Lightweight Models & Cost-Effective Scalability

Posted: May 9, 2012 in INB347 Web 2.0
Tags: , , , ,

Another of the web 2.0 movement patterns as described in O’Reilley’s web 2.0 trend writings; lightweight models and cost-effective scalability is all about small web 2.0 applications adjusting to growth whilst maintaining functionality and availability at a low cost.  These models rely on advertising exposure and sponsorship as a source of income, providing a free service to users with the ability to upgrade to a higher level of service at a cost.

The idea of this concept is to do more with less. Create a service that is cost-effective, attractive for users and adjusts and scales to growth and upgrades. Usually these web 2.0 applications start off small with a few employees maintaining the product to a growing population of users. These web 2.0 models require low up-front costs to develop with little marketing to become vastly popular and grow. Anyone can create a web service.  Pre-existing hardware, reuse of services and online data libraries make it possible to develop online services at low costs with limited business resources.

Best practices surrounding this concept of low-cost scalable models includes:

  • Beginning small and expanding on user growth and demand
  • Target sponsorship and advertising
  • Outsource where possible for low-cost infrastructure
  • Offer tiered pricing with different levels of service
  • Employ new features regularly

Web services that have used this low-cost business model of start-off small and get big include MySpace, digg.com, DropBox, Wikipedia, Facebook etc. The opposite to this model would be old era websites such as Amazon that employed a big bang approach which saw it start of as a large company with many resources.

A good example to explain this lightweight, low-cost model technique is reddit.com which started off as a small lightweight model service with 11 employees and now is a viral sensation with millions of subscribers and thousands of posts a week.

Reddit is a social media/social news website in which subscribed users can post content while other users rank the content by pressing ‘up’ or ‘down’ to rank it’s popularity, following trends on the internet.

(reddit.com)

With relation to the lightweight model and cost-effective scalability concept, reddit is a good example through it’s use of the best practices and light model as described above.

Reddit, founded in 2005 began with 2 founders and a sponsorship deal with  Y Combinator with minimal funding (http://thenextweb.com).  The website continues to meet growth demand and follow user trends as a best practice.  User’s are allowed to view the website and news articles; registered users are able to form a customized page to view ‘subreddits’ of choice and are able to rank the articles to increase it’s popularity. However due to community change the front page was archived and now users see the main page with submissions displayed with a combination of rank, age and vote count; showing reddit’s ability to adapt to user demand.

The web service adapts a web banner type of advertising to see return of income. This meaning the advertising is encoded on the website and is delivered from an external web server. This meaning every time a click is made from a user on the source web page to the advertised web page, a small amount of money is paid back to the source (http://en.wikipedia.org/wiki/Banner_ads).

A significant part in reddit history was in 2008 where it become an open source project. This meaning all of it’s libraries are freely available to encourage future growth (Blog.reddit.com).

Due to Reddit’s continuing popularity, the website now offers a tiered levels of service at a cost. The website is freely accessible to anyone, subscribers are able to vote on posts and a new Reddit Gold service is available at a cost of US$3.99/month or US$29.99/year. This also encourages the development of new features regularly. This is an enhanced version of reddit that offers more sorting features and a friends option (www.techshout.com).

Reddit is a pure example of lightweight business models with cost-effective scalability as outlined above. These services are the new adaptive way of web 2.0 compared to legacy web 1.0 services that are infrastructure heavy with no cost-effective or scaling to user demand techniques.

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