Predicting the battle over collaboration infrastructure in 2009

Predicting the battle over collaboration infrastructure in 2009

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

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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?

Topics: CXO, Collaboration, Enterprise Software, Software

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3 comments
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  • This battle has waged for many years

    The battle between business units, whose focus is the success of their venture and IT, whose focus is to manage thousands of users, each with a different level of permissions, has dragged on for years. The advent of these new tools, which provide wikis and collaboration tools for little or no cost, is quickly turning the tide of the war back toward the populous.

    I worked for a solutions provider that sold connected products into a large corporate client. As an outside vendor, I would often need meet with all of the various groups involved in a project to deploy my products. Business teams would design and purchase our solutions, and then we would meet with IT to work out how we would integrate our connection needs into the network. When I first started I often questioned why we did not engage IT into the project earlier. I soon found that IT was often the deal breaker for many projects, usually projecting a cost to support the product that far exceeded that products' cost. So, business teams did what they thought was logical to get their needs met; they would get approval and funding for projects without involving IT, then pass it back to me and my team to "work" with IT to integrate. I often commented that the only time that IT and business teams sat at the same table was when I sat between them.

    The populous has now been empowered with tools to bring their vision to life without involving IT; at least not at the start. With many online collaboration tools costing little or nothing to get started, departments can add to their productivity without having to apply for funding as part of a capital budgeting process.

    The issue, which I have seen in several Fortune 500 companies recently, is that many of these tools either lack enterprise level security features or if they do include it, the department that implemented the basic version did not bother with implementing those features. In one example, I've heard from more than one company that they caught their employees posting links to internal company assets to their personal delicious account. Sure, you can argue that nobody outside of the firewall can retrieve that document, and while that is most likely true, now everyone can see the first few lines of that link. What would happen if an outsider tuned in to the delicious account of someone at yahoo only to see "Jim posted a link to: Yahoo December Layoff Plan Final.doc"

    So now the populous has sent a clear "shot over the bow" of the HMS IT. IT departments have little choice but to provide these tools to their employees or face the consequences mismanaged permissions.

    In light of this, I am inclined to agree with the author; I think we will see an increase in the deployment of collaboration solutions in large enterprise environments. In addition, we have to look at the productivity gains received from these products. Any increase in productivity, especially in this current economic climate, is going to be welcomed with open arms by senior management, regardless of IT support.
    mikediliberto
  • Security security security

    Good article. I just fail to see how corporate data can be considered secure when it resides outside of the corporate IT structure. Especially for institutions that have to undergo outside security audits from thier own customers.
    Keeping Current
  • Appliance model - the future of collaboration infrastructure

    I think collaboration service providers need to look beyond SaaS as a deployment model.

    The business applications don't necessarily have to be hosted with the vendor. The outsourced (IT management and infrastructure) support benefits of SaaS, can be easily replicated behind the company firewalls with the Appliance model.

    The appliance makes the decision process easier - management is happy as the intellectual property remains behind the company firewall and IT is happy cause it fits on existing infrastructure.

    cyn.in (http://cyn.in) offers a managed Enterprise appliance to customers who wish to secure their data behind their firewall. We've seen a consistent growth in enterprise collaboration requirements. Most of the businesses, prefer using the cyn.in appliance - they have complete control on the data and the software.
    romasha@...