I recently received a complementary copy of the book, “Software is Free, Service is Not: The Dawn of Service Networks” written by ex-Oracle executives and co-founders of OpenWater – Mike Rocha and Tim Chou. The authors make the argument that most proprietary software used by businesses today is already paid for, and that the open source movement reflects the reality that software is (relatively) free. So, most of the value added by software vendors is in providing service for the software. However, the service business is treated as a poorly run cash cow rather than the core of the business as it should be. The authors drive a lot of their arguments from their experience at Oracle where Tim claims growing the advanced services business by a whopping 61% from 2000 to 2004 while other lines of business shrunk or stayed flat.
The business problem that Tim and Mike set out to solve is as follows: Businesses are spending $2.7 Trillion (yes with a t) per year to support software. And the authors have figured out a way to substantially lower these costs while dramatically improving the service.
The core thesis of the book is that support is run poorly today due to fragmentation of information and people. They envision a world where software support would be as easy to use as consumer oriented services like Google, Ebay and Amazon. The technological breakthrough that they plan to leverage for defragmenting people and information to provide this new level of service is semantic web. The contention is that although semantic web has had limited success in the broader internet, by confining the problem space to software support it would be possible to tag (add metadata to) the existing information currently trapped inside vendor portals, community forums, etc. and then be able to run sophisticated queries that return meaningful results.
The other aspect of the new service networks would be to leverage social computing – think MySpace meets Dell dude (support guy). In addition to tagging the knowledge base, the service network would create comprehensive profile of individuals in the service network. The idea being that you shouldn’t have to go through layers of people to get to that one person that already knows the answer to the question.
In all, the book makes for a very compelling read and I recommend you obtain a (complementary) copy by going to their site. The vision of the future they paint seems highly desirable and plausible in not so distant future. The question is how soon can we get there – the challenges are rather significant and I am not sure (semantic) technology can overcome some of these barriers. Here is a few:
- Lack of incentives for some players: It is not clear what incentive software vendors have in plugging into this new service network. The valuable service that ISVs provide and revenues generated from this source would incent them to improve their service but not necessarily plug into an uber network.
- Dependency on semantic tagging: I am always skeptical of businesses that require the world out there to be tagged. I do agree with them that this problem is somewhat simplified from the technology perspective due to domain-specific nature. I personally think that they could also leverage a service like the Amazon Mechanical Turk to get human beings to tag what machines cannot.
- Competing with free: From where I sit, there are two kinds of customers – one that want a single throat to choke, global, around the clock support and are willing to pay for it; and the other that wants free software, is willing to spend time putting it all together and relies on free support (in terms of dollars spent directly) by accessing help forums and search engines. The service network envisioned by Mike Rocha and Tim Chou may end up competing with free rather than enterprise support by established vendors. Yes, that market is probably big (even bigger) but it is hard to compete with free.
All in all- the book makes for a fascinating read and even if you don’t believe in a new era of service networks, the facts and anecdotes shared by the authors and their insight into the software and support businesses is worth a read.
The authors have formed a startup(OpenWater) to bring their vision to reality. The fact that they are willing to put their money (or convince someone else of putting their money) where the mouth is makes this an even more interesting book to read. Its not just a theory – we will find out over next few years how right or wrong they are.
What do you think about the upcoming revolution in support? Is it plain old outsourcing with a web2.0 pitch? Is semantic web for real?
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