Andrea DiMaio

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Andrea Di Maio
Managing VP
15 years at Gartner
28 years IT industry

Andrea Di Maio is a managing vice president for public sector in Gartner Research, covering government and education. His personal research focus is on digital government strategies strategies, Web 2.0, open government, cloud computing, the business value of IT, smart cities, and the impact of technology on the future of government Read Full Bio

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Is There A Government 2.0 Market?

by Andrea Di Maio  |  September 2, 2010  |  15 Comments

A few days ago I had a quite interesting conversation with an IT service provider that is in the process of ascertaining the business opportunities created by government 2.0 or open government programs and initiatives. What is high on their priority is to identify products and respective partners that would give them a competitive advantage in this market.

But is government 2.0 really a market? What are the products and services that potential clients would buy and how would they contribute to those clients’ success?

The trouble is that there is no such thing as a clear value proposition for government 2.0. The gut feeling is that it is the right thing to do, it is either unavoidable or useful or both. But turning this feeling into a business case to invest in a particular toolset or to acquire specific services, well that’s a different story.

Of course there are areas that look like a market:

  • open data development and operation, including all it takes to locate, assure, clean, publish and maintain public data on web sites like Data.gov.
  • enterprise collaboration platforms, such as Sharepoint, Notes, Jive and many others
  • electronic consultation and participation, with tools like IdeaScale or Google Moderator
  • development and implementation of social media based communication strategies

The problem is that government 2.0 can be all or none of the above. And, most importantly, as the value creation is a discovery process and rarely something that can be planned, there are very good reasons for most government organizations to spend very little, close to nothing, on tools and solutions, and to leverage as much as possible inexpensive and consumer tools.

While vendors have no problem in accepting the idea that clients want a proof of concept or a pilot before moving to real deployment, they are less happy with the proposition that clients keep using those inexpensive tools forever.

But this is the risk with government 2.0. As the value creation path is unknown and changes over time, and the place and pace of collaboration and engagement is determined by constituents more than by government itself, there is a good reason to stay in “pilot mode” for quite some time, and – in some cases – forever.

So, if this is the case, where is the market? One could argue that there are lots of opportunities for consulting and services. But who are the players who really get this stuff? Indeed there are evangelists and prominent public speakers with all large vendors as well as some of the specialized, niche players (I won’t name any names, but many of them are active twitterers). However, when it comes to identifying service providers who are leaders in this space, I am not sure there are any.

Reality is that government 2.0 has to rely on internal government skills and capabilities more than on vendors, be they consultants, system integrators, software developers, communications specialists. Of course there is a role for all these in helping through the transformation process, but one cannot “outsource” to the market what has to become a core competence. But government 2.0 is about redefining the entire value chain (or, better, value network) for most government services and operations.

My contention is that only those vendors who are able to help their government clients understand and execute on the above will thrive by positioning their “traditional” offerings in these redefined value networks. While there might not be any real government 2.0 market, government 2.0 will definitely change the way government clients look at (and consume and buy) IT and business services.

15 Comments »

Category: web 2.0 in government     Tags: ,

15 responses so far ↓

  • 1 Stephen Collins   September 2, 2010 at 3:48 am

    Yes. You’re absolutely right. Selling anything as “Government 2.0″ is likely getting it wrong.

    Better to ask “what advice, consulting, infrastructure, services, training, whatever, can I provide to my clients that will make it easier for them to work and be relevant in what they do”

    And better to talk to them in terms of the things that make Government 2.0 what it is – open data, collaboration, service provision, consultation and collaboration with the public and between agencies, etc.

  • 2 Han Dieperink, CTO   September 2, 2010 at 4:05 am

    We, a dutch IT service provider in local gov, distinguish three main Gov 2.0 sub-markets, linked to strategic objectives:
    1 – Creating happy citizens: typical eGovernment solutions (midoffice, case management, open data)
    2 – Creating happy civil workers: Collaboration and the new way of work.
    3 – Crushing IT costs: Virtualisation, shared service centers, cloud

    The first sub-market just past the valley of despair, the second is still on hype-mountain and the third one is on its way to the plateau of maturity. Of course these are Dutch observations.

  • 3 Alan W. Silberberg   September 2, 2010 at 4:18 am

    Andrea,

    A well written post that I think I need to articulate some different perspectives.

    The Open Government, or Government 2.0 aka “Gov 2.0″ movement is in the process of becoming an industry. Not just for consultants and their clients, but for a whole generation of entrepreneurs who would never have even thought of the idea of government contracts as well as several generations of Government workers struggling with this reality.

