Forrester: Social networking will be biggest enterprise 2.0 priority by 2013; Smaller businesses reticent

Forrester: Social networking will be biggest enterprise 2.0 priority by 2013; Smaller businesses reticent

Summary: Enterprise 2.0 will become a $4.6 billion industry by 2013 and social networking tools will garner the bulk of the money, according to a report by Forrester Research.

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Enterprise 2.0 will become a $4.6 billion industry by 2013 and social networking tools will garner the bulk of the money, according to a report by Forrester Research.

The report, released on Monday and penned by Forrester analyst G. Oliver Young, shows a few notable trends that are worth diving into. Sarah Perez at ReadWriteWeb first detailed the report. Here are the charts that jumped out for me.

forr1.png

That chart is basically the opposite of what I would have expected. Enterprise 2.0 (all resources) should appeal more to small to medium sized businesses as it may lower implementation costs and provide other productivity enhancements. Instead more than half of these smaller businesses aren't even considering enterprise 2.0 apps while the giants are diving in head first.

Forrester defines Enterprise 2.0 as the corporate version of Web 2.0. Here's the research firm's definition:

In Forrester's view, the key hallmark of Web 2.0 is efficiency for end users, and the ultimate goal is to use technology like Ajax, rich Internet applications, blogs, wikis, and social networks to foster productive, advantageous behavior among employees, customers, partners, and other networks such as Social Computing, the Information Workplace, and collective intelligence.

Meanwhile social networking will be the biggest priority followed by mashups by 2013.

forr2.png

The top spending categories aren't all that surprising. For instance, social networking is a decent substitute for knowledge management applications, a category that companies haven't quite cracked. In other words, social networking could yield ROI. Mashups could also deliver faster time to market and it doesn't hurt that giants like IBM are pushing them.

Other key takeaways:

Web 2.0 tools and technologies focus on worker productivity and collaboration. Offerings like those from BEA Systems, IBM, and Microsoft and from pure-play vendors like Awareness, NewsGator Technologies, and Six Apart all factor into the enterprise Web 2.0 space.forr3.png

Podcasting will the smallest enterprise 2.0 market with $273 million in projected spending by 2013.

Enterprise 2.0 apps will never see a blank IT slate: Legacy applications rule. Forrester writes:

Across the board, Web 2.0 tools enter a crowded space full of legacy software and processes that are difficult to displace and with which Web 2.0 software must integrate to be fully effective. Integration with lightweight applications like email and Excel, as well as heavier applications like Web content management suites, campaign management software, portal software, and customer relationship management (CRM) systems, must all be addressed over time.

Business units will drive enterprise 2.0 adoption. The IT department remains an obstacle due to slim budgets and the need to maintain legacy hardware and software infrastructure.

Enterprise 2.0 companies (right) will struggle to make deliver big profits. Why? Workers (and consumers) are used to free apps. "The starting point has been set at free, and buyers will always have the option to try to exploit a free consumer-class service to solve an enterprise problem if the entry price gets too high," says Forrester. If that scenario plays out you really have to wonder how enterprise 2.0 will generate $4.3 billion in spending by 2013.

Topics: Browser, Collaboration, Networking, Software, Social Enterprise

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8 comments
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  • Low adoption amongst smaller businesses

    These are indeed interesting results Larry and I share your view that the smaller businesses probably have the most to gain. Perhaps the issue is with the smaller companies not really know what is involved - if these businesses are thinking moderating networks, producing Podcasts and the like then they may be concerned it takes up too much time for uncertain benefits.

    And our own company excepted it doesn't feel like many Web 2.0 vendors are really wooing the smaller business market. This research isn't going to pursuade them they should.

    Ian Hendry
    http://www.wecando.biz
    wecandobiz
  • RE: Forrester: Social networking will be biggest enterprise 2.0 priority by 2013; Smaller businesses reticent

    My guess is you have fewer small businesses expressing interest because the majority of the buzz and trendmongering is found in the larger corporate environments. Small businesses can't afford to make plans for such a vague buzzword as Web 2.0 and connecting the value proposition of social networking to their daily business is much more difficult for those with their feet planted firmly on the ground.
    jeremy.huffman@...
    • Business case for Enterprise 2.0

      It seems intuitive that smaller IT shops with smaller budgets would be less apt to "spend on trend."

      While the statistics re: planned purchasing of Web 2.0 tools and expected size of market are exciting, they do show that on average, about half of the IT decision-makers do not consider Web 2.0 to be an investment that delivers sufficient value to warrant pursuit. Does material exist out there that articulates the value proposition to the Enterprise of Web 2.0, including social networking, in real terms?
      lvs2learn
    • That may be true but...

      That may be true while talk of social networking is almost exclusively about Facebook and LinkedIn, neither of which have much appeal to SMBs. But there is in fact the ability through other social networks to easily and cost effectively network with business decision makers at any time of day, which you think would suit those who run their own businesses and tend to only to be able to find spare time to do this sort of thing here and there. Networking online is certainly easier to do (and significantly cheaper) than finding the time to put on a suit and go to a BNI chapter meeting every Tuesday at the crack of dawn, for example.

      And let's not forget that in current economic conditions, low or no cost marketing has big attractions. Social networks offer a lot for nothing.

      Ian Hendry
      CEO, WeCanDo.BIZ
      http://www.wecando.biz
      ianhendry
  • RE: Forrester: Social networking will be biggest enterprise 2.0 priority by 2013; Smaller businesses reticent

    I'm a bit surprised there is not a mention of SharePoint, since it probably does more to contribute to E2.0 than most of these added together. Why is that???
    charlie.bess@...
  • RE: Forrester: Social networking will be biggest enterprise 2.0 priority by 2013; Smaller businesses reticent

    With these spend trends, I foresee vendors that package social capabilities into their existing collaboration offerings to have a clear advantage (IBM Lotus suite with integrated Lotus Connections (social) and Mashup server), especially in large enterprise segment. In internal social space I also see excellent opportunities for Talent Management SaaS vendors. More thoughts at http://www.enterprise20link.com/
    Regards,
    Gopi Padakandla
    gpadakandla
  • RE: Forrester: Social networking will be biggest enterprise 2.0 priority by

    "That chart is basically the opposite of what I would
    have expected. "

    There's a simple reason why large corporations are
    attracted to web 2.0 tools.

    They need to break down internal barriers, which have
    become part of their ADN through the years.
    Such bottlenecks are costing them a lot in terms of
    productivity.
    Classic intranets have failed to reverse the trend, as
    they are document centric and usually replicate the
    existing barriers.
    Social networks, being user centric, thus have a great
    role to play.

    SMEs usually do not suffer from such pitfalls.
    Gilcatt
  • RE: Forrester: Social networking will be biggest enterprise 2.0 priority by 2013; Smaller businesses reticent

    I totally agree with social networking will be big by 2013 for I've just started my own 4 months ago, and it's a pain.
    I had to do alot of research to at least boost it off the ground, I figured the net will be the next world economy and if so I want in. But along the way I enjoy reading these types of blogs for the articles and comments are so very informative.
    Quinclyn Birris Ceo of Candyfist
    www.candyfist.com
    candyfist