IBM putting social networking under microscope

NEW YORK--In an announcement sure to raise eyebrows among the companies gathered at the Web 2.0 Expo here, IBM said Wednesday it is opening the IBM Center for Social Software.

So is IBM intent on becoming another social media company? Hardly. Most likely Big Blue intends the new center to be a focal point for developing software tailored to help companies build social networking tools onto the sites. More importantly, the center could help IBM tailor consulting packages from IBM Global Services.

With that in mind, IBM's decision to open the center in Cambridge, Mass., (where the Massachusetts Institute of Technology and Harvard University are based) rather than in Silicon Valley (where most social media companies are based ) makes more sense. In a press release, IBM describes the facility as an incubation center where it can collaborate with both customers and people in academia.

So why's this interesting? Many companies here on the exhibit floor at the Jacob Javits Center aren't social media companies. Instead, they're trying to sell software, hosting, and consulting services to social media companies and to traditional technology buyers like auto makers that are trying to add communities and other "social" tools to their Web sites.

IBM became a dominant supplier of software for Web 1.0 sites (both e-commerce and publishing) by following a similar model: It started into the market with rudimentary e-commerce and application server software packaged with IBM Global Services consulting contracts.

Smaller competitors such as the long-since-departed software maker Open Market scoffed at the IBM offering, noting that is was little more than a developer's tool kit that IBM used as a come-on to sell its consulting. They had a point, but IBM won that competition anyway.

Can IBM do the same to the nascent market for social-networking software? Few of the companies here at the Web 2.0 can afford to ignore that possibility.

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[AlterEgoist]

My company offers consulting services for evaluating and running social networking sites. We have launched highly successful sites for several Fortune 50 companies.

We have found that most large companies are resistant to allowing open and public conversations about product information which was previously tightly controlled by the corporation.

It is a difficult transition for most large companies to embrace Web 2.0+ customer dialog, but essential for success in the new world of social media.

I would love to hear of your experiences and thoughts -- I can be reached at [e-mail].

[mckenziesa]

You are definitely correct about large companies (particularly private label brands) having difficulty with the transition. I am a consultant in the e-commerce industry, and while a number of large retailers have embraced the concept of openness and dialogue and are seeing the benefits, most would admit that they have a long way to go. I recently posted a piece on private label brands being resistant to putting ratings and reviews on their sites (which is usually a "first step") in embracing social applications. A few are starting to take the step, which I suspect will cause the others to follow. You can read it here:
http://ecommerceconsulting.com