Saturday, June 25, 2005

"Apps on top of apps on top of apps": small pieces loosely joined

From the pages of Business 2.0

Fred Wilson was a VS at Flatiron Partners during the bubble. He has recently started Union Square Ventures after asking the hard question, "Is profitable VC investment in technology innovation dead?"

His answer: "The reality is that core technology investing- everything from chips to enterprise software to communications equipment, all the stuff that big companies buy- has been on the wane for five to 10 years. So what's the next wave? The next wave is what we're calling applied technology. The Internet is a computing platform built on top of the core technology. Applied technology is what gets built on top of that: It's Web services."

CiviCRM is a great example of this. It is both built on top of core technologies (Internet, PHP, MySQL, Apache), but it is designed for others to build on top of it. Apps on top of apps on top of apps.

While the commercial world tries to figure out how to extract maximum profits at each layer, the Social Source approach is to build the core layers and let nonprofits pay consultant to fill in the blanks. As those blanks are filled in with contributed software, the entire sector gets better, more efficient and more affordable tools.

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