information in the event of a significant loss of a company in that industry: the original news story, internal and external research, market reactions and other related information that makes up the bigger picture driving potential investment in that industry. From this, he can drill through to more detailed contextual information on the specific company and its competitors, as well as general market information. For a different role, such as a wealth manager managing a client portfolio, the same information about a company’s losses has different meaning, hence is presented in a different way: exposure to that company within a client’s portfolio as well as specific client information and even news articles related to the client’s investment strategy and personal interests.

As she points out, this is search without the search box: the search is executed behind the scenes and the results pushed through to the recipient based on his known role and interests. The investment banker is looking to improve his investment-related reactions to the event; the wealth manager is looking to improve the relationship with his client.

She finished up with the benefits of search without the search box:

• Anticipatory discovery
• Contextual linking
• 360 degree view
• understand business from multiple angles
• Drive confidence
• Ability to act

The wifi continues to be flaky — good connection strength but no actual connectivity — but there’s power at the tables which almost makes up for it. Almost.

We started the day with John Markus Lervik (plus a light show, an enormous inflated ball, a small bit of theater and a live band) discussing the theme of the conference: the user revolution. There’s a strong relationship emerging between business intelligence and search, and the judicious use of enterprise search has moved beyond a commodity to become a competitive differentiator as well as playing a critical role in many government programs (the ones that keep tabs on all of us). Google made us all see that we can use search for finding information and relationships that were never available to us before; enterprise search such as FAST gives that same ability to employees inside an organization, allowing them to search the corporate information assets in order to do their jobs better. No longer are users stuck with a static view of information created by a report designer, but can create their own views for their own purposes.

John Hagel of the Deloitte & Touche Silicon Valley Research Lab spoke to us next about the impact of the user revolution on your organization: how it’s putting pressure on traditional organizations because of reduced product life cycles and other factors, contributing to life spans of companies.

He spoke about the forces that are driving the user revolution within business:

• The move from the scarce resource of limited shelf space for products and services to unlimited shelf space: what drives the long tail. The scarce resource is now our attention. There’s a much lower cost of interaction now, including finding information about vendors and switching to a new vendor. Customers are gaining more power.
• There’s a shift to intangible assets — mostly human talent — as key competitive differentiators rather than the old model of competition based on physical assets such as plants. There’s greater competition for this talent, since it’s much easier for people to move to another organization or even go out on their own; the key is to become a magnet for attracting talent by creating the right sort of environment, particularly an environment that builds talent. Talent is gaining more power, too.

He went on to discuss the change from push to pull business interaction models, and how there’s a move to some new performance metrics: return on attention (e.g., measuring profitability by customer rather than by product), return on information (e.g., what can we find out about participants/customers by their interactions with us, and how can we provide them with better information) and return on skills.

Hagel made a big deal at the beginning of his presentation about how he wasn’t using a PowerPoint deck, but then proceeded to read his presentation from notes in a mostly uninflected voice, making it difficult to stay focused on his talk — I’m sure that I missed a lot here. I never thought that I’d say this, but his presentation might have actually been improved by the use of PowerPoint.

Usually when I attend a vendor/product user conference, I know quite a lot about the product; this time, however, I’m flying a bit blind. I’m at FASTforward, which is ostensibly the user conference for FAST Search & Transfer, but is actually a lot more than that: billed as “the industry’s largest business & technology conference dedicated to search-driven innovation”, it piqued my Enterprise 2.0 interest when I saw a speaker lineup that includes Andrew McAfee, Don Tapscott and Tom Davenport.

For those of you reading this on my usual Column 2 blog, note that I’m also cross-posting to the FASTforward blog, where I’ve been invited to add my opinions on the conference. For my regular readers, you know that the first thing that I comment on at a conference is the wifi; I can report that there is (slightly flaky) wifi at the conference, although not throughout the hotel. As I always like to point out, tech conference organizers really have to start using open wifi as a serious criterion for selecting conference hotels.

Unlike the usual opening evening of registration and cocktail party, they’re kicking things off with a short address by John Markus Lervik, FAST’s CEO, then presentations by McAfee and Tapscott. The attendance at the conference is an impressive 1200, although I’m sure that they’re not all here yet, which has to be driven in part by the interest generated by Microsoft’s recent acquisition of FAST. Lervik welcomed Microsoft as a platinum sponsor of the conference, which elicited a good laugh from the audience.

McAfee talked about Enterprise 2.0 and what it will take to bring about a world of change. In the past year, he points out, we’ve moved beyond “what”, have some consideration of “why”, and lots of interest in “how” in our Enterprise 2.0 discussions. He went on to present a series of hypotheses about successful Enterprise 2.0 adoption: technologies, projects/initiatives, and corporate culture.

