Welcome to the second in my series of Web 2.0 interviews, in which I interview people in the Web community who are building or shaping Web 2.0 - i.e. the Web as Platform. And who better to talk to than the person who organized the hugely successful Web 2.0 conference held in San Francisco in October 2004, Tim O'Reilly.
Tim O'Reilly is the founder and CEO of O'Reilly Media, one of the most successful computer book and online media publishers in the world. I won't regurgitate Tim's official bio, but let me put this interview into a personal perspective. As an English Lit major from the early 90's and a passionate Webhead now, my niche is at the intersection of Publishing and the Web. Tim was one of the people who invented that intersection, so it was a thrill to talk to Tim and I thank him for granting an interview to an unknown blogger from New Zealand.
This interview will be published here on Read/Write Web in 3 instalments. The first instalment is focused on Web 2.0 and web technology. In Part 2 we explore business models for Web content - including discussion of RSS. Part 3 is about books and publishing in particular, but also covers social software and Remix culture.
If you'd like to be notified when Parts 2 and 3 are published, I invite you to subscribe to my RSS feed (right-click and copy to your favourite RSS Aggregator). Here is Part 1 for you now:
Web 2.0 Conference Review
Richard: Before the Web 2.0 conference, in your article Ask Jeff Bezos, Adam Bosworth..., you talked about wanting to gather insights into the success (and future) of Web 2.0 companies such as Google, Amazon, Apple. Now that the conference is over, what were the key insights about Web 2.0 that you personally got from the conference - which you didn't know beforehand?
Tim: When you work on putting together the program, you know what's in it, so I wasn't surprised terribly much by anything. There were a few things that stood out, though. For example, Mark Cuban's insistence that HD [High Definition] makes movies safer from the MPAA's online piracy fears is an interesting application of an idea that I've been aware of for some time - namely that storage is getting cheaper faster than bandwidth [is getting cheaper]. And of course, we were all waiting to see who Mark would skewer!
Kapor, Doctorow and Lessig raised "awareness of the profound political and legal dimensions of Web 2.0."
I was also blown away by the lineup of Mitch Kapor, Cory Doctorow, and Larry Lessig. I've heard all of them speak before - each of them has been at my conferences many times - but I thought that together they made a really rousing combination, raising awareness of the profound political and legal dimensions of Web 2.0. As Larry has often said, we can't let the past use legal means to prevent the future from happening!
There were also a couple of things that came up at the last minute. For instance, we had a High Order Bit by an old friend of mine, Andrew Singer, about reconfigurable computing and the performance and low power possibilities there. It came out because I sent him an invite to the conference and he said: "Oh I'd like to present something I'm doing". That was a surprise thing, because John and I hadn't planned for it in the program until the very last minute. This is the kind of technology out of left field that could really change the rules. I've been following FPGAs and other forms of reconfigurable computing, but I hadn't realized that it could lower the power consumption so much - which could have real implications for portable devices.
Apple and Web 2.0
Richard: In the blog coverage of Web 2.0 I heard a lot about Amazon, Google and Yahoo!, but I didn't hear a lot about Apple...
"[Apple is like] Moses showing the way to the promised land, but they don't actually go there."
Tim: Apple is in a position they've been in a lot of times before. They're like Moses showing the way to the promised land, but they don't actually go there. In a lot of my talks I use iTunes as an example of what Dave Stutz calls "software above the level of a single device." Here is this application designed from the get-go to span the handheld to the server, with the PC a way station. And that's a paradigm for the future. But because Apple ends up with a closed platform, they don't necessarily take that out to the industry. Someone else adopts the ideas and takes them further. I think we're seeing that the wave of innovation that Mac OS X represented has really inspired a lot of people.
And even as far as their participation in the conference goes, it was a bit of a disappointment. They had promised to send Eddy Cue, who runs the iTunes business, but at the last minute he dropped out and sent a substitute. That's a sign that Apple doesn't take reaching out to this tech audience as seriously as they should.
Microsoft and Web 2.0
Richard: A key part of the Web 2.0 theory is "the commoditization of software" - how the value is now in the services enabled by that software. It seems though that the elephant in the room is still Microsoft, who remain committed to locking users in with their software - e.g. Longhorn is the next generation of that strategy. Do you think the success of Web 2.0 is dependent on Microsoft's software-focused strategy failing? Or can Web 2.0 and Longhorn co-exist and both succeed?
"I think the business model of Microsoft is going to have to change."
Tim: First of all I think that there's never a clear succession. You know, IBM didn't go away when the PC took over as the center of the computing landscape. But they had to change. And I think Microsoft will have to change. I think that the business of Microsoft, the company of Microsoft, is going to continue to succeed. But I think the business model of Microsoft is going to have to change.
