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Richard Davies wrote: The UK has a good crop of technology pioneers in cloud computing - for example ElasticHosts, FlexiScale, Flexiant, OnApp - and also some strong government initiatives such as G-Cloud. We will have to see whether this kind of technical leadership converts into swift mass-market adoption or not.
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New Business Models on the Web
New Business Models on the Web

Growth in Internet commerce continues to fuel an adoption frenzy of Web technologies. The benefits of moving a business to the Web seem clear, but only a few can truly claim that they're building sustainable, long-term businesses.

The most prevalent form of money making on the Web seems to be online advertising. Any company with a site and an audience is selling online eyeballs, mostly through the online advertising networks. Even small sites with little traffic rely on online ads with click-bartering networks such as the LinkExchange.

But the novelty is wearing off. Even with the growth of Internet traffic and e-commerce, online advertisers seem to be reaching an upper limit in paying for eyeballs. Many attribute this to consumers getting tired of banner ads, or click-through rates being on the decline. To many skeptics, this trend is the swan song of online businesses.

On the Horizon
Just as this "decline" in ad-driven models is taking place, we've started to see a variety of money-making instruments available to online businesses. These new models aren't just more of the same. Many, in fact, are driving new ideas in overall business models and opening up entire new economies.

Coined "Affiliate and Syndication Networks," these models (theoretically) enable any Web site to leverage the assets of other sites and create new value. An example of this was pioneered by Amazon.com, which years ago introduced an "affiliate" program. With this program, any site owner could become an online reseller of Amazon.com merchandise. The site owner simply created an affiliate account with Amazon, then pasted content and links on his or her site back to Amazon. If end users clicked through this content and bought a book from Amazon, the site owner got about 20% of the revenue on the sale. It's Business 101: Share revenue and increase volume using a network of resellers.

But the idea expands when one realizes that this model could be at the core of a revolution in how we view the Web. Based on Metcalfe's Law (which states that the value of a network [the Internet] increases exponentially for every n-node added to it), this is the basis for a shift in the development of online businesses.

In this view, every site is a potential asset for your site. Instead of viewing the Web as islands of content linked only on the surface, this view sees the Web as an interconnected network of value, with subsurface-level links between every site. In short, it's a new economy built from the Web.

The Next Level
Taking your Web business to the next level requires Web syndication and affiliate networks. Getting there requires introspection on what aspects of your business support this model. For example, consumers and e-commerce providers have a clear model for exposing content and commerce transactions to site partners. Other examples might include exposing classic customer leads and contact info to exclusive partners via an extranet that uses an XML interface for sharing data. If your company has a technical product, perhaps the answer is providing an interface to your knowledge base and customer support databases for external companies that support your product.

Once you've figured out what assets you want to exchange and expose, getting there is simple. As I discussed in my first CFDJ column (Vol. 1, Issue 1), the Web Distributed Data Exchange (WDDX) provides a fantastic facility for exchanging data with other Web applications. If you aren't familiar with WDDX, go to www.WDDX.org and download the WDDX SDK (available for NT and UNIX).

Building an SDK
Once you've absorbed the basic mechanics of WDDX, you're on your way to building a custom SDK for your site. In this model you provide your site affiliates with a custom Software Development Kit (SDK) for remotely accessing services and data from your site. Imagine this as the "Amazon SDK": a set of custom scripts for remotely integrating the Amazon.com back-end into your custom front-end site.

Developers will expect their partners to provide out-of-the-box libraries for accessing Web applications and data. Custom SDKs will become the norm for doing this.

The 10 Steps
1. Learn to use the WDDX SDK. This is key, as it provides a common way to expose data assets of your site to other sites.
2. Investigate your own site. Explore your application and determine the points of entry other sites might want to use. For example, in a commerce site, the browse-and-search interfaces for catalogs are a logical place to start. Syndication also works for the traditional order form.
3. Create an "affiliate tracking system." Simply, you need a way to generate an ID that a remote site can use to identify itself when remotely interacting with your site. This ID should be used to track affiliate activity. Using this data, it's easy to see who your successful affiliates are, track any revenue-sharing implications and build activity profiles.
4. Add a WDDX API to your site. In many cases this is as simple as adding conditional logic to your existing applications. For instance, in a catalog application, if the affiliate ID has been passed into the page on the URL, you'd know that it's a remote application requesting data. You'd then grab the incoming WDDX packet and deserialize it into local CF variables. From this you could determine what products they're interested in and execute the relevant CFQUERY. Instead of returning an HTML page, you'd return a WDDX packet containing the Recordset for the remote application's consumption.

5. Build script wrappers of your WDDX API. You'll want your site's SDK to be easy to use. To do this, give your site partners simple components that are easily used in any environment. Since WDDX supports virtually every Web application environment, this should be easy. First pick your platforms. I'd suggest starting with Perl, ColdFusion and ASP. Technically, you'd build custom components in each environment, which in turn would wrap the WDDX interaction with your site. The components are your site's "API."
6. Document your site's API. Like any good product, your site's SDK needs to be usable, and the key to usability is user education. Document your APIs in an HTML format.
7. Package it all up. Your affiliates should simply grab a single package of scripts from your site, drop them on their servers and be off. To do this you'll need to package up the components of the WDDX SDK with your SDK. Your site partners shouldn't have to learn anything about WDDX or the WDDX SDK, but instead get your branded package of scripts. The good news is that the WDDX SDK and all its components are all freeware and open source code. You can take these and do whatever you want-even distribute them with your own commercial product!
8. Let people know. Once you've got an SDK running, put an icon on your site letting people know that if they want to be affiliate partners, you've got a whole program and SDK available for use.
9. Let us know. We're excited about all the WDDX projects happening out there, and we want to know about yours. Let us know at projects@wddx.org.
10. Have fun reinventing the world. Not only are we all in this to reinvent our businesses, but we've all got broader ambitions, no doubt!

About Jeremy Allaire
Jeremy Allaire is one of the key people behind ColdFusion. He was one of the co-founders of Allaire Corp, which was later sold to Macromedia, where he joined as the CTO and turned his attention to helping evolve Macromedia Flash into a next-generation rich client platform. He is a regular author and analyst of Internet technologies.

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