Enterprise Web 2.0 Worth $4.6 Billion in 2013

Forrester Research today released a six-year Web 2.0 Market Forecast. From the report itself:

Enterprise spending on Web 2.0 technologies will grow strongly over the next five years, reaching $4.6 billion globally by 2013, with social networking, mashups, and RSS capturing the greatest share. In all, the market for enterprise Web 2.0 tools will be defined by commodization, eroding prices, and subsumption into other enterprise collaboration software over the next five years; it will eventually disappear into the fabric of the enterprise, despite the major impacts the technology will have on how businesses market their products and optimize their workforces.”

A definition before we jump into the discussion. Enterprise 2.0 doesn’t include pure ad spending dollars spent on services like Facebook, Blogger, or Twitter, instead counting productivity tools based on Web 2.0 concepts. So, Facebook as a whole wouldn’t count, but money spent on the creation and syndication of a Facebook app or social network widget would.

According to the report, social networking spending will take up almost half of the total, coming in at about $2 billion, followed by mashups, RSS, and wikis, all three of which total approximately $1.6 billion. From Larry Dignan at Between the Lines:

“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 yet 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.”

So, what are some of the issues this developing market will face? Sarah Perez at ReadWriteWeb explains:

“For vendors specifically, there are 3 main challenges to becoming successful in this new industry, including:

1) I.T. shops being wary of what they perceive as ‘consumer-grade’ technology

2) Ad-supported web tools generally have ‘free’ as the starting point

3) Web 2.0 tools will have to now compete in a space currently dominated by legacy enterprise software investments”

There are even problems with the definition of Enterprise 2.0 itself. From Dennis Howlett at Irregular Enterprise:

“[Forrester’s definition is] an incredibly loose definition and one that could be applied to any number of technology components from CRM through to supply chain management and pretty much anything in between. The fact is that with so many definitions floating around, I’m of the view that Enterprise 2.0 does not exist except in the minds of those who are selling technology components. That’s not a recipe for success.”

What’s the bottom line? The big picture seems pretty clear: the flexible communication and networking tools created in the past few years will probably find paying customers in the form of big corporations looking to become more lightweight. The interesting questions are how quickly it’ll happen, how much internal resistance there will be, and how they’ll be integrated into existing internal applications.

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