Looking at what the current tools and technologies bring to Enterprise 2.0 success:

• Tools are intuitive and easy to use — a key to acceptance of the technology, but something that’s also difficult to achieve
• Tools are egalitarian and freeform
• Borders seem appropriate to users, so that it’s obvious how far specific information should be shared, and how easy it is to find other people and information
• At least some of the tools are explicitly social, to allow people to express themselves and find others with similar interests
• Toolset is quickly standardized

As for initiatives that foster success:

• Incentives exist, and are soft: incentives for adopting Enterprise 2.0 are not monetary in nature, but are more about making people feel warm and fuzzy about the initiatives; this tends to be difficult in organizations that have had very different incentives and employee reward programs in the past
• Excellent gardeners exist to accelerate the emergence of structure, whether or not they contribute content
• Patient and dedicated evangelists exist: those spending their time popularizing the tools and techniques because they believe that they can make a difference
• Energy and activity are primarily bottom-up
• Effort has official and unofficial support from the top: both funding and blessings from senior levels to allow evangelists and others to work their magic, but also a mindset that that enterprise is serious about being engaged in the initiatives, such as executive-level blogging
• Goals are clear and explained: companies have to know why they’re taking on Enterprise 2.0 (e.g., better collaboration), not just because it’s the cool new stuff

Moving on to culture, the key success factors are:

• People are trusted; as McAfee put it, if the people in an organization wanted to distribute hate literature or pornography, they wouldn’t have waited for Enterprise 2.0 to do it, so don’t assume that providing these tools is going to cause people to change their basic nature
• Slack exists in the workweek; recognizing this gives people the latitude to blog or create wiki content within the organization rather than appear to be busy when they’re not; organizations that measure employees only on their number of billable hours obviously won’t be aligned with this
• Helpfulness has been the norm
• Top management accepts lateralization, which facilitates public content being created by any level within an organization as well as its customers and partners, not just through a sanitized corporate communications process
• There are lots of young people
• There is pent-up demand for better sharing, and a good deal of frustration with what the current technologies don’t allow them to do

His conclusions:

• Enterprise 2.0 is going to increase differences between companies, more clearly separating winners from losers: the winners have greater willingness to embark on innovative strategies, more sincerity of effort and greater ability to execute. Personally, I think that this is a bit of a chicken-and-egg argument: are the companies more successful because they adopt Enterprise 2.0, or do they adopt Enterprise 2.0 because they recognize innovative application of technology as a key to success?
• These differences will be important, making companies more responsive to market and other changes, do a better job of knowledge capture and sharing, and harnessing the collective intelligence.

We then heard from Don Tapscott. I’ve heard him speak several times, including at last year’s Enterprise 2.0 conference and in a webinar last month, and there was some amount of repetition here as he discussed the new enterprise. The four drivers for change as he describes it are:

• Web 2.0, including such underlying innovations as broadband penetration, geo-spatiality of pretty much any device that’s networked, true multimedia blurring the line between live action and animation, standards-based web services and the integration that they enable.
• The net generation, representing a demographic revolution of kids who grew up digital without fear of technology; they spend more time on their computer than watching TV, and much less time watching TV than their baby boomer parents. Tapscott feels that they’re developing amazing mad skillz in technology, although some recent studies have shown that this just isn’t true (except maybe from the standpoint of someone who struggles with technology). What is revolutionary is how they interact with the technology, creating new social ways of doing things that we old-timers just never thought of doing.
• The social revolution and the rise of collaborative communities like Flickr, YouTube and Facebook to beat out the old-style competition. This is a direct outcome of what I mentioned in the previous point, namely, that the net generation is creating new ways of social interaction on the web.
• The economic revolution, full of completely new and disruptive business models, like Google and eBay: digital conglomerates building on the economics of collaboration. Business models have changed from traditional, vertically-integrated industrial-age corporations to extended enterprises to business webs to mass collaboration amongst loosely-coupled entities.

He discussed the Goldcorp case study from his WIkinomics book: Goldcorp published their secret geological survey data and offered a prize for whoever could analyze it in a way that would help them to find more gold; they had submissions from all over the world, awarded a few hundred thousand dollars in prize money, and made over $3B in new gold finds. Now that’s mass collaboration.

Tapscott listed seven different business models that harness mass collaboration, also from Wikinomics:

• Peer pioneers (e.g., Spikesource and other open-source based enterprises)
• Ideagoras (open idea markets, e.g., Proctor & Gamble, who have half of their innovations come from outside of the corporation)
• Prosumers (where customers become producers, e.g., Second Life; the music industry with third-party remixes)
• The new Alexandrians (the sharing of science, e.g., human genome project)
• Open platforms (e.g., Amazon APIs to allow developers to create new applications on top of their platform, which now generates 1/3 of their revenue)
• The global plant floor (e.g., Boeing creating the 787 as a peer-produced aircraft with their suppliers)
• The wiki workplace (transforming the way that an enterprise works through the application of Enterprise 2.0 tools such as wikis for collaboration, e.g. Geek Squad product management within Best Buy)

He closed with the thought that this is a time of paradigm shift, which in turn creates a crisis of leadership: new paradigms are nearly always received with coolness, even mockery or hostility, as those with vested interests fight the change. Paradigm shifts involve dislocation, conflict, confusion and uncertainty, and demands such a different view of things that established leaders are often last to be won over, if at all. Instead, this is calling forth a new generation of leaders from the collective enterprise, with different attitudes and different skills.

My coverage of FASTforward will continue tomorrow, flaky wifi permitting; I’m off to schmooze with the other FASTforward bloggers.