A couple of weeks, ago, Geoff Livingston wrote a post called “What Will You Do When Social Media Isn’t Special Anymore?” While I agree with part of his premise (that social media won’t remain the shiny new object forever), the other part (that traditional agencies will soak up the social media work) is simply wrong. Here’s why:

Historically, specialists stick around

Geoff argues that once the PR, advertising and interactive agencies figure this all out, they’ll take the work back. This should be true, but it never is.

• 1996: “Once advertising agencies figure out HTML, they’ll do all the web development. These interactive agencies will be absorbed.” Should’ve been true. Wasn’t.
• 2000: “Once the interactive agencies figure out the tricks of SEO, specialists in search engine optimization will go away.” Again, didn’t happen.
• Today: “Once the PR people, or the ad people, or the digital people, or maybe the SEO people, figure out this social stuff…”  Not going to happen.

In fact, it never happens.

Big brands that are already utilizing social media agencies include Ford, Microsoft, Intel, SAP, Citibank, Coke.  The list goes on. These folks have access to all types of large, talented agencies, but they see a need for specialists—for some of what they do.

Divergence is the most powerful force in the universe

In their outstanding 2004 book, “The Origin of Brands,” Ries and Ries demonstrate how the world gets infinitely more complicated and products, and specialties continue to branch out. The telephone splits into landlines and cell phones. Landlines split into traditional and VOIP. Cell phones split into texting phones, smart phones, flip phones.

And on and on.

Complete article here…

Why the Social Media Genie Isn’t Going Back in the Bottle.

Giving your core product away is certainly an unusual business strategy, yet some succesful software companies are doing exactly that

If you went to your bank manager and said you had a great idea for a business in which you gave away your core product to your competitors, it is likely you would be instantly shown the door and not just because of the credit crunch. Yet this is exactly what some of the most successful companies in the world are doing.

Red Hat, the company which spearheads the development of the Linux operating system, generated revenues of half a billion dollars in the 2008 financial year, the vast proportion of which was profit, while IT company, Sun Microsystems, spent $1 billion in February 2008 to acquire database provider, MySQL.

The common thread is that both Linux and MySQL are open source systems. So what is open source?

The core concept is that software developed in this way can be freely redistributed by others. Open source also guarantees open access to the software’s source code, the lines of programming that make up the application, to enable others to develop and improve it.

This may sound as though the evolution of open source software is a free-for-all, but the truth is far from it. The development of open source technology is usually overseen by some form of governing organisation, which determines the general direction the development takes and which improvements are included in new versions.

This organisation can take the form of a broad community of developers and users, as is the case with the Apache web server, or a dominant single company taking input from other companies and individuals, such as MySQL.

Martin Michlmayr, a former project leader for Debian, an open source operating system, argues: “Open source is not a lawless frontier at all. There are clear license terms that have to be followed, even though open source generally offers more freedoms than proprietary software. It’s true, that many organisations are still struggling to understand open source and its license terms. That’s why Hewlett Packard, together with other partners, started a open source governance community, FOSSBazaar, to share best practices.”

While the open source concept may seem unusual in a business sense, it is far from new, with Red Hat arguing that scientists and mathematicians have shared their discoveries with each other for centuries with the goal of pushing forward the entire pool of knowledge.

It is this culture of openness and transparency that open source supporters say enables applications to be developed far more quickly and at a lower cost than proprietary alternatives. Also, as open source software is freely redistributed, this can lead to a rapid uptake among a user base. Take, for example, the speed at which open source web browsers such as Mozilla Firefox and Google’s Chrome have been eating into Microsoft Internet Explorer’s domination of the sector.

However, it is not just individuals who are downloading and using open source software, businesses are embracing open source too. LinkedIn, the professional social networking website, started using MySQL to handle its database of more than 30 million people around the world last year. At the time, the company’s chief technology officer, Jean-Luc Vaillant, said that the “open and reliable environment” it provides saves the company both “time and money”.

According to John Newton, chief technology officer and co-founder of Alfresco, a provider of open source content management systems used by organisations as diverse as Islington Borough Council, the French Air Force and games maker Electronic Arts, the company’s software has been downloaded more than 1.5 million times. “It is probably the most widely used content management system from an open source perspective. We built the product, people try it and they may pay for it but they may not,” he says.

The company makes its money through providing around 1,000 enterprises with technical support, training or consulting services to develop their own applications using Alfresco as a platform.

Read More….

An open source to a brighter future? – Times Online.