Predicting the battle over collaboration infrastructure in 2009

It’s always the short questions that make my job interesting. Like this one.

Gil, do you think companies will cut back on Enterprise Web 2.0 in light of the economy?

First reaction--it depends. I’m an analyst, that’s always our first answer. But what does it depend on? What are all the factors at play and how will this impact your decisions?  So, here’s my read of the Enterprise Web 2.0 trends based on many conversations with my clients and vendors. I will focus specifically on wiki and social networking tools used to improve internal collaboration and knowledge sharing. These are gaining momentum and acceptance within the enterprise. (See my TechRadar report for the details on what Forrester sees in scope for Enterprise Web 2.0.)

There will be a slowdown of IT-driven collaboration projects in 2009. But there will be increased interest in business-driven collaboration projects. Why? There is a technology populist movement, and has been for a while. Small and medium-sized businesses (SMBs) typically operate with little IT support and rely upon vendors for collaboration services – nothing new here.  But we find that business units in enterprises, especially those in companies with politically weak IT departments, are increasingly behaving like SMBs, and they are going out and provisioning technology on their own. This is a form of institutional Tech Populism.

IT departments react by trying to block the business from getting software services from the cloud. And for good reason.  It’s hard to manage disconnected islands of infrastructure. Furthermore, it circumvents IT, adding complexity and risk to their job--especially if they were not involved in selecting the service. Anecdotally, we find that workers are now spending more time working from their home computing environment in order to access the blocked online productivity sites.

In response, IT says “Ok, we’ll provide you what you need so you don’t have to go behind our backs." In parallel, the traditional brand name ISVs are bolting collaboration features onto their existing enterprise platforms.  IT departments want to minimize operational complexity, so they will be attracted to wikis and social networks provided by vendors with familiar names--regardless of their functional adequacy.

Will it work? In an ideal economy where IT has a budget, maybe.  But what about now?

I predict that IT-driven internal collaboration initiatives will be squeezed tight: 1. they are usually more expensive than the Tech Populist options. 2. IT is being asked to sacrifice projects, and they would rather cut fat, not bone. Meaning, they’d rather protect their bread-and-butter IT infrastructure from being outsourced. And 3.The business considers projects initiated by IT to be less vital. Remember who pays the bills.

However, for business-driven internal enterprise Web 2.0 collaboration projects, I see growth. Why?  Because the business will find their collaboration needs to grow in 2009, while they see IT providing them with fewer services. Collaboration needs grow as a result of layoffs, mergers, and deepening external partnerships (requiring new infrastructure to collaborate outside the firewall with trusted, external partners).  And this happens while IT’s services shrink as a result of layoffs, a focus on streamlining operational costs, while not taking on new projects.

Who wins? The SaaS based collaboration vendors: folks like Box.net, GroupSwim, Jive, OneHub, PBwiki, SocialCast, Socialtext, and others who provide collaboration services in the cloud for about $5-$15 per user per month, give or take. These products range in functionality, where some focus on the wiki, others on the social network, and still others are more suited for file sharing within trusted groups. But these are easy pickings for business that are looking to circumvent IT and set up a small departmental solution. Especially in departments that are looking to collaborate with a few external partners.

The good news is that when the economy picks up, IT and the business can have a heart-to-heart talk and make some decisions about the future of the SaaS based content.  Some will leave it in the cloud if they continue to like the prices and features.  Others will revisit the brand-name collaboration options that are provided by the ECM and portal vendors. By this time, many of these options will catch up in functionality, providing a solution that will make both IT and the business happy.

And now, the battle. The story above works for companies that are willing to move to SaaS based products to address near term collaboration need in 2009. But many organizations cannot, or will not, allow themselves to house their intellectual property on someone else’s servers – no matter what the vendor says to assure them. This means that organizations with hard-line IT shops will face a battle between IT and the business for a collaboration solution that integrates with IT’s existing infrastructure, but requires little IT involvement.

Now, there are good on-premise collaboration tools in the market today that are poised to solve this battle – depending on what your IT infrastructure is. The challenge I see is that many of these vendors are not sure to whom they are selling their solution – to the business, IT, or the fragile partnership between the two. Remember, partnerships encounter stress during tough economies. It’s hard for IT and the business to work together when they are eying each other’s budgets.

You see my thoughts, so please share yours.  Given the current economy:

• Will you cut back on Enterprise Web 2.0?
• Will you deepen the divide between IT and the business?
• Or will you try to form a stronger partnership between the two?