    In almost one fell swoop, some of the most arcane ways of doing business, ie, Government ways, are being revolutionized from within and without. So as part of the Gov 2.0 movement, we are witnessing the “devolution” of contracting – from the long term multi-year contracts to a more needed and agile “flash” contracting model. This changes who gets to sit at the table, and therefore injects a “business model” of the markets approach, perhaps for the first time.

    Additionally, it creates whole new inventive technologies to approach problems and creates whole new job descriptions as well.

  • 4 Arvind   September 2, 2010 at 5:35 am

    Andrea,

    Perhaps this article would help you see the use-case to mankind: http://www.pluggd.in/government-2.0-is-the-axis-of-semantic-web-web-3.0-297/

    While the concerns articulated on your post are genuine, but the inner needs of people of being “involved” cannot be limited to current scheme of things around the world. Entrepreneurs sense this inner need of people quite well, and investors of course will love to continue investing into such entrepreneurs.

  • 5 Arvind   September 2, 2010 at 5:40 am

    @Alan I agree to your thoughts on flash procurement philosophy.

    Surprisingly you’d find that the most popular idea on our sample Gov 20 terminal shows “get rid of arcane tendering system from Government.” This is how systems can speak the mind of people. http://bit.ly/cGTAye

    cheers,
    Arvind

  • 6 Alex Howard   September 2, 2010 at 8:03 am

    Andrea,

    I think Stephen Collins is spot on, with the caveat that there are indeed large companies that have positioned themselves as “getting” Government 2.0. It’s not hard to find them, either, around D.C. if you’d visited the Gov 2.0 Expo (which I’m not clear if you did earlier this year?) you could see precisely who sponsored the event, and who was working hard to connect with potential clients. There are a host of established players in the government IT space, naturally, including the massive companies that are positioning themselves as cloud providers. Those include vendors that provide GIS solutions, document or database management, and social CRM. Your contention that such vendors are positioning is, in other words, valid, and the categories that you define make sense.

    There are also smaller companies that provide more specific skill sets, including open source development and integration, open data, crowdsourcing or ideation platforms, or expertise in developing APIs or for the Semantic Web. Some of that expertise will come from in-house, particularly where the core competencies of government webmasters pertain. You can see that in the development of the CA.gov portal or the new legislation.gov.uk site.

    One area you might watch is where marketplaces are created by government data or citizen engagement platforms. On a local level, SeeClickFix and Citysourced don’t fit traditional categorization. On a federal level, Palantir acts as a platform for non-technical subject matter experts to analyze multiple data sets. And on the business side, I’m writing about a startup that’s managed to unlock data that will provide unprecedented transparency into the financial sector.

    All of that is at a nascent stage. The GSA’s rules, established contracting relationships at the federal level and compliance issues will drive the federal market. Budget crunches at the state and local level mean that free consumer tools adopted internally will remain compelling there. But beyond the “marketplaces of ideas” driven by game mechanics and open government advocates, there is reason to think that a number of nimble startups will provide agencies, states and politicians with new capabilities to collaborate, communicate and drive more data-driven policy.

    That emerging ecosystem does resemble a market, as you define it, though it’s early days yet. It will be interesting to look back a year from now and see what has developed.

  • 7 sanchezjb   September 2, 2010 at 8:33 am

    The Gov 2.0 market’s value come from listening and engagement. One of the tenets of Gov 2.0 is enhanced collaboration not just with citizens but across organizational boundaries. Collaboration should have an objective: Improve the effectiveness and efficiency of government programs and services. Just as important, collaboration can also result in enhanced risk mitigation.

    Listening to what’s being said about government agencies, programs, and initiatives via monitoring and analytics can provide government with feedback on the how these are not just perceived but how effective and efficient they are. There’s lots of noise so the challenge is filtering that noise into information that’s relevant, timely, and can be acted upon to improve government effectiveness and efficiency. Listening does not necessarily need to involve engagement.

    The information that does come from engagement needs to be analyzed and also used to enhance service delivery and drive strategy. Just as important, there needs to be feedback via communications to citizens and other stakeholders to show how the results of this engagement are again Improving the effectiveness and efficiency of government programs and services.

    Distilling all this into meaningful knowledge and sharing this is often referred to a knowledge management (perhaps not the best term but that’s another topic for discussion). The benefits of knowledge capture and sharing should cascade across multiple government functions positively impact outcomes and mitigate risk.

    In effect, the Gov 2.0 market value within the government (this is not just about IT service providers/contractors assisting the government) and external to the government is defined by enhancing government’s listening, analytics, communications, knowledge management, and risk management capabilities.

  • 8 Steve Ardire   September 2, 2010 at 10:14 am

    Replace employees with citizens and Gov 2.0 market is ‘similar’ to open world collaborative enterprises which unfortunately are few and far between.

