Social Enterprise optimize

The impact of Facebook's IPO on enterprise computing

Patrick Gray talks about what impact Facebook’s IPO may have for enterprise computing and the larger world of social networking and computing in general.

The breathless anticipation and astronomical speculations on valuations are finally drawing to a close as social networking darling Facebook nears its IPO. I'm a notoriously bad investor - otherwise I'd be on an island sipping an umbrella drink rather than writing this column - so I'll spare you any investment advice, and instead focus on what impact Facebook's IPO may have for enterprise computing and the larger world of social networking and computing in general.

Facebook 101

If you haven't logged into Facebook or peered over a Facebook-crazed child's or significant other's shoulder while they stalked high-school flames or posted status updates, you're missing what's becoming the de facto standard in social networking. While I see Facebook as a massive potential time suck, it's worth investigating for nothing more than having a working understanding of the technology. If you refuse to conduct your own investigation, Facebook essentially allows users to create a profile with a limited biography and photograph, and then add status updates. The "magic" of the site from a user perspective is that you can keep tabs on a multitude of friends without personal contact, and can catch up with long-lost friends and acquaintances. While some might conclude that someone you haven't personally interacted with in three decades no longer meets that standard of "friend," I confess I've spent several passing moments "stalking" grade-school crushes who fended off my awkward advances.

From a marketer's perspective, Facebook represents the ultimate customer segregation tool. Users self-classify their interests in everything from musical taste to hobbies, and places they've visited. I've received targeted ads ranging from remote fly fishing tours to favorite early '90s hip-hop stars reunion tours based on data I had disgorged to the service at some point. Privacy concerns and cultural conventions remain Facebook's key obstacle to blatant commercial exploitation of users' data, but the implications of billions of potential customers, all possible to categorize into any of a million different market segments, is enough to make a marketer drool and a potential investor trip over themselves to get in on the IPO.

What does this mean for enterprise computing?

Social networking tools are already invading the enterprise, and for seemingly good reason. The Facebook generation is used to these tools, and it's easy to see the benefit of rapid information sharing and potential collaboration. Internal Facebook and twitter-like tools already exist, with the promise that I might post a status update about a project or customer and receive a response from a previously-unknown party who has helpful insights or information. Facebook's original platform was little more than a photographic directory for ivy-league college students, and it's not much of a stretch to envision a "corporate directory on steroids" with Facebook-like technology.

On one hand, Facebook hasn't made many overtures to the enterprise computing space, and its primary revenue model is based on building an advertising and marketing platform rather than a software product. On the other hand, shareholders have a funny way of demanding revenue streams, so it's premature to rule out a Facebook for companies, but I would consider this a fairly remote possibility.

Where Facebook most deeply impacts enterprise computing is that it has changed the way workers interact. Well-connected executives of past decades could pick up the phone and work through a mental Rolodex of internal contacts, eventually pinpointing someone with the information they need. The next generation accomplishes the same outcome, but the tools are different. That shiny phone on a twenty-something's desk is a foreign tool, and unless you provide an effective replacement you'll likely reduce their effectiveness. I believe much of the "generation gap" puffery is overblown, but I do believe that you need to provide the tools to make your workforce operate most effectively, and not understanding social networking will handicap your company in this regard.

Facebook and the grand scheme of things

From the perspective of the Facebook IPO's larger impact on computing, one of the most interesting questions I see it answering is whether the service or the platform is key to social networking. Former powerhouse MySpace is now effectively irrelevant, yet Google+ continues to struggle despite the backing of the Mountain View behemoth. There are still unanswered questions on how Facebook will generate revenue and continue to innovate, and performing these tasks as a publicly traded company will presumably answer some of those questions.

Facebook's IPO also represents a maturing of the social networking sector. In the dot-com days we were told of the demise of all things "bricks and mortar," but eventually arrived at a time when Amazon.com could be an industry-changing powerhouse alongside stalwarts like Wal-Mart and Costco. In some ways, the Facebook IPO will be a vote of confidence in the sector and the maturing of social media into a viable and mature product.

About

Patrick Gray works for a global Fortune 500 consulting and IT services company, and is the author of Breakthrough IT: Supercharging Organizational Value through Technology, as well as the companion e-book The Breakthrough CIO's Companion. Patrick has...

2 comments
jdm12
jdm12

First, Patrick, I didn't see any reference to Linkedin, in your argument. That seemed odd. Second, I didn't read any discussion of social network tools as a method of discover for information about potential hires. Some organizations place high value on a person's social network information when they seek new employees. (Think about the film and TV industries, for example, and I would imagine the tech industry as well.) With "culture" becoming a much more important factor in determining whom to hire (think Google, Starbucks), social network sites become a tool for discovery about who might best fit into a company.

BALTHOR
BALTHOR

What your worth.Facebook is worth 75 to 100 billion dollars.Some of these corporations really work hard and they don't come close to that net worth.