This past April, popular social networking site Ning announced that it would no longer be able to offer its services for free. In an e-mail to his 40-percent-reduced employees, Ning CEO Jason Rosenthal wrote:

Our premium Ning networks like Friends or Enemies, Linkin Park, Shred or Die, Pickens Plan, and tens of thousands of others … drive 75 percent of our monthly U.S. traffic, and those network creators need and will pay for many more services and features from us.”

It shouldn’t be surprising that Rosenthal’s tone was rife with hope. But what if some or even most of Ning’s networks do not opt to pay for previously free services? I personally have been sent emails from soon-to-be-former Ning networks about their plans to move to a different platform rather than pony up.

Dissecting the Ning Decision

Those unfamiliar with Ning might think that the company is the brainchild of a few crazy kids without a great deal of business acumen. Think Chat Roulette. That’s hardly the case. One of the company’s primary visionaries and investors is Marc Andreessen, a man who has made billions from successful technology-based ventures.

Perhaps you’re thinking that Ning never gained any traction? Wrong again. At the time of the announcement, the company’s Alexa rank was 126 and the number of Ning networks in existence was in the hundreds of thousands. Many popular Ning networks had tens of thousands of users, putting the company’s reach easily into the millions. The bottom line is that Ning could not sustain the Freemium model outlined in Chris Anderson’s popular book Free: The Future of a Radical Price.

The History of Freemium and a Possible Domino Effect?

For those of you not familiar with the Freemium model, it boils down to this definition from Wikipedia:

“Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc., then offer premium priced value added services or an enhanced version of your service to your customer base.”

Now, if Ning were one of few companies attempting to grow its business via Freemium, then it could be dismissed as an aberration. It can’t. The model is pervasive. In fact, most firms these days receiving venture capital (VC) funding operate under some type of Freemium model.

Consider the fact that open source (OS) software companies are utilizing Freemium. For example, in April of 2010, OS data solutions company Talend received an additional $8M in VC funding. Talend allows anyone to download its software for free and use many of its bells and whistles. To unlock advanced features, however, clients have to pay.

What if the vast majority of Talend clients decide that 70 percent of a product’s functionality for free trumps all functionality with a bill? Would the Talend business model crumble? Based on what happened to Ning, will VCs ultimately become skeptical of the Freemium model and refuse to fund companies that rely upon it? As David Heinemeier Hansson wrote in a post on 37signals.com, “Eyeballs still don’t pay the bills.”

Feedback

This begs the question: Is the Freemium model ultimately sustainable? Remember that open source does not mean free. As Heather Meeker wrote in my second book about open souce and the nature of free, “Think free speech, not free beer.”

What do you think?

How healthy is your collaborative community? Well, measure it! You will have seen that we have introduced more analytics and activity portlets to omCollab, which you can find on the Home tab.

You can also check out the wiki statistics of MIKE2.0 via the following links:

1. http://mike2.openmethodology.org/wiki/Special:Statistics
2. http://mike2.openmethodology.org/wiki/Special:Statistics?action=raw
3. http://mike2.openmethodology.org/wiki/Special:ContributionScores

Here are also some other resources that might be helpful:

1. http://wikitracer.com – an open source research project to analyse wiki contributions
2. http://www.socialtext.net/open/index.cgi?wiki_analytics – good collection of ideas about wiki analytics

And if you want to know about the mother of all wikis, check this out:
http://stats.wikimedia.org/EN/Sitemap.htm

After months of hard work it’s finally here: omCollab, the Enterprise 2.0 collaboration platform that powers MIKE2.0 and our BearingPoint internal collaboration site. We have packaged up Mediawiki, Wordpress and omBookmarks (a fork of Scuttle) into a single collaboration platform that can be used to host powerful online communities on the web or inside organisations. It’s a comprehensive collaboration platform which combines the following features in one single, integrated platform:

• Wiki
• Blogs
• Social bookmarking
• Social networking
• Mashups
• Search

Please see omCollab Homepage for full details.

