Business Week on Amazon/EBay Web Services

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Tim O'Reilly
Dec. 16, 2003 10:57 PM
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Rob Hof's recent article for Business Week, Reinventing Amazon, echoes the themes I've been articulating for the past couple of years, in talks such as Inventing the Future and The Open Source Paradigm Shift. I've talked extensively to Rob on the topic, and it was heartening to see that he got the significance of the trends we've discussed.

I've been arguing that sites like Amazon and EBay are not just web sites, but early examples of a new paradigm that will transform the computer industry as we know it today. We start by looking at them as applications, then as platforms, and ultimately need to think about how they will be integrated into an internet-scale operating system. In this future, many of the principles of open source -- particularly user customizability and distributed collaboration -- will play an enormous role, even in applications that we would not normally think of as open source. But at the same time, the new paradigm challenges open source licenses that are conditioned on the act of software distribution (which is no longer necessary), and that fail to recognize that control over data may be more important than access to source code or control over software APIs

Business Week gets the first point very clearly, that Amazon is not only an application, but well on its way to becoming a platform. Hof says:

"After all, the Amazon.com Web site is already essentially a giant application that people simply use over the Web rather than in their personal computers. And bit by bit, just as its Washington neighbor did two decades ago, Amazon is building what techies from Silicon Valley to Redmond call a platform: a stack of software on which thousands or millions of others can build businesses that in turn will bolster the platform in a self-reinforcing cycle." He also got the spirit of what I've called the architecture of participation. He notes:

Such developments recall the same creative spark that launched the PC industry and, more recently, put the Linux operating system on the map. One program makes it easy to list products for sale on Amazon. Another lets merchants instantly check prices at Amazon via a wireless Web device when they're looking at stock to buy. It's a volunteer army that costs Amazon almost nothing.... It's possible that Amazon has latched onto one of tech's juiciest dynamics -- a self-reinforcing community of supporters. Indeed, it seems to be harnessing the same "viral" nature of the open-source movement that made Linux a contender to Windows. Says Whit Andrews, an analyst at Gartner Inc.: (IT ) "It creates an enormous community of people interested in making Amazon a success." In the end, Business Week is not a technology publication, so it's no surprise that they didn't get to some of my more obscure points, such as the fact that scripting languages such as perl, python and php are so enduringly popular because of the dynamic nature of these "infoware" sites. He also didn't get into my speculations that internet-era killer apps like MapQuest that don't have a participatory component are indefensible -- that user-contributed data is the new source of business lock in. But hey, it's neat to see just how many of the memes I've been identifying made it into this mainstream story!

On a personal note, it's kind of wierd when you see your once far-out ideas appear in a major business publication. I guess it's like sending your kids off to college. You got them to this point, but now it's time to let them find their own way in the world.

And it is a pretty darn satisfying feeling to change the way people think! I still remember the blank incomprehension I got from reporters after the "open source summit" back in early 1998. "What are the most mission critical programs on the internet?" I asked. When I told them about Bind, and Sendmail, and Apache, and Perl, and then, Linux, a distant runner up at the time, they were at first taken aback. But within a few weeks, it was "common knowledge." Now, I see the same thing happening with my fingering of web services as the first step towards a next generation "internet operating system", and data rich "infoware" applications like Amazon and EBay being the next step beyond the shrinkwrapped software applications of the PC era.

Tim O'Reilly is the founder and CEO of O'Reilly Media, Inc., thought by many to be the best computer book publisher in the world, and an activist for open standards. O'Reilly Media also publishes online through the O'Reilly Network and hosts conferences on technology topics, including the O'Reilly Open Source Convention, the O'Reilly Emerging Technology Conference, and the Web 2.0 Conference. Tim's blog, the O'Reilly Radar "watches the alpha geeks" to determine emerging technology trends, and serves as a platform for advocacy about issues of importance to the technical community. For everything Tim, see tim.oreilly.com.

What emergent ideas are you seeing that ought to be fodder for Business Week next year?
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Showing messages 1 through 4 of 4.

We are developing a similar Open Source Platform
2003-12-18 10:20:02 pelle [Reply | View]

We are currently developing NeuClear an OSS platform for handling all aspects of commerce in a general way.

Our goal is to create a distributed web of commerce services, not just centralized ones like Amazon or Ebay.

Hailstorm
2003-12-17 15:15:32 anonymous2 [Reply | View]

I can't say that this is anything new. Microsoft itself recognized the value of the Internet OS a few years ago with Hailstorm, or .NET My Services. The fact that it didn't fly was a matter of business model and customer reluctance - this won't be the case forever.

Just so people don't think MS has been completely absent from this game, Tim always talks about MapQuest - but Microsoft has a complete (and very powerful) MapPoint API available at www.mappoint.net. It destroys MapQuest.

Hailstorm
2003-12-17 18:23:38 Tim O'Reilly [Reply | View]

You note that I always talk about MapQuest, but you haven't paid attention to what I say when I do. I've been saying for 2-3 years, long before the MapPoint API was introduced, that Microsoft was eventually going to eat MapQuest's lunch, because they were just thinking of themselves as an application, and not making themselves into a platform. It was after hearing one of these speeches, in which I argued that a platform strategy beats an application strategy every time, that Jeff Bezos made the commitment to turn Amazon into a platform. Unfortunately, the folks at AOL/MapQuest were far less receptive.

It's not just having an API, though. It's also having an architecture of participation. Amazon's customers, and EBay's, help to build the application by contributing their own data. Neither MapQuest, maps.yahoo.com (vicinity), nor MapPoint have made this leap. And it's such a powerful and obvious one for mapping/location data. I'm convinced that the player who first does this is going to be the one who wins in the marketplace. I'd bet on Microsoft, but it's not impossible that someone else will get there first.

In short, the API is an important step, but not the end game. In addition, it's important that there be a low entry point to the API. MapPoint's API, last I saw, was too expensive. (I don't actually know the pricing, but when the FAQ says, "sign up for an evaluation account and a salesperson will call you", you know that it's not cheap!) They ought to offer a "free for non-commercial use" license, or one that is free below a certain number of requests (like the Google API), rather than their current "free 45 day trial" model, if they want a lot of experimentation.

Net net, I agree that MapPoint is incredibly important, and the likely winner in this space. But there's still room for something disruptive to take over the market, or for one of the other players to expand their offerings. Until MapPoint starts getting buzz among the geowankers, I won't say they've got a lock on this market.

eBay's not on board yet
2003-12-17 09:35:37 hondo77 [Reply | View]

I wish eBay would learn from Amazon's example and free up their web services instead of charging for them.

Showing messages 1 through 4 of 4.

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