Is Enterprise 2.0 a Real Trend, or a Bubble That Has Burst?
Posted by Bob Warfield on October 21, 2008
In down times there is always a morbid curiosity, call it a death watch even. Which companies are really just bubble babies (a delightful phrase coined by MDV venture capitalist Nancy Schoendorf) that can only exist in frothy times and which ones represent real trends that will last?
In particular, what about Enterprise 2.0, which I see as the trend to Social Computing for Business? This all started for me with the Forrester prediction that Enterprise 2.0 prices would be slashed, as reported by RWWeb. The article immediately launched a discussion among the Enterprise Irregulars who largely couldn’t understand what Forrester was talking about since most E2.0 apps were already dirt cheap compared to products like Sharepoint that Forrester predicted would take over. Just as the discussion was taking off, we got word that Jive was laying off 1/3 of it’s workforce, which added quite a lot of fuel to the fire.
Jeff Nolan of the Irregulars really nailed an important issue when he commented, “there is enormous price pressure that reflects a marketplace less then convinced with the ROI of the services/products.” It’s true, not many E2.0 companies are selling hard ROI. The trouble is that most of them are horizontal tools or platforms that don’t solve a particular business problem, so it’s hard to derive an ROI for them. Forums and Wikis are common examples. In isolation, they have no ROI, it’s a question of having an ROI when they are applied to a particular problem.
Of course no new trend like E2.0 or SaaS is complete without the usual contingent of curmdudgeons. In this case Sarah Lacey (she of the “blew that interview with Zuck” fame) was front row center suggesting E2.0 “have fun RIP’ing”, which spurred further Irregular discussions. Where there is Sarah being a curmudgeon, there is usually also Nick Carr, but this time I looked and couldn’t find his E2.0 demise prediction, so perhaps it is yet to come.
There is no shortage of other quotes along similar lines though:
- The WSJ reports that the infamous F–kedCompany.com is back, and calls it another sign that the Web 2.0 bubble is bursting.
- Micro Persuasion quotes a Forrester report that says RSS usage has peaked at 11%. Are there really no more than this that can master RSS? People want feeds. The more information there is on the web, the less time we have to go see if something has changed. That trend will only accelerate.
- Tim Bray says that the poster children of the 2.0 era are largely frivolous. He wonders where the 2.0 offerings are that help when you can’t afford frivolous. He suggests bright young kids with cool tech ideas aim low. He wants to know how 2.0 companies save money or help with problems. BTW Tim, saving money and helping with problems is a great elevator pitch for exactly what Helpstream’s Customer Service Community offerings do.
What really got my blood pressure up and the synapses firing was one EI who said of Sarah Lacey’s article, “I totally agree with her! I bet at most, 3 survive independently as bigger companies, many get consumed, and many will operate as lonely niche players.”
Others agreed, which prompted me to respond:
It will all hinge on the definition of E2.0. In some senses, the naysayers will be right. In others, very much wrong.
The web is a huge communication channel, fully on par with any other, but younger and growing much more rapidly. You only have to look to Google’s results yesterday <Google reported good earnings in a lousy economy> to see that the web can change everything. Every aspect of how companies do business with each other, their partners, customers, employees, and any other entity will be impacted before it’s all over.
Do only a few companies own every aspects of how telephones affect business? Even just mobile? What about snail mail? You name the channel, and the web has a role to play. Paper versus electronic? We just talked about that vis a vis O’Reilly <who shipped a white paper on wood pulp instead of electronically>.
Very little in the way of Enterprise Software has properly understood the potential impact the web has on that niche or how to even begin to respond to it.
So, will generic Wikis, Blogs, Forums and the like devolve into just a few companies with most of the players going away? Sure, but there is a lot more to E2.0 than that. We’re barely getting started understanding what it all means.
I was just at a sales call today with a major name brand public software company that is trying to understand how the web should impact their Customer Service and the ability for customers to impact with them in general. They were so early in the evolution of their understanding that they hardly knew how to ask the questions, yet their appetite for answers was ravenous. When they saw what is possible with software like Helpstream’s that combines traditional Customer Service functions like Case Management and Knowledge Bases (plus a business process platform ala Remedy et al) with Community, the light bulb finally went on. They were throwing out ideas so fast we could barely keep up, LOL.
The secret is in how E2.0 integrates with existing business processes so that the whole is greater than the sum of the parts. We’re still in our infancy in seeing companies that approach the problem that way rather than with generic forums and such.
I feel very strongly about that. The web changes everything. We’ve seen it do that already. Why do we doubt that trend will continue?
The answer is right in front of our eyes: many who argue against aren’t really first class web citizens themselves yet. They think of the web in old fashioned terms. The web is much more than another way to do X. It is a way to do entirely new things not even possible before as well.
Consider these more positive thoughts:
- Jeremiah Owyang via David Armano: “Most companies treat social media like interactive marketing which is computer to consumer, social media is people to people”
- Per Gartner via Larry Dignan: Social Networks are one of the Top 4 technologies that are major trends, that can save you money, and they may not even cost you very much.
- My company, Helpstream, is partnered with Oracle as one of a handfull of Inner Circle CRMpartners precisely because we embrace the Social while they embrace the Enterprise. Oracle understands that a real multi-channel strategy for CRMmust include the web, and that it can’t do so without Social Software. Moreover, they’re getting real traction with large customers around this notion. I’ve seen the leads and been on some sales calls. It’s a real trend.
Or, consider the post that finally got me off my duff to write this. Susan Scrupski does a wonderful job of showing us how there is a new demographic emerging that just thinks about the web radically differently than most of us. The title of Susan’s piece is misleading. “The trouble with Social Media is, well, people,” implies that there is a problem. Read the article. You’ll see that for this new group, there is no problem. Social Media just is. it is an important part of their lives, and one that feels absolutely natural to them and which they’re unlikely to ever give up or stop using. Quite the opposite.
So there are two driving trends for E2.0. The first is its potential to unlock ROI. The second is that it is riding on a demographic wave that is inevitable. It is a first class channel that cannot be ignored. Large successful organizations like Oracle are seeing it as such. Don’t assume they’re wrong lest you be relegated to the ranks of the curmudgeons.
Funny how this got to be a bit of a manifesto, but the common