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of friction between companies and applications. Instead of everyone trying to control

the fire hydrant nozzle, they made all the nozzles and hoses the same, creating a

much bigger market that stretched across every neighborhood of the world. Then

companies started to compete instead over the quality of the hose, the pump, and the

fire truck. That is, they competed over who could make the most useful and nifty

applications. Said Joel Cawley, the head of IBM's strategic planning unit, "Standards

don't eliminate innovation, they just allow you to focus it. They allow you to focus

on where the real value lies, which is usually everything you can add above and around

the standard."

I found this out writing my last book. Once Microsoft Word got established as the

global standard, work could flow between people on different continents much more

easily, because we were all writing off the same screen with the same basic toolbar.

When I was working on my first book, From Beirut to Jerusalem, in 1988,1 spent part

of my year's leave in

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the Middle East and had to take notes with pen and paper, as it was the pre-laptop

and pre-Microsoft Word era. When I wrote my second book, The Lexus and the Olive Tree,

in 1998, I had to do some of the last-minute editing from the computer behind the

front desk at a Swiss hotel in Davos on a German version of Microsoft Word. I could

not understand a single word, a single command function, on the toolbar of the German

version of Word. But by 1998, I was so familiar with the Word for Windows writing

program, and where the various on-screen icons were, that I was able to point and

click my way through the editing on the German version and type my corrections with

the English letters on the German keyboard. Shared standards are a huge flattener,

because they both force and empower more people to communicate and innovate over much

wider platforms.

Another of my favorite examples of this is PayPal, which enabled eBay's e-commerce

bazaar to become what it is today. PayPal is a money transfer system founded in 1998

to facilitate C2C (customer-to-customer) transactions, like a buyer and seller

brought together by eBay. According to the Web site ecommerce-guide.com, using PayPal,

anyone with an e-mail address can send money to anyone else with an e-mail address,

whether the recipient has a PayPal account or not. PayPal doesn't even care whether

a commercial transaction is taking place. If someone in the office is organizing a

party for someone else and everyone needs to chip in, they can all do it using PayPal.

In fact, the organizer can send everyone PayPal reminders by e-mail with clear

instructions as to how to pay up. PayPal can accept money from the purchaser in one

of three ways, notes ecommerce-guide.com: charging the purchaser's credit card for

any transactions (payments), debiting a checking account for any payments, or

deducting payments from a PayPal account established with a personal check. Payment

recipients can use the money in their account for online purchases or payments, can

receive the payment from PayPal by check, or can have PayPal directly deposit the

money into a checking account. Setting up a PayPal account is simple. As a payer,

all you have to do is to provide your name, your e-mail address, your credit card

information, and your billing address for your credit card.

All of these interoperable banking and e-commerce functions flat

tened the Internet marketplace so radically that even eBay was taken by surprise.

Before PayPal, explained eBay CEO Meg Whitman, "If I did business on eBay in 1999,

the only way I could pay you as a buyer was with a check or money order, a paper-based

system. There was no electronic way to send money, and you were too small a merchant

to qualify for a credit card account. What PayPal did was enable people, individuals,

to accept credit cards. I could pay you as an individual seller on eBay with a credit

card. This really leveled the playing field and made commerce more frictionless."

In fact, it was so good that eBay bought PayPal, but not on the recommendation of

its Wall Street investment bankers- on the recommendation of its users.

"We woke up one day," said Whitman, "and found out that 20 percent of the people on

eBay were saying, 'I accept PayPal, please pay me that way.' And we said, 'Who are

these people and what are they doing?' At first we tried to fight them and launched

our own service, called Billpoint. Finally, in July 2002, we were at [an] eBay Live

[convention] and the drumbeat through the hall was deafening. Our community was

telling us, 'Would you guys stop fighting? We want a standard-and by the way, we have

picked the standard and it's called PayPal, and we know you guys at eBay would like

it to be your [standard], but it's theirs.' And that is when we knew we had to buy

the company, because it was the standard and it was not ours... It is the best

acquisition we ever made."

Here's how I just wrote the above section: I transferred my notes from the Meg Whitman

phone interview from my Dell laptop to my Dell desktop, then fired up my DSL connection

and double-clicked on AOL, where I used Google to find a Web site that could explain

PayPal, which directed me to ecommerce-guide.com. I downloaded the definition from

the ecommerce-guide.com Web site, which was written in some Internet font as a text

file, and then called it up on Microsoft Word, which automatically transformed it

into a Word document, which I could then use to write this section on my desktop.

That is also work flow! And what is most important about it is not that I have these

work flow tools; it is how many people in India, Russia, China, Brazil, and Timbuktu

now have them as well-along with all the transmission pipes and protocols so they

too can plug and play from anywhere.

Where is all this going? More and more work flow will be automated. In the coming

phase of Web services-work flow, here is how you will make a dentist appointment:

You will instruct your computer by voice to make an appointment. Your computer will

automatically translate your voice into a digital instruction. It will automatically

check your calendar against the available dates on your dentist's calendar and offer

you three choices. You will click on the preferred date and hour. The week before

your appointment, your dentist's calendar will automatically send you an e-mail

reminding you of the appointment. The night before, you will get a computer-generated

voice message by phone, also reminding of your appointment.

For work flow to reach this next stage, and the productivity enhancements it will

deliver, "we need more and more common standards," said IBM's strategic planner Cawley.