We have released omCollab to the open source community because we want to build the world’s most powerful open source Enterprise 2.0 platform. We will continue to invest time and effort to improve omCollab as it powers MIKE2.0, the open source methodology for Enterprise Information Management. We hope that we can get the open source community engaged to help contribute to omCollab.

If you want to know where we are going, what features we are planning to build and maybe offer your help to achieve this, please check out the omCollab roadmap.

Finally, if you just want to check out omCollab for yourself or maybe even power your online community with it, go to the omCollab download and installation page

The last 5 years have seen a rapid advancement in open source software development. The reason it works so well is that open source isn’t just about freely available code, it’s a different approach to developing software to can leverage a huge resource pool of available talent. In some cases, an open source product may be of higher quality than a commercially developed product.

Open Source Information Development
Open source content development is the other area that has exploded. Wikipedia is the best example of collaborative development of content where authors build upon the work of others to release a product that anyone can edit.

What about open source data? We’re starting to see it too. A great example is the OpenStreetMap project, where individuals are “mapping the world” by building a repository of geodata and point of interest overlay in a wiki. OpenStreetMap looks to form a credible competitor to the government geodata providers – with the costly ones in Europe providing a particularly attractive target. Some of the ideas about what it may achieve in the future are even more exciting.

Software Development vs. Information Development
When developing open source code or information there are many similarities. The biggest differences have to do with commit rights and release cycles. Whereas code is released in cycles, wikis tend to have content changing all the time. This provides maximum value in terms of encouraging contributions but results in instability.

The other issue is that of authorization to contribute. In a code model there are typically controls around commit rights and a test process to ensure the code developed matches the planned specification.

To get more open source Information Development, we think a hybrid model makes sense in some scenarios. This is what we’ve done with the open methodology framework in MIKE2.0 in an attempt to add stability and reliability. While there are certainly some downsides, we believe that in some cases it can provide the best model for development.

Where Else Might it Apply?
The best case for the approach seems to be related to the development of standards as a means for effective collaboration. I can imagine a few nightmare scenarios for open source information development related to personal privacy, but by looking at the geodata providers we may see other candidates – such as credit agencies – that will face competition through a variation of the open model.

The authors of this blog have been pretty passionate for some years about Information Management and promoting the benefits of putting information and data at the center of an organizations development processes – Information Development.

To help promote this approach and to promote discussion and debate in the Information Management profession, we were behind an initiative to launch an open approach to Information Management – title MIKE2.0.

During the 1990’s the volume of raw data held by enterprises has grown exponentially.  All of that data had to be put to some use, and it has been both internally and externally.  As a result, non-ledger data has taken on greater and greater importance in the management, oversight and assessment of companies.  Unfortunately, the use of agreed processes and standards for the aggregation, measurement, quality and interpretation of the data has not moved at the same rate with every enterprise free use their own approaches.  In some cases this results in innocent ambiguity while in other cases organizations have taken the opportunity to deliberately mislead their stakeholders.

The complexity of data is not generally well understood.  Most often, it is assumed to be a set of static datasets which can be related to each other in an unambiguous way.  The reality is that data is constantly changing across the enterprise 24 hours a day.  With financial reporting, this constant change is generally well managed with ledger aggregation, group reporting and, most importantly, period-end closing.  By agreeing to specific cut-offs a point of reconciliation stabilizes all of this ongoing change.  Although it is taken for granted, the process followed to stabilise the data are non-trivial.

If non-ledger data is to be trusted to the same extent as financial data, then its complexity needs to be equally well managed in ways which are consistent across the industry.  No one consulting firm and no one financial institution can find the “right” answer unless the approach is much more widely adopted.  For this reason we have not only invested heavily in developing approaches to managing and measuring complex data, but have convinced our employer – BearingPoint – to donate it to the wider profession using a Creative Commons licensing model.

MIKE2.0 is that initiative and is larger than any one group of professionals.  It is managed by a mix of industry professionals across end-user and consulting firms.  It is designed as a multi-lingual collaboration that can link external reporting minimum standards with multiple internal data consolidation processes using a variety of technologies.  MIKE2.0 is one of the initiatives that Information Management professionals looking to shape their industry can embrace, influence and extend.