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The next big things in business technology? Ask your kid.
Russ Banham, CFO Magazine
February 1, 2007
Two years ago, CFO hired a new IT employee, an under-25 staffer who sat in an open cubicle. Due to the placement of his desk, the employee's work habits were easily observed by colleagues. We watched with quiet amusement as this scion of Generation Y went about his work each day. The routine was almost always the same: iPod on, Instant Messaging up, thumb drive in.
We're not laughing anymore. These days, writers at CFO carry MP3 players as entertainment and storage devices, sales staff rely on IM for communication, and editors use thumb drives to back up files. Truth is, over the past two decades or so, popular commercial technologies have dramatically altered how businesses operate. Indeed, you'd be hard-pressed to find an outfit — large or small — that doesn't depend on the same technologies found in a typical student's backpack.
This pattern — called consumerization — is fairly new. Many of the great inventions of the last century were designed to meet business needs, although most eventually found their way into mainstream consumer applications. For example, the first integrated circuits (designed by Texas Instruments's Jack Kilby and Fairchild Semiconductor's Robert Noyce) went into mainframe computers sold only to large businesses and the military, but later proved essential to the development of the personal computer.
Now, technologies aimed at the masses often make their way back to corporations. "The flash and sizzle are accepted by consumers first," says David Smith, an analyst at research firm Gartner. "Business follows."
The impact has become so profound, in fact, that Gartner now predicts consumers will have a bigger influence on business technology than those charged with overseeing business technology — that is, corporate IT managers. Peter Sondergaard, the firm's senior vice president of global research, believes consumerization will be the single most important trend in corporate IT over the next decade. In the next few years alone, things like image recognition, desktop search, mashups (recombinations of music, video, or Websites), and social networks will likely change how commerce itself is conducted.
Even technologies that would seem, at first glance, to be more suitable to businesses than to consumers are actually being exploited by teenagers, while companies watch and learn.
Take image-recognition software. This new Web tool lies at the heart of several intriguing Websites, including the popular Like.com, which enables online shoppers to search for items that resemble other ones. Thus, a 14-year-old can quickly locate a handbag just like the one Lindsay Lohan carried at the Golden Globes.
This may not seem like a major advance, but it is. Analysts say visual searches will create an entirely new way to sell. Executives like eBags Inc.'s Mark DeOrio already see the potential. "We just started using Like.com as another way to bring our products to the masses," says DeOrio, CFO at the online seller of handbags, luggage, and backpacks. The E-tailer carries more than 25,000 products, an inventory that would take consumers several weeks to browse. "Rather than using key words to find what you like," explains DeOrio, "Like.com lets you put a square around an item in a photo and find it, or a reasonable facsimile, instantaneously."
The promise of the technology goes beyond better-shopping-through-science. Patti Freeman Evans, senior analyst at Jupiter Research, says businesses could use image-recognition software to discern what competitors are charging for a particular product, or to find components or materials needed to make their own products. "Because the software lets you search for something based on its visual appearance," she notes, "you eliminate the problem of finding it through language alone."
Other consumer search tools are beginning to show up on corporate computers as well. Analysts believe desktop search engines, for instance, will dramatically increase the efficiency of workers. The programs, which are accessed through toolbars on browsers, enable users to seek out data on their computers — in much the same way they search for information using Internet search engines.
All kinds of data can be unearthed with these queries, including E-mail, attachments, and Outlook files. Yahoo recently teamed with X1 to offer an enterprise version of its popular consumer desktop-search product. Likewise, Google's Desktop Search, a feature the company started offering to consumers for free a year ago, is beginning to find converts among business users. "People started downloading Desktop Search or Yahoo X1's search tool at home and couldn't believe the burst in their productivity," says Smith. "Soon, the message spread that this consumer-grade software was incredibly valuable and, for the most part, free."
Mashups are also gaining in popularity. Essentially, a mashup is a stew of Websites or applications (like Web 2.0) that combine content from various virtual sources into a single display. A diagram taken from Mapquest, for example, can be melded with photos, video, and data taken from other sites to provide, say, a complete guide to microbreweries in Oregon.
"Mashups are limited only by the imagination," says Danielle Levitas, vice president of consumer and broadband markets at IDC, a technology research firm. "You can bring in multiple Web applications, from 3-D graphics to video to voice communications, to create extraordinary Internet experiences."
These virtual amalgams are simple to concoct. Mashups, which take their name from the sampling phenomenon in the music industry, rely on established Web resources such as POX (plain old XML) and scripting languages to deliver information in innovative ways. Such ease of use may explain why analysts see a big take-up in corporate applications. "Previously, you'd have to hire a production company," says Levitas. "But with a mashup, you can do it yourself easily and inexpensively."
The first mashup, Housingmaps.com, combined Google maps with Craigslist to create real-estate listings with driving directions. But in the nearly two years since that site was created, mashups have gotten more creative. Realtors, for instance, can take an online map and add virtual pushpins to it. A customer can click on a pushpin and see a video of a house, then use embedded Internet phone service to talk to the agent selling it.
This multimedia potential also makes mashups ideal for things like human-resource portals or training programs. "It's the biggest thing coming from the consumer side of the Web into the enterprise environment," says Smith. "Each day I hear of some new trend using composite applications that merge things from different Websites, right at the desktop."
Social-networking sites may soon enter the mash. Virtual communities such as MySpace and Friendster started out modestly but are now an integral part of teen life. Initially, business managers saw little use for these cyber meeting places. That's changing. "People flocked to MySpace and Friendster to share what they considered the best movies or the hottest celebrities," says Levitas. "Now companies are realizing that social networking can be a forum for sharing best practices."
Jupiter's Evans says the technology also offers a way for managers to find their next job or obtain market intelligence, augmenting their ability to succeed in their current job. In fact, a number of social-networking sites, including LinkedIn, specialize in connecting corporate managers. Evans herself is linked in to several of the sites. "People who have read a report I've written will Google me, find my E-mail, and often ask me to be part of their network of regular contacts," she notes.
Who knows? Maybe you'll be meeting your next employer at the Website Second Life.
Russ Banham is a contributing editor at CFO.