"The first round of standards to emerge with the Internet were around basic data-how

do you represent a number, how do you organize files, how do you display and store

content, and how do you share and exchange information. That was the Netscape phase.

Now a whole new set of standards is emerging to enable work flow. These are standards

about how we do business work together. For example, when you apply for a mortgage,

go to your closing, or buy a house, there are literally dozens of processes and data

flows among many different companies. One bank may handle securing your approval,

checking your credit, establishing your interest rates, and handling the

closing-after which the loan almost immediately is sold to a different bank."

The next level of standards, added Cawley, will be about automating all these

processes, so they flow even more seamlessly together and can stimulate even more

standards. We are already seeing standards emerging around payroll, e-commerce

payment, and risk profiling, around how music and photos are digitally edited, and,

most important, around how supply chains are connected. All of these standards, on

top of the work flow software, help enable work to be broken apart, reassembled, and

made to flow, without friction, back and forth between the most efficient producers.

The diversity of applications that will automatically be able to interact with each

other will be limited only by our imaginations.

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The gains in productivity from this could be bigger than anything we have ever seen

before.

"Work flow platforms are enabling us to do for the service industry what Henry Ford

did for manufacturing," said Jerry Rao, the entrepreneur doing accounting work for

Americans from India. "We are taking apart each task and sending it around to whomever

can do it best, and because we are doing it in a virtual environment, people need

not be physically adjacent to each other, and then we are reassembling all the pieces

back together at headquarters [or some other remote site]. This is not a trivial

revolution. This is a major one. It allows for a boss to be somewhere and his employees

to be someplace else." These work flow software platforms, Jerry added, "enable you

to create virtual global offices-not limited by either the boundaries of your office

or your country-and to access talent sitting in different parts of the world and have

them complete tasks that you need completed in real time. And so 24/7/365 we are all

working. And all this has happened in the twinkling of an eye-the span of the last

two or three years."

Genesis: The Flat World Platform Emerges

We need to stop here and take stock, because at this point-the mid-1990s-the platform

for the flattening of the world has started to emerge. First, the falling walls, the

opening of Windows, the digitization of content, and the spreading of the Internet

browser seamlessly connected people with people as never before. Then work flow

software seamlessly connected applications to applications, so that people could

manipulate all their digitized content, using computers and the Internet, as never

before. When you add this unprecedented new level of people-to-people communication

to all these Web-based application-to-application work flow programs, you end up with

a whole new global platform for multiple forms of collaboration. This is the Genesis

moment for the flattening of the world. This is when it started to take shape. It

would take more time to converge and really become flat, but this is the moment when

people started to feel that something was changing. Suddenly more people from

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more different places found that they could collaborate with more other people on

more different kinds of work and share more different kinds of knowledge than ever

before. "It is the creation of this platform, with these unique attributes, that is

the truly important sustainable breakthrough that made what you call the flattening

of the world possible," said Microsoft's Craig Mundie.

Indeed, thanks to this platform that emerged from the first three flat-teners, we

were not just able to talk to each other more, we were able to do more things together.

This is the key point, argued Joel Cawley, the IBM strategist. "We were not just

communicating with each other more than ever, we were now able to collaborate-to build

coalitions, projects, and products together-more than ever."

The next six flatteners represent the new forms of collaboration which this new

platform empowered. As J show, some people will use this platform for open-sourcing,

some for outsourcing, some for offshoring, some for supply-chaining, some for

insourcing, and some for in-forming. Each of these forms of collaboration was either

made possible by the new platform or greatly enhanced by it. And as more and more

of us learn how to collaborate in these different ways, we are flattening the world

even more.

Flattener #4

Open-Sourcing

Self-Organizing Collaborative Communities

Alan Cohen still remembers the first time he heard the word "Apache" as an adult,

and it wasn't while watching a cowboys-and-Indians movie. It was the 1990s, the

dot-com market was booming, and he was a senior manager for IBM, helping to oversee

its emerging e-commerce business. "I had a whole team with me and a budget of about

$8 million," Cohen recalled. "We were competinghead-to-head with Microsoft, Netscape,

Oracle, Sun-all the big boys. And we were

playing this very big-stakes game for e-commerce. IBM had a huge sales force selling

all this e-commerce software. One day I asked the development director who worked

for me, 'Say, Jeff, walk me through the development process for these e-commerce

systems. What is the underlying Web server?' And he says to me, It's built on top

of Apache.' The first thing I think of is John Wayne. 'What is Apache?' I ask. And

he says it is a shareware program for Web server technology. He said it was produced

for free by a bunch of geeks just working online in some kind of open-source chat

room. I was floored. I said, 'How do you buy it?' And he says, Tou download it off

a Web site for free.' And I said, 'Well, who supports it if something goes wrong?'

And he says, 'I don't know-it just works!' And that was my first exposure to Apache . . .

"Now you have to remember, back then Microsoft, IBM, Oracle, Netscape were all trying

to build commercial Web servers. These were huge companies. And suddenly my

development guy is telling me that he's getting ours off the Internet for free! It's

like you had all these big corporate executives plotting strategies, and then suddenly

the guys in the mail room are in charge. I kept asking, 'Who runs Apache? I mean,

who are these guys?'"

Yes, the geeks in the mail room are deciding what software they will be using and

what you will be using too. It's called the open-source movement, and it involves

thousands of people around the world coming together online to collaborate in writing

everything from their own software to their own operating systems to their own