It has come to the final pattern of Tim O’Reilly. Today’s blog topic will be focused on the last pattern of web 2.0 application, which is “Lightweight Models & Cost-Effective Scalability“.  Lightweight Models & Cost-Effective Scalability is defined as Agile software-development techniques are ideally suited to support rapid release cycles, so they have a readiness for change. Integrate lightweight development and deployment processes as complements to the perpetual beta. Combine this with low-cost, commodity components to build a scalable, fault-tolerant operational base. (Tim and John 2006)

To explain this pattern in the real world, I have chosen eBay as my example to demonstrate the benefits of this pattern. eBay is  an American multinational internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. (Wikipedia)

eBay is using Lightweight Models and Cost Effective Scalability in a great way. For example, eBay does not provide any products for sale, they just providing the facility to allow customers to sell to another customers. eBay does support million of users and making money of each transaction. Therefore, eBay does not have deal with storing products and their system scale to support as many users as it requires. eBay generates revenue from various fees. The eBay fee system is quite complex; there are fees to list a product and fees when the product sells (Final Value Fee), plus several optional adornment fees, all based on various factors and scales.

Moreover, eBay did not develop their payment system. eBay sellers are allowed  to offer a variety of payment systems such as PayPal, Paymate, ProPay, and Moneybookers. In addition, In October 2002, PayPal was acquired by eBay for $1.5 billion, so that eBay is having an entire payment system that they did not develop and can make sure all eBay users are using Paypal for their payments transactions. Paypal has three types of accounts which are personal, premier and business and all of them free joining and the user of paypal can upgrade the account at any time with free charge. Therefore, eBay has access and make revenue from Paypal services.

Like any other business models, there are also issues with eBay for the sellers. I will just provide a list of the issues and you can visit this page for more information.

1. Management
2. Feedback Policy
3. Small Businesses Get Shut Out
4. Lack of Communication
5. Payment Policies
6. Fees/Lack of Profitability
7. Unwarranted Account Suspensions
8. The Buyers Themselves
9. Glitches
10. Lack of Innovation

Here are 2 best practices that can be recognised from eBay business model and  for using Lightweight Models & Cost-Effective Scalability:

  • Design software so that it improves as more people use it: By embracing network effects, the best Web 2.0 software, such as eBay, becomes better as more people use it.
  • Facilitate emergenceIt: is often surprisingly difficult to predict the best design for a piece of software, the optimal interface, or the ways in which users will use the application. Every software application faces this challenge. Web 2.0 applications impose less upfront structure and minimize the number of hard-wired assumptions to let optimal use and structure emerge over time, based on real-world application and not unreliable predictions. This encourages unintended uses and allows user behaviour to influence everything from product direction to interface navigation.
here is a question to answer, even though this pattern is wonderful and interesting, what are the implications of having such models for your organisation?

Reference

Tim O’Reilly & John Musser. (2006). Web 2.0: Principles and Best Practices. Retrieved May, 11 2012

Wikipedia. (2012). eBay. Retrieved May, 11 2012

Chris Crum. (2009). Top 10 Frustrations for eBay Sellers. Retrieved May, 11 2012