Digital R-Evolution: The net 4.0 Era

Date originally published: December, 29, 2015
Published: LinkedIn Pulse
Link to the original post: https://www.linkedin.com/pulse/digital-r-evolution-net-40-era-andreas-jaffke

Authors note: I updated the stats at the end of the article.

The leader facebook moved from last year 1.550 to now 1.712 million users!
Instagram jumped from 400 million users to 500 million users (+25%) in just one year.

Introduction

I hate creating confusion using new terms. So why am I introducing the buzz word "net 4.0 Era"?

The truth is, in order to make it easier to describe and understand how the use of Internet technology of companies and the society has evolved and changed since its inception back in the early 90's.

In order to understand the net 4.0 Era, I suggest to look back on the predecessors that were the PC Era, Web 1.0, 2.0 and 3.0 Era's.


The web 1.0 Era

Together with my university colleagues Eckhard Biehl, Jochem Kranz and Ralf Heid we co-founded back in 1996 one of the first 100% Web Agencies in Germany, ICTeam. The company still exists today and will celebrate its 20 anniversary next year. The company transformed over the years into a Content Management Software manufacturer and IT service provider.

What we initially did back in 1996 was calling the companies of that rather poor, agricultural region of Trier to offer very basic Internet and Web services. There were only a few larger corporations such as Bitburger beer brewery  - today Germany's number 1 draft beer -  a large manufacturing unit of Reynolds Tobacco and many SME's.

Trier is the oldest city of Germany and please alow me to proudly say one of the most beautiful ones, full of roman monuments as well as many buildings in good shape and visitable from the middle ages. It is the region of the excellent white "Riesling" wine embedded in the beautiful valley of the river Mosel. Many don't know that Karl Marx was born in Trier too.

Porta Nigra - Trier

So most of our potential clients were SME's and it was difficult to find someone willing to invest in a simple static corporate Website being Internet still in its very inception. At that time we were not smart enough to look abroad to the very close financial centre of Luxembourg a much more interesting, innovative and dynamic market just half an hour drive from our offices but "abroad" where the official language is French and Luxembourgian.

Those days we offered simple static websites to our customers and told them that the website with some product and service information plus an email address and a "Contact us" form would be their extensive, full coloured and interactive new online business card and product catalogue. The highlight was adding an interactive guestbook which was a basic forum. We offered even the webhosting in packages and SEO.

Altavista Searchengine

 That was the Web 1.0 Era, where the Internet was used for email communication and basic marketing such as product and service information, company news and a simple text form to contact with the companies. Altavista was the number 1 search engine those days and Google had to wait another 2 years to be invented by Larry Page and  Sergey Brin. [Back in 2008 I published a presentation on slideshare about Google's 10 year anniversary and the things to come.]

The Web 2.0 Era

Then in the late nineties the first dynamic Websites appeared and the customers wanted to update their content on their own and without the need of HTML programming skills. The first blogs and blog service providers emerge, Content Management Systems are sold to the larger corporations and Intranets and Extranets are popping up in all large organizations.

Our early and innovative customers such as the German Wine Institute wanted to offer a forum and a guest book to make the engagement with the wine fans more interactive.

Webistes became more interactive, content was updated dynamically and the customers, fans and users are getting more involved and are more listened to.

Welcome to the Web 2.0 era where companies develop their online engagement and online presence still 100% around their Websites, now more dynamic and more interactive both for employees (Intranets), partners and clients (Extranets) and prospects (Website + SEO).

Then, after the Internet or "dotcom" bubble created during the late 90's finally bursts in 2001, the Internet, the World Wide Web and the underlying technology further evolves and new companies are created.

The Web 3.0 Era

The collapse of the bubble took place during 1999–2001. Some companies, such as pets.com, failed completely. Others lost a large portion of their market capitalization but remained stable and profitable, e.g., Cisco, whose stock declined by 86%. Some later recovered and surpassed their dot-com-bubble peaks, e.g., eBay.com, Amazon.com whose stock went from 107 to 7 dollars per share, but a decade later exceeded 500.
This shake out takes us to the Web 3.0 era, the Social Network era.

Social networks are from a technological point of view Intranets as they require registration and authentication providing a username and password in order to be able to get the full [social] functionality.
What makes them different from a blog, forum and a guestbook? Well bascially five things:

1. They are not anonymous: Registration and authentication is required.
2. Total Democracy of Information: Every user is able to act like a broadcaster, a TV or Radio Station: Anyone can reach any user with his post, image, video or audio in seconds.
3. All kind of rich content (Text, images, audio and Video) can be shared with other users.
4. Content is "Liked" and groups and company/product pages can be created by the users > Snowball or viral effect.
5. They work with notifications and include today messaging and instant messaging capacities > Instant communication.
   
6. 
   

In a blog, guestbook or forum your contribution is rather limited to the contribution of text (Posts and comments), maybe images and links and opening new threads. No sharing, no viral effect and no instant communication.

The first movers in the Social Networks space and todays leaders in different segments - here in chronological order - were:

AOL Instant Messenger and SixDegrees.com launched in 1997. Instant messaging was born, giving users the freedom to chat with friends, and create a profile. AOL was probably the true precursor to today’s social networking sites. The member profiles allowed its users to write a biography and share details about themselves. The profiles were searchable so people could look your profile up. It was the most innovative feature at that time. Six Degrees was launched in 1997 and was the first modern social network. It allowed users to create a profile and to become friends with other users. While the site is no longer functional, at one time it was actually quite popular and had around a million members at its peak.

