Here are some of my thoughts on what Web 2.0 would mean to the software services industry.
The five main principles that qualify for calling and application / site Web 2.0 is:
1. Web as a Platform and Software as a service
2. Architecture of participation for harnessing collective intelligence
3. Own or create hard-to-recreate data sources
4. Software through multiple channels and devices
5. Rich User interface or Rich Internet Applicaitons
While the principle 2 seems to be attracting the most attention in Web 2.0, for the services industry, principle 1 holds the key.
Let me elaborate what I mean. In terms of implementation, principle 2 stands for creating and enhancing the network of people visiting your applicaitons and using them or adding value to them through blogs, wikis, social networks, susbscription of feeds, provide permalinks and trackbacks, allowing tagging or folsonomy as some call it. Now, providing or building these features is a breeze. Most of them can be just configured by using many available off-the-shelf, open source software.
Also, practically speaking, if an organization does not have a core business around which to implement web 2.0, just providing the above is not going to be of any value add to itself.
The crux continues to remain that any organization must have a core business model that needs to adapt itself to Web 2.0. By this I mean, they must be providing some service in the real world and that should preferrably have already made its presence on the web through the Web 1.0 way. Even if not, it needs to be morphed to be provided as an online service, in the first go.
This is nothing but extending the web service model to the real "web". While the former was more often than not, within the walls of an enterprise or extended mainly to business partners, the latter would be real services maintained for the public use on the web by anyone who subscribes and pays for it. This would mainly help the smaller business of both types: the providers of such services as well as the consumers of such services.
There are enough successful models over the last couple of years like the salesforce.com which are thriving on this business model, a model of revenue generation that did not exist inherently in web 1.0. This may be one of the main causes for a potential success of Web 2.0, as I see it.