I guess we have all heard the term ‘Web 2.0’ being used with increasing frequency. Indeed, there are times when I have wondered if it is simply a convenient ‘buzz phrase’ to sound as if someone knows what they are talking about and/or whether it is being used in the correct context. As the least ‘geeky’ member of AT8, I thought it would be worth looking at from my perspective as it is one of those terms that is difficult to define consistently, but many seem to instinctively know what it means. The Life Office Managers Association (LOMA – USA) has been looking at Web 2.0 in insurance and as I read their article, I couldn’t help but check the definition on an archetypical Web 2.0 application itself – Wikipedia. I had personally seen applications that fall into the Web 2.0 category as being ‘participative web/platform applications’. Interestingly, similar terms are being used by others more distinguished than me – perhaps indirectly influencing my own educational osmosis.

So, what does Wikipedia say it is?

‘Web 2.0′ refers to a perceived second generation of web development and design, that facilitates communication, secure information sharing, interoperability, and collaboration on the World Wide Web. Web 2.0 concepts have led to the development and evolution of web-based communities, hosted services, and applications such as social-networking sites, video-sharing sites, wikis, blogs, and folksonomies.

Is the future value of Web 2.0 hype or reality and what should people be doing? Many out there would say that Web 2.0 is simply ‘Social Networking’, but in my opinion, that conclusion would underplay the wider potential and I’m not sure if it is borne out of ignorance or technology snobbery. Sure, it would encompass applications such as Facebook, MySpace and Professional networking sites such as LinkedIn. However, this open, collaborative sharing is being used more widely and with a broader user group. Perhaps the ‘Social Networking’ association has acted as a barrier to some in the industry, but more companies in the US and here in the UK are beginning to take the business applications more seriously. The use of Wikis and blogs as a means of knowledge and communication management is being adopted by more organisations – albeit mainly on intranets for internal use across organisations for the moment. However, this limited exposure to the potential uses could fuel an exponential increase in adoption and may even result in a wider engagement with agents and customers as well as suppliers and partners on a multi-national basis once people start to recognise the power of user-generated content. How often do people in departments, companies and countries ‘reinvent the wheel’ with the associated duplication and costs? Whether it be technical departments, product development, actuarial or underwriting, the ability to collaborate as a wider community in a simple accessible medium must have significant business benefits. In a past life, when merging one Life company with another, my own company had one POS system, whilst the other company had seven… yes, seven! Worse still, they didn’t even realise that was the case until doing the merger due diligence!

Terms like, Cloud, Wikis, Blogs, Social or Professional Networking, Mashups and Twitter will be varyingly understood or misunderstood. Is Web 2.0 the ‘next wave’? Well, companies in our industry should not ignore it. The point I always feel about technology is that it is a ‘means to an end’ rather than an end in itself. It should not be ignored or tainted by unhelpful preconceptions, but it should instead be considered for how it may serve the business and its customers. The ‘what’ and ‘how’ may not be immediately obvious and could involve new ideas and initiatives. However, as a non-geek, Web 2.0 could be like a technological cooperative, where the power of participation gained through engaging empowerment could be enormously beneficial.

Last week we discussed the pros and cons of online solutions and contrasted this to offline solutions. In many cases the online/offline debate has now matured to focus on whether the solution is actually a SaaS solution or not. Many vendors are claiming to have online solutions but this is really only being achieved through the use of Citrix or Terminal Emulation services which miss many of the strategic benefits that SaaS solutions provide. For the purposes of this document, we define SaaS using the Wikipedia definition, namely:

Software as a Service (SaaS, typically pronounced ’sass’) is a model of software deployment whereby a provider licenses an application to customers for use as a service on demand. SaaS software vendors may host the application on their own web-servers or download the application to the consumer device, disabling it after use or after the on-demand contract expires.

Following this definition, a number of key benefits arise from SaaS implementations including:
• No User infrastructure
• No high upfront costs
• Works ‘Out of the box’ – but customisable
• Scalable up and down
• Commercial tie in of vendor to the clients long term needs
• Service is ‘in the cloud’ and can be accessed from anywhere
• Resilience
• Accountability of single vendor
• High Availability
• Manageability
• Portability
• Low cost of ownership
• Ability to expose to a wider user base (e.g. adviser clients, B2C market)
• Ability to mash with third party online applications.

Given the large number of benefits available from a SaaS implementation, AT8 remain surprised that more vendors (especially those with online applications) don’t operate SaaS solutions and have left the likes of IntelliFlo and True Potential to dominate this space.

Software, such as ‘Salesforce Automation Applications’, have, in the past, typically been offline applications due to the need for them to be used remotely. However, such applications struggled to meet the business process requirements of many sales forces in that they failed to share data and business processes between team members, they relied on the sales person to connect at regular periods before a case could be processed and they carried a high maintenance overhead. As a result, online solutions, like Salesforce.com, have become extremely successful and have now rolled out to major institutions across the globe.

However, due to the heavy legislative burden, the UK Financial Services has its own unique characteristics and a belief that ‘generic’ industry applications such as Salesforce would not work. There is still much debate as to whether online solutions will take off in Financial Services, buta quick review of the market shows that most vendors have moved away from the supply of pure offline solutions to either pure online solutions (e.g. IntelliFlo), or more often a hybrid solution, where the client database is online but the advisor can ‘check out’ a client to work on offline.

In studying the uptake of these solutions, it is interesting to note that the main advocate of the online world – IntelliFlo – is also arguably one of the most successful of the current vendors, with clients such as The Money Portal and Thinc having recently signed up to use their solution. Traditionally their success came from the sales of their Back Office system, but this has extended as they have enhanced their Front Office capability, with many of the organisations also using their online sales tools too.

Indeed, despite some detractors, the world appears to be going online with more and more recognising the benefits of a SaaS model.

- Microsoft have stated that the release of Windows after Version 7 (next major update) will be last ‘thick OS’
- Google Chrome is the foundation for a browser-based operating system
- Microsoft Silverlight, Adobe Apollo, AJAX etc, are extending UI and operation on local machine
- What were once desktop-only apps, are migrating online, eg Adobe Photoshop
- The Web 2.0 approach promotes application mashing, which is difficult to achieve with thick apps

In financial services the debate still runs on… and on… with some big offline vendors sticking to their principles and pushing the need for offline working. At the same time, the online vendors dismiss these prospects/clients who call for offline tools as old fashioned. In fairness, the debate is still a valid one and those vendors that offer both options still have a market edge in many cases. The diagram below illustrates the arguments from both sides. Who wins the argument will be decided case-by-case according to business models and cultures within the organizations.