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The IT industry is clearly shifting from a world that revolved primarily around hardware and software products to one defined by an ever-greater range of business and consumer services. By providing a powerful and ubiquitous, but low-cost, network infrastructure, the Internet has become an unprecedented tool for services innovation and transformation. These capabilities are now coalescing into a new phase of Web expansion, popularly referred to as Web 2.0.

In this issue, we look at this topic from a number of different angles. My own piece begins with a broad analysis of which industries are most likely to be disrupted by Web 2.0 and which are more likely to be sustained. This is followed by a major paper from Professor Venkatraman, which looks at Google’s underlying business model and strategy and identifies important ways in which companies can both leverage Google’s position and learn from its success and practices.

We then look at the underlying technology changes through three closely linked discussions of the increasingly layered services market. First, Doug Neal explains the current Web 2.0 phenomenon, showing why the Internet has entered a new phase of pervasiveness and technological sophistication. Howard Smith then argues why, despite many remaining challenges, the ‘software as a service’ approach will succeed where its ASP predecessors did not. Dr. Richard Sykes then shows how this layering of the services industry is driving the search for the human mediation required for sustainable competitive advantage.

The final two papers assess the management implications of these changes. Kirt Mead demonstrates the need for expanded and more sophisticated governance models for assessing the risks and rewards of new technological approaches. He is followed by Olof Pripp, who suggests that as IT organizations become more buyers of services than builders, the skills of the CIO must expand far beyond the technology and project management roots that have been so dominant in the past.

<b>David Moschella</b>
Editor and Global Research Director
dmoschella@csc.com