Enterprise 2.0 (whatever that is): Is this its year?

By Zach Church, News Writer 04 Jun 2008 | SearchCIO-Midmarket.com

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That said, 2008 may be the turning year, according to analysts.

"What I would expect, later this year and into next year, is companies diving in headfirst," said Joshua Holbrook, director of enterprise research at Yankee Group Research Inc. in Boston. Until now, he said, there has been trepidation.

"While there's been no shortage of buzz, there hasn't been a lot of stakes in terms of adoption," Holbrook said. "It doesn't match up with the buzz."

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Although Enterprise 2.0 has so far escaped a definitive definition, it is generally understood to be the business application of Web 2.0 collaborative technologies, including blogs, wikis and Real Simple Syndication (RSS).

So far, though, businesses have been hesitant. Concerns about security and reliability are status quo, regardless of whether they are founded. And the idea of collaborative software is so closely tied to the consumer-oriented Web 2.0 scene that Enterprise 2.0 faces a cultural barrier within businesses as well.

Holbrook said those barriers are falling, though, commenting specifically on the security questions.

"I think that people have come to grips with the fact that there is adequate security to host things remotely," he said. "I think people have come to grips with the fact that if someone really wanted to violate the trust of the company by sharing private or secure information, they could do it by email if they really wanted to."

Forrester Research Inc. analyst G. Oliver Young wrote last month that "56% of North American and European enterprises consider Web 2.0 to be a priority in 2008, and adoption of major Web 2.0 technologies is expected to grow at a healthy clip as a result." And a Gartner Inc. research paper from December is titled "In 2008, Enterprise Web 2.0 Goes Mainstream."

Steve Wylie, general manager for next week's Enterprise 2.0 conference in Boston, said there are signs of Enterprise 2.0 going mainstream. For starters, the event has grown. And though it began as the Collaborative Technology conference, organizers last year renamed it to Enterprise 2.0.

"Most of the major software companies are identifying Enterprise 2.0 as a very strategic area for themselves," Wylie said.

CEOs, CIOs, other executives, vendors, journalists, bloggers and analysts will all be on hand next week for what's being sold as both "Lead the Evolution" and "Transform Your Organization." It's the conference's fourth year.

According to Young's report, adoption of Enterprise 2.0 software is strongest in larger companies. Fifty-one percent of Global 2,000 companies are planning on buying Enterprise 2.0 software this year, according to the report. Compare that with 41% of companies with 1,000 to 4,999 employees, 33% of companies with 500 to 999 employees and 26% of companies with 100 to 499 employees.

In the small business realm, only 20% of companies are planning on an Enterprise 2.0 purchase this year, according to Cambridge, Mass.-based Forrester. And about half of midmarket companies say they aren't even considering a purchase.

"In many ways, Enterprise 2.0 software is better suited for SMBs than it is for large enterprise, but the irony is that SMBs or midmarket [companies] tend to be slower to adopt," Holbrook said.

Holbrook said he expects adoption in the midmarket to pick up as "bleeding edge" companies return from Enterprise 2.0 deployments with good results. Wylie agreed and said the conference this year will focus on case studies from large companies like FedEx Corp. and Pfizer Inc. The experiences of these companies could still be instructive for the midmarket, he said.

"If you can do what we're describing at Pfizer, then man, the rest of us should be able to figure this out," he said.

If you can do what we're describing at Pfizer, then man, the rest of us should be able to figure this out. Joshua Holbrook director of enterprise research, Yankee Research Group Inc.

Companies trying Enterprise 2.0 software will most likely use social networking programs from companies like Awareness Inc., Jive Software and Communispace Corp., according to Forrester. The analyst firm calls the Enterprise 2.0 market "small but growing."

Spending on social networking software by enterprise-sized companies in 2007 was nearly twice that of the next most popular type of Enterprise 2.0 software, RSS.

Spending was also strong for blog and wiki software, with mashups, podcasting and widgets less popular. Still, Forrester expects the entire Enterprise 2.0 software market to triple between 2007 and 2009 and triple again by 2012. The spending projections did not include small and midmarket companies.

The barriers to Enterprise 2.0 are still strong. But Holbrook said hostile attitudes toward the technologies are changing. This year, he said, Enterprise 2.0 just might break free of its buzzword status.

"I've seen a big shift over the last year or so where [Web 2.0] is becoming much more enterprise focused. It's no longer kind of a phenomenon. It's a trend that has legs and is not just buzz."

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