Reality bites again!
If wer're going to have 35,000 people at EMC using a social media platform, who's going to pay for it?
Remember: it's licenses, hardware and people.
Now, I'm not arguing that it doesn't need to be paid for.
But how it's paid for is turning into an interesting discussion.
IT Is Now Engaged
Our social media platform has now gone viral. Various execs now talk about the platform at various internal meetings as an example of progressive thinking at EMC.
The writing is now on the wall. There's no debate whatsover that this is going to be a very big environment before long.
At a recent meeting, we got into a discussion about funding models. I didn't like the way the discussion went at the time. I've had some time to think about it, and I now know why this is an important issue.
The IT Proposal
We've got a VP in IT who spends a great deal of time thinking about the economic aspects. As an example, he's locked in extended negotiations with Jive on their product. His reputation is as an extended negotiator, and I think he revels in this identity.
Now, if I was writing in my "other blog" (the one that focuses on IT issues), I'd take exception to this mindset as ultimately missing the point of what IT is all about. But, in this blog, it's simply part of the landscape and not up for debate.
They proposed a per-user charge. Something like $100 per user for anyone who wants to use the social media platform. Mechanically, you'd go to some online system, get a cost center, ask your manager's permission, sign up, and you'd get the privilege of exploring our social media platform.
Now, part of my brain says "gee, this sounds reasonable". But the more I thought about it, the less I liked it.
And, ultimately, I saw this proposal severely hampering the success of social media at EMC.
Social Media Depends On Network Effects
Somewhere someone stated something along the lines that the value of any network is the square of the number of nodes.
10 nodes = 100 units of value.
20 nodes = 400 units of value.
100 nodes = 10,000 units of value.
Even with our limited platform, we're noticing the same effect. The more people join in, the more interactions, and the more value EMC derives from those interactions.
So I would argue that EMC has a legitimate business need to encourage widespread participation. Although the costs of supporting an additional user is roughly linear (actually, cost-per-user declines dramatically with scale), the value is exponential.
So, putting my Official MBA Consultant hat on, the answer is obvious. EMC should make it as easy as possible for users to access the social media platform.
This would mean that we would invest to absolutely minimize the hassle, and also invest to maximally encourage participation.
This implies a centralized funding model. No registration, no manager approvals, no cost centers, etc. Pay for it all at once, and move on.
I think this will be an anathema to our IT VP.
Other Examples
So, I started thinking about other IT services that exhibited roughly the same characteristics.
Email came to mind. EMC wants to make sure that every employee can communicate electronically with every other employee (as well as people outside the company). So every employee gets an email account.
You don't have to fill out a form, ask your manager's approval, get a cost center, etc. You just get an account, and that's that.
As another example, we have an employee content portal (PowerLink) that provides access to authoritative documents for a variety of audiences. Once again, EMC has a legitimate business purpose to ensure that each and every employee can access authoritative content easily and effectively.
You don't go through hoops to get to it. You simply get it since it's a business tool.
Now, To Be Fair
I'm sure that there are many examples of IT services that don't depend on network effects for value. Data warehouses, for example. Or specific applications.
But, after thinking about this for a while, it's clear that "default social media services" for all employees is a network-effect application.
And there are other applications of social media (e.g. external communities) where different funding models could and should be used.
What About Your Funding Model?
Sorry to say, but I wasn't thinking about this issue a few months ago. I had just assumed we'd find a way to figure it out.
Well, it turns out that there are good ways to do this, and bad ways to do this.
And I hope we choose the good way.
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