I read, "Net Gain" and thought it was a bunch of bull. Then I read, "Out of the Box", also by Hagel and was convinced that this was a well intentioned individual that just didn't get it. Now, I'm at that point where anything he says just kind of annoys me. His latest remarks in HBS Working Knowledge managed to do just that. He commented that:
"Web services replace "big bang" approaches with targeted incrementalism. The business proposition with this technology is much more compelling: Invest modest sums of money with relatively short lead-times (often six to twelve months) and generate tangible business benefits, particularly in the form of operating savings. In these challenging economic times, that's a powerful proposition.
"Targeted incrementalism"? Web services are a new breed of network but fall victim to the same old forces, i.e. Metcalfe's Law. For those of you who aren't familiar with this, it states, "the usefulness, or utility, of a network equals the square of the number of users." This law has been modified over the years to take into account the number and value of the resources on the network (i.e. available services). Now, you might be able to hook one business partner up to another with web services and claim that you saved x millions of dollars - but you probably could have done that with ANSI X.12 EDI as well. The value of web services is directly related to the number and value of the resources made available. And, my friends, this is a waiting game. Unfortunately, the Gartner Hype Cycle doesn't actually take into account Metcalfe's Law or the Tipping Point.
Now, Edwin Khodabakchian at Collaxa agrees with Hagel, commenting that, "Incrementalism is the key to success. No doubt. The Web [the largest and most dynamic always-on application] was founded on incrementalism, allowing enterprises to build complex systems, one page at the time." Edwin has a valid point - you can start small and build your way up... just be prepared - the value increases with adoption and utility... just like any network. Don't plan on getting your ROI until you have a critical mass of valuable services available.