And I don't think that Longhorn will change the dynamics all that significantly. There's some pretty wonderful technology in Longhorn. But if you look at the release cycle, you're talking 5-6 years - and now they're saying, well maybe we better accelerate and take some pieces and put Avalon into Windows XP rather than waiting for the full Longhorn. But they can't just keep up with the pace of a Web-based offering where you can roll out new products to all your users without even asking, and update products dynamically. I just think that [Web-based] software services have a better model. So I think that Microsoft will continue to dominate on the PC, but the PC is going to be a smaller and smaller part of the entire business.
Similarly I think that Microsoft will increasingly feel margin pressure from Linux as well as people saying: well actually the applications that really matter to me are not on my PC. And so they're going to be able to extract less of a monopoly rent, so to speak. This is very similar to what happened to IBM - they had to shed hundreds of thousands of workers, they went from being an industry goliath to simply being an industry giant! I think that's exactly what will happen to Microsoft. They will lose their pre-eminent position, but they will still be an extremely powerful and successful company.
Network Effects and Service Levels
Richard: Talking a bit more about how Web 2.0 is about services rather than software... you argue that once a Web 2.0 company reaches a certain level of users and "the network effect" kicks in - it becomes hard for new entrants to break into that market. Is there a danger that service levels at the dominant companies (like EBay and Amazon) will eventually slip and they get away with it, in much the same way that Microsoft has let the quality of Internet Explorer slip? That is, the users will persist with the service because it is "good enough"?
"...there will be companies that get lazy because they think they've got it all sewn up."
Tim: Yes I think there's absolutely truth in that observation. I think that companies always become complacent, over time. Or most companies, that is. There are great companies that continue to hold the dominant position for hundreds of years - think Proctor & Gamble for example - by continuing to innovate. And I would say that some of these companies will survive and continue to be innovative companies. Others will struggle.
And again you can also see companies that coast on their laurels for a while and then wake up - Yahoo!'s a good example right now. Yahoo! started out as an Internet darling and ended up becoming a bit of a stodgy media company in the model of AOL. But they're really waking up now and they're inventing a lot of cool new stuff. The competition with Google has made them realize they've got to get their act together and I think they're responding.
So I think we'll see a lot of ebb and flow and back and forth, and yes - there will be companies that get lazy because they think they've got it all sewn up. But that's sort of a natural thing that happens in business, I don't think there's anything unique to Web 2.0 about it.
Data Ownership and Lock-in
Richard: From a user perspective rather than a developer perspective, a lot of what Web 2.0 is about is users producing content and not just consuming it. An example you've used in the past to illustrate this is the "user added value" on Amazon, compared to say its online competitor Barnes & Noble. The other side of that coin though is the "data lock-in" of users, where users may not necessarily have control over their content. Is this something for users to be concerned about, given that people are used to having relative control over the data on their desktop?
"It's that data mobility zone that actually creates a lot of the free-flow ideas on the Net."
Tim: Absolutely. I actually ran a couple of panels on this at our Open Source convention, a year and a half or two years ago - called 'Open Data - Do We Need a Bill of Rights for Web Services?'. We had people from Amazon, EBay and others trying to answer that question: what does it mean when we're investing our online data in these sites? Will we end up with something like the Open Source movement because the companies have ended up locking in their users? And we see this right now - for example the Danger Hiptop. They basically tried to lock-in their users. So there are companies that are trying to use data lock-in as a competitive tool - and there will eventually be a recognition that this is a problem.
But the actual data ownership is maybe less important, in some areas, than people think. When we talk about user-contributed data, we're not just talking about my data proper (as in having your mail stored on Gmail or Yahoo! Mail or whatever.) We're also talking about a kind of content that users are contributing to a collective work. So for example, Amazon Reviews - people don't really care about that in the same way. They're not saying "Oh I created that review and I want to be able to export it to Barnes & Noble as well". They're creating it in a particular context of that community.
"In some ways, we're re-defining what fair use means."
And when you think about ownership, it really gets portrayed as black and white - when in fact it's grey. It's kind of like valance electrons, where data has a center of attraction but it also is free to move. So when I write an Amazon review, it is mine in some sense - and you'll find that when people submit reviews to Amazon, they may also submit them to somewhere else because they have a copy of it. And nobody particularly cares. It's that data mobility zone that actually creates a lot of the free-flow ideas on the Net.
In some ways, we're re-defining what fair use means. Sometimes people send round entire stories, sometimes people get sent a New York Times article and they post it to a mailing list. Is that 'fair use' - maybe not, but maybe we're re-defining fair use. And I think there's just a lot of experimentation, a lot of understanding of what this new medium means - that we have to come to grips with. One of Lessig's key points is that we don't know how these things are going to work out, and we need to give them time to develop before we legislate about them.
"I believe that data lock-in of various kinds is going to be one of the key tools of business advantage in the internet era."
But anyway, back to your point. Despite what I've said about redefining the boundaries of fair use, and the free flow of data in collective works, data lock-in absolutely should be a concern. I believe that data lock-in of various kinds is going to be one of the key tools of business advantage in the internet era. I think that as companies realize this, they will figure out how to be evil - so to speak (to use Google's terminology) - and I predict that we will in fact have some major battles in that area.
To be continued in Parts 2 and 3...