Manuel Castells' predictions about the "network enterprise" have borne out  

Networld

When marketers at Sun Microsystems created the now well-worn tagline, “The network is the computer,” they couldn’t possibly have foreseen how modest that claim would turn out to be. Manuel Castells, a professor of sociology and planning at U.C. Berkeley, argues a more sweeping and substantive thesis in The Rise of the Network Society (Blackwell, 1996), the first installment of a prescient three-volume manifesto called The Information Age: Economy, Society, and Culture. In Castells’ view, the network is not only the computer — it’s the enterprise, the business organization, and even the “global city” itself.

Castells devotes some of his masterpiece, which is heavy with demographic and economic data, to a discussion about how the business organizational model has transformed from “Fordism” (mass production) to “post-Fordism” (flexible production), and the intersection of that new model with another historic trend: the development of IT networks. According to Castells, this convergence is the basis of the new information economy, and that economy is typified by a “new organizational form”: the network enterprise. “The successful organizations are those able to generate knowledge and process information efficiently,” says Castells; the network enterprise fits that bill by “transform[ing] signals into commodities by processing knowledge.”

The business landscape in 2000 offers many examples. Forward-looking enterprises are building messaging transport “highways” among their application silos to unify corporate information. At the same time, many businesses are building highways among each other, often with strategic, application integration-powered hubs at their intersection. (Witness the rapid proliferation of first-generation B2B exchanges.) These trends crystallize Castells’ theory about how businesses in the new economy will engage as well as “internalize” the network paradigm to be adaptable, flexible, and to keep an innovative edge. As he ominously intones, “Inside the networks, new possibilities are relentlessly created. Outside the networks, survival is increasingly difficult.”

All of a Piece

The packaged software industry serving these trends is fractured. Enterprise application integration (EAI), the domain of messaging transport vendors such as Active Software Inc., STC, and Tibco Software Inc., is considered a separate challenge from data transformation- focused B2B integration (B2BI), the purview of Mercator, WebMethods Inc., and their ilk. But the convergence of these markets — as well as the emergence of intriguing new outsourced solutions such as the Viquity Dynamic Trading Network — will bring the “out of the box” network enterprise concept closer to earth.

The new $1.3 billion merger between Active Software, which had emerged as a best-in-breed EAI player, and WebMethods, an equally impressive contender in the B2BI space, breaks the ice for a shakeout. Company executives on both sides emphasize that prior to the merger, joint customers, most notably FedEx, professed a need for a single, Internet-based solution for EAI and B2BI needs. We’ll surely see more EAI-B2BI marriages in the next year.

At the extreme end of the inclusiveness spectrum, Silicon Valley startup Viquity, headed by erstwhile Brio Technology and Red Brick executive Chris Grejtak, seeks to provide outsourced infrastructure for dynamic commerce networks, including interapplication transport and data transformation. Even more interesting, however, is Viquity’s support for supply-chain reporting and analysis through a common data model. Viquity’s decision-support component may be a key to avoiding what Castells calls the “articulation errors” — or poor responses to supply-and-demand changes — to which network enterprises are prone.

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