  • 9 Doug Hadden   September 2, 2010 at 11:35 am

    It is always difficult to describe a transformative market, one that will result in significant change, in the context of the previous one. The value proposition of discontinuous change is hard to articultate when using the measurements from the previous technology.

    And Government 2.0 will, as you have pointed out, break up the previous categories of IT services to government. This will change the IT landscape.

  • 10 Tauqueer Ali   September 2, 2010 at 2:56 pm

    Andrea – Thanks a lot for sharing valuable insights on your blog and during our discussion on phone. As you and many others on this blog have pointed out, Government 2.0 is still in a nascent stage. This makes the job of vendors, who supply IT solutions to government agencies (like us), difficult in positioning themselves in Gov2.0 landscape knowing that the tangible values created by Government 2.0 initiatives are not entirely clear to anyone.

    Our focus now is to show how our Government 2.0 offering will create real values for government agencies rather than just helping them comply with certain “open government directive”.

    Best,
    Tauqueer Ali (Lead Consultant – Government 2.0, Wipro Technologies)

  • 11 Andrea Di Maio   September 3, 2010 at 6:58 am

    Quite a few interesting observation. As a matter of fact, every time I touch on the “supply” side of the equation, I generate more debate, which is good, as we are learning as we go what exactly government 2.0 is about.
    Let me take the comments so far one by one:

    @Stephen – Indeed, I like your point about helping clients be relevant in what they do

    @Han – Good segmentation, but one where I suspect only number 3 (reducing costs) is a real market for the foreseeable future

    @Alan – Are you sure that this agility isn’t the symptom of financial difficulties as well as the pilot attitude I mentioned in the post? How can we say that this is a sustainable shift in purchasing behaviors? Further, there are plenty of horror stories about lathe projects going sour, but wait for the unintended consequences of some of these small contracts, and the pendulum may swing back.

    @Arvind – Sorry, I disagree on the link between gov2 and semantic web and truly believe that’s one area where the potential for wasting money is very high. But that’s just a view, skewed by how many years we have been talking about this (using different names) since the dawn of AI, without accomplishing much so far

    @Alex – I don’t buy that the “cloud market” has much to do with gov2.0. On the other hand, I agree that there is a lot that can be done with open data. But would that be a government 2.0 market or just a market stimulated by government 2.0? Actually the target here would be entrepreneurs as well as established businesses that leverage public data. But would government per se be a market? Would vendors that are currently investing on selling TO government get much out of this? I doubt it.

    @Sanchexjb – I love your list as you hit the nail on the head about the difference between publishing data (which is the current “government as a platform” fallacy) and listening. Indeed there are plenty of opportunities to monitor social media (this was under the fourth bullet in my post), but once this becomes a core competence for government – as it should – where is the market?

    @Steve and Dough – we agree that this is a nascent market and comparisons might help. However what I am not really sure about is whether it can lead to a sustainable revenue stream for vendors

    @Tauqueer Ali – Thanks a lot for offering a testimony from somebody who is in the process of articulating a Gov 2.0 value proposition. And I agree that, as somebody else observed, one has to look as Gov 2.0 as a means to an end, rather than and end, like some of the alleged “Gov 2.0″ vendors around DC seem to be doing.

  • 12 Chris Parente   September 7, 2010 at 9:38 pm

    Andrea — good post, and very thoughtful comments. You are certainly correct when you say that government 2.0 requirements internal government “skills and capabilities.”

    I would suggest there is a market here, providing you expand the term to include the technical infrastructure to enable better management of huge amounts of data. Government 2.0 depends on this IMHO.

    As Alan S. says, the old rules are crumbling, and there are better ways to do things. The business of government contracting is changing rapidly, much faster than government itself.

    I found it interesting to read that Amazon just received a FISMA certification for AWS. Let’s watch them take on the established contracting giants offering their cloud solutions and then decide if there is a market here.

  • 13 Janice van Reyk   September 7, 2010 at 11:25 pm

    You make a very good point that government 2.0 has to
    rely on internal government skills and capabilities more than on vendors or consultants or communications specialists. On the key action areas in the Victorian Public Sector Gov 2.0 Action Plan is “Bulding Capability” which is focused on initiatives to build the internal capability and skills to implement Gov 2.0.

    Victoria is the first government in Australia to have a Gov 2.0 Action Plan. It can be accessed at egov.vic.gov.au.

  • 14 Christina Morrison   September 10, 2010 at 12:23 pm

    Great post Andrea. The customers (in this case, government agencies) will always define the marketplace, and as anxious as vendors may be to jump on the Gov 2.0 movement and integrate our products into government workplaces, we still have steps to take to convince a wider audience of government officials to embrace the concepts behind the movement of listening and engaging with citizens. As difficulties arise with a new approach of increased engagement, vendors can adjust their products to fit those government needs.

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