Other sites followed suit, creating social networking sites such as Classmates, Friendzy, Hi-5, Bebo, Orkut just to name a few.

LinkedIn, was launched on May 5, 2003 by Reid Hoffman: Biggest Social Network for professionals. Expexted to have 400 million registered users by the end of 2015.

facebook was founded February 4th 2004, when Mark Zuckerberg with his Harvard College roommates and fellow students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes launched their first Website. Biggest friends&family Social Network in the world attracting more and more companies to build their company pages inside Facebook.

Twitter was created in March 2006 by Jack Dorsey, Evan Williams, Biz Stone and Noah Glass and launched by July 2006.

Google+ got late to the party. Launched in June 2011 Google+ could not really convince the users that were already using other Social Networks.

But that was only the beginning of the Social Networks and as the use of smartphones and tablets evolved thanks to the launch of apple's first iPhone announced January 7th 2007 by Steve Jobs and the Android OS launched by Google a year later September 23 2008, new pure mobile social networks were created.
Apple then launched the iPad in April 2010. Hundreds of different tablets with Android OS have entered since then a very competitive and fast growing smartphone and tablets market.

Video: Steve Jobs presenting the first iPhone

The net 4.0 Era

Millions of mobile Apps and thousands of new cloud based Software as a Service (SaaS) providers have revolutionized since then the entire software market, the social networks ecosystem, the economy and society as a whole.

This new App driven world and economy also pushed the emerging cloud business transforming and disrupting the software manufacturing industry as their business models have to quickly transition from perpetual licenses over to subscription based Software as a Service ( SaaS), Platform as a Service (PaaS) and Infrastruture as a Service (IaaS) models.

This means a temporary cut of revenue streams for the big traditional software firms. December 16th 2015 for instance we could witness this impact in the FY 2016 Q2 results of Oracle. Total Revenues were $9.0 billion, down 6% in U.S. dollars and unchanged in constant currency. Cloud plus On-Premise Software Revenues were $7.0 billion, down 4% in U.S. dollars and up 2% in constant currency.

Incumbents IBM, Microsoft, Oracle, and SAP have ruled the Gartner Magic Quadrant for operational database management systems for years. But with the rise of open source and cloud, new competition has gained ground.

A new batch of companies has made its way into the Leadership quadrant of this Gartner report this year. Among the contenders are companies like AWS, DataStax, and MongoDB.  In a nutshell, the market is changing to encompass new kinds of players. That means more organizations will be moving to NoSQL technologies for particular use-cases and will be embracing open source solutions.

Source: www.informationweek.com

But it is in the applications and solutions market where thousands of small, fast and high quality cloud software providers entered the market place and are entering the software market while I am writing this post such as Salesforce.com, Servicenow.com, Buffer.com, Billin.com - to name just a few - taking away marketshare from the traditional software makers such as IBM, Microsoft and Oracle and beeing incredibly competitive in price and quality.

This is a major shift and has only begun.

As Klaus Schwab, Founder and Executive Chairman of the World Economic Forum put it:

Welcome to the digital age, the age of disruption of the economy as we know it!

Only facebook can be found in the Top 5 of most used Social Networks in November 2015. Mobile messaging platforms that allow instant messaging and instant sharing of rich media are en vogue. We can find WhatsApp, QQ (Tencent QQ, popularly known as QQ, is an instant messaging software service developed by Chinese company Tencent Holdings Limited; QZone is a Chinese Social Network and WeChat an instant messaging platform also created by Tencent Holdings) , and facebook messenger in the top 5. The three together count for an amount of 2.5 billion active users!

The Chinese Tencent Holding Limited alone ( QQ, QZone and WeChat) sums more active users than facebook: 2.16 billion!

Instagram - the example of the small, young and fast fish - only founded in October 2010 as a free Mobile App, outperforms with 400 million active users the 316 million of Twitter; and Snapchat - launched in July 2011 - reached already 200 million active users. Pinterest has with 100 million active users already more active users than LinkedIn with 97 million.

Note: Chinese Social Networks and messaging platforms are: QQ, QZone, WeChat, Baidu Tieba (Baidu.com), Sina Weibo (Weibo.com), YY (Major Chinese video-based social network). BBM is Blackberry Messenger.

Source: www.statista.com

Things are changing in our world that is becoming more and more software and mobile device driven where real time context and communication seems to add the value to the connected world.
It is a connected world of billions of people and things and even the World Wide Web is under a deep transformation. Websites are visited less and less.

Corporate news are published on Industry specific news Apps, Social Network page profile updates (LinkedIn, facebook, Google+) that are already optimized for consumption on any device and for Search Engines.

Products and services are sold on online "Buy from any device" superstores such as amazon, alibaba, eBay and many others to come.

Here a nice image that illustrates the Internet evolution from 1.0 to what i call the net 4.0 era.

Looking forward to your comments and guesses about "what's next"!

My guess: All the big boys are in big trouble - The digital revolution is THE game changer giving birth to thousands of small, fast and competitive "fish".

At full speed, at full power.

And it is just beginning.

It is probably one of the biggest threats and one of the biggest opportunities at the same time.
You decide!

I wish you and your beloved ones a great Thanksgiving and weekend loaded with fun and energy!

Andreas