The Technology Thread

The leaders of the trend will be "digital natives," who pervasively use blogs, podcasting, video and Voice over IP to connect and communicate. In addition, Sondergaard asserted that consumers' boosted processor speed, storage capacity and bandwidth would increasingly challenge corporate IT: "By 2011, companies will deliver Web services to customers for personal application configuration."

Gartner's annual CIO survey shows that some organizations are out of synch with the trend: the #1 priority for CIOs is growth, yet double the number of CIOs left their jobs in 2006 over 2005 due to companies' over-reliance on cost reduction. Moreover, IT budgets are projected to increase only 4% in 2007 and 2008, reflecting a 3% drop from 2006's 7% jump over 2005.

The Business Angle

Gartner didn't discuss what consumers would be communicating with their new technology tools and habits (we did), but by observing consumers' past behavior, it's not too difficult to guess: they will create content and communicate about the things that are important to them, that can connect them to others. The companies that create products and services that consumers can enthusiastically use as threads to weave their (increasingly collective) experience will benefit disproportionately in the Web 2.0 trend.

In other words, products and services must have much more of a "wow factor" to be worth mentioning, and, no, that doesn't mean stamping a different flower pattern into the paper towels (unless select sheets contain URLs that link to an on-line scavenger hunt).

Although it's not obvious to most executives yet, consistently achieving this "wow factor" will require an unimaginable level of innovation to which Industrial Economy companies aren't accustomed. Companies will improve their odds most by collaboratively engaging customers directly and seamlessly to design products and services for themselves (not necessarily mass customization as much as designing products/services for their demographics). This will only work when organizations can deliver what customers come up with, and that means a new level of flexibility and adaptiveness in the back of the house.

In a parting shot to enterprises and CIOs, Gartner Chief of Research Darryl Plummer added, "Any organization that doesn't contribute to growth is expendable. If you don't start your change initiatives today, you may not have another chance."