ODF and Web 2.0

Question: How is ODF like Web 2.0?

Answer: ODF (Open Document Format) represents the next battleground in corporate computing. If you have paid any attention to Tim O’Reilly’s discussion of the characteristics of Web 2.0, you’ll see that he characterizes the next mode of competition moving from control of software to control of data (see here for his discussion about the control of data, which he describes as the next “Intel Inside”).

Much to Microsoft’s chagrin, it’s obvious that a significant part of the potential customer base is refusing to be locked in at the product level — thus the interest in the Linux desktop and OpenOffice.

However, Microsoft realizes (as do most forward-looking observers of technology trends), the application is only relevant as a way to create, store, and manipulate data. And that data is, increasingly, becoming something well beyond a self-contained document.

Data is now becoming a separate entity that is acted upon in a variety of ways: on my laptop in a spreadsheet, by my ERP system as it processes transactions, as an externally accessed customer portal, served up as an SOA payload, etc. In other words, data is increasingly becoming the central aspect of a company’s operation, with the different systems merely being windows through which to view the data. The key to accomplish this, is, of course, putting the data into a format accessible by any system. The solution fastened upon by the entire industry is XML, which makes data easy to slice and dice.

Data is the new “Intel Inside,” according to O’Reilly, because it puts a company like Google or Amazon which can control the data and access to it in a position to charge outside “rents” (in economic terms) to use the data. “Intel Inside” was, of course, Intel’s brand exercise that allowed it to reap enormous margins for the CPUs hidden inside someone else’s product.

Of course, corporate data is owned by individual companies, not a central entity like Google or Amazon, so the Web 2.0 analogy is misplaced — or is it?

While corporate data is placed among thousands of different organizations, each with its own pot of information, it’s obvious that defining the format that each of those organizations is critical, because the format dictates how applications may access the data. And here is how ODF and Web 2.0

intersect.

Simply put, the format of the data will dictate what applications can access it. If the data format is standardized and defined so anyone can access it, there can be choice in applications. If the data format is proprietary, the choice in applications is limited.

This is where Microsoft’s genius is manifest. Rather than trying to carry the fight as “you must buy our app,” it has carried it to “we’ve created a document standard and customers should demand that,” leaving out the fact that its document format is defined such that only Microsoft can really understand its innards (for an extensive discussion of this, listen to this podcast by Gary Edwards, President of the Open Document Foundation).

In other words, Microsoft’s position now is that the critical thing is for customers to use the “best” (i.e., the Microsoft-promulgated standard document format) and demand apps that best support that “best” document format. Put another way, by Microsoft encouraging its customers to standardize on its document format, it creates a Web 2.0 data lockin. It’s a reinforcing circle (virtuous or coercive, depending upon your perspective): the data causes you to choose the apps, and the apps cause you to standardize on the data format, and so on.

As Edwards points out, the choice of document formats is a 15-year decision, because, with the trend to infrastructure being driven by data sharing, choosing a format that favors one vendor will inevitably have ripple effects into the rest of the infrastructure — and, as we know, these are long-lasting (one might be tempted to say, infinite) decisions.

For an example of the alternative to being locked into a format, we can look at O’Reilly’s  metaphor for data lockin: Intel Inside. It’s true that for years Intel dominated the processor market and grew rich on its de facto monopoly position.

However, the past few years there has been a strong competitor in the form of AMD. The two have been locked in a bitter market share battle, with both suffering financially.

Most of the industry press has focused on the two combatants: who’s up, who’s down, the financial woes, the layoffs, etc., etc. Ignored has been the winner in all this marketplace carnage: the consumer. Computers have gotten dirt cheap due to the processor war, and every company except two has been the

beneficiary of it.

I can’t think of a clearer example of why it’s in consumer interest that a widely available standard that can be implemented by anyone be settled upon.

And, by the way, it’s not clear to me that we (the US, that is) really has a choice in the matter. Despite Microsoft’s so-far successful efforts to beat back the governmental move to ODF (see this YouTube video for an example), it’s unlikely to be successful in an effort to impose its document format on other governments around the world. For cost and sovereignty reasons, they are much more likely to demand ODF. The US will end up an island of OOXML (Microsoft’s format) surrounded by an ocean of ODF. The (virtuous or coercive) circle then becomes a handicap rather than a strength, and the US will end up resembling one of those IT shops that clung to their VAXs long past their sell-by date: hopelessly isolated and uncompetitive.