Ebay and Amazon.com are network level applications. What defines them as network level applications is that they raise to the level of a platform fundamental processes, data pools and transaction information that previously existed at a local user or store level. In doing so they achieve radical economies of scale which is made available to all comers. Their benefit in doing so is to create a market place from which they receive transaction fees and charges across a huge network. Participants (vendors) benefit because they get access to state of the art applications, databases and the marketplace itself for a fraction of the cost of developing these assets themselves.
Ebay and Amazon are the most obvious network level players but others are becoming increasingly prevalent and increasingly have at their core a set of integrated web service applications. Google, for example is known mostly as a search platform; however, they are investing in many types of applications from calendar functions, to spreadsheets, to blog software that in effect creates a potential network level desktop. It is entirely possible in the Google environment to become completely untethered from your traditional 'physical' desktop and increasingly this will be the way people work. As a consequence of the developing Google network we will benefit from more integration of communication - calendars, email, blogging, - between users. Who knows the level of integration that may result once browser type, hardware, productivity application don't matter.
The beauty of the Network level application is that it can function as a component of work flow or as the work flow itself. The applications are built to standard specifications and are interchangeable, upgradeable and reusable. Web services applications are the most common facility by which modular component software applications are brought together to produce a work flow application. By definition, these web service applications are not tied to any specific operating system or programming language.
Amazon.com has aggressively promoted (and was an early adopter) of web services. Most online booksellers would face much higher monthly operating expenses and would also not have access to other seller tools (comparative pricing, availability information, etc.) were it not for Amazons web services. Simple cover art is available to all online retailers via the Amazon web services widget. It would be difficult and time consuming for a small book retailer to scan and upload cover art and the fact that this and many other functions have been removed from the local store level to the network is an example of a network effect. Anyone who has sold on Ebay over the past ten years will recognize how the process gets easier and easier as Ebay has added content, applications and services that the average garage sale seller could never develop by themselves. As Amazon has done, they to have developed web services applications that others can use on their own auction or retail sales sites.
The Network effect is coming to the library, publisher and bookseller market. (There is still some opportunity in book selling despite Amazon). It is interesting to think further about the Network effect on publishing but I think that we are seeing the first stages of a radical change in publishing with the development of self-publishing houses (AuthorHouse, Lulu, iUniverse), publishing applications (Blurb, Picaboo) and blogging tools (wetpaint, Wordpress, Blogger) all of which represent a very different way of publishing. I think it is the beginning of the death of publishing as we know it but by no means the death of publishing.
Similarly, in the library community software vendors sell expensive software implementations for local catalogs (OPAC) which are proprietary and often islands of information with only minimal integration with the outside world. More often than not the applications themselves are filled with features and gee wiz stuff that no one needs or uses. Rise up to the network level all of this functionality and the libraries is able select the applications they want as components parts and assemble them as they please. Due to the increasing strength and decreasing cost of communications and bandwidth the library can run the critical tools they need via a set of network level applications. Importantly they do this without a large expensive investment in hardware or software and they get continual access to software development improvements.
It is an interesting time and I think I will think more about the network-level impact on book selling and libraries.
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