Hi Dennis,
My apologies for the delayed response; I've been buried this past week with the Expo. I wanted to quickly take a minute or two and answer some of the concerns you raise here about the market sizing report I released earlier this week.
To respond to your first concern, how the market was defined, I first off agree wholeheartedly: how a market is defined is critical. In my case I sized the in a bottom up fashion, not a top down one, as I think you are assuming. Instead of trying to figure out the size of the enterprise Web 2.0 market ??? by the way, ZDNet in general seems to have misunderstood that I was not just sizing the "Enterprise 2.0" market as Andrew McAfee defines it but instead looking at both collaboration and productivity as well as marketing spend ??? I sized the individual technologies that are typically considered to be associated with Web 2.0. Specifically I looked at blogs, wikis, RSS, social networking, podcasting, mashups, and widgets. There was some debate as to what to include here ??? there are no RIAs or discussion forums ??? but I had to draw lines someplace. In addition I looked at each technology across two implementation types ??? internal facing and external facing ??? and three geographies ??? North America, Europe, and Asia Pacific. In all I created 42 little S-curves, and summed them up to one large number.
The second major concern you have, the assumption that major technology vendors will subsume Web 2.0 technology into other applications, is one that is clearly already playing out. Microsoft offers wikis and blogs in Sharepoint, Fat Wire is offering wikis, blogs, widgets, and podcasting in its Web content management solution, SAP is offering widgets and wikis, and so on and so forth for 20 other vendors. This trend will accelerate with two major consequences. First, in short order very few firms will need to specifically acquire Web 2.0 technology; in nearly all cases some vendor will have already brought it into the enterprise in one form or another and, even more likely, the enterprise will have more blogs, wikis, and widgets than it knows what to do with. Second, each vendor ??? with the major exceptions of Microsoft and IBM ??? will not offer these tools destinations in themselves as they are today, but instead will deploy them in context and as part of another process (I have a report coming out that articulates this point in the next couple of weeks). In this way we expect Web 2.0 tools to make existing processes more efficient. I again wholeheartedly agree that these tools are not some miracle salve that will solve major business process problems; they will make existing processes more efficient, warts and all.
I think in general what surprised me most, and where I think much of your concern comes from, is the notion that $4.65bn is a big number; it's not. In fact it is a terribly small number. To wit: Forrester expects that global corporate spending on technology will hit $1.7 trillion in 2008 (IDC and Gartner have nearly identical numbers). Software alone will hit $364 billion. My projection for Web 2.0 in 2008 is little over 0.2% of the software spend, and is not even worth pointing out for spending overall. While that proportion will grow over the next few years it still will not break 1.0% of the overall software market. Of that total, two-thirds is going to be external facing Web 2.0 spend.
I hope those details add some context to the report any my analysis, and I will be sure to send you a copy of the full report to dig into (if any other readers would like a copy as well just let me know at oyoung AT forrester.com). If you can't tell, discussing and debating this sort of stuff is one of my favorite things to do so thank you for the opportunity to discuss the finding and your contrarian view. I'm very happy to see your blog is not just another echo chamber!
The best of ZDNet, delivered
ZDNet Newsletters
Get the best of ZDNet delivered straight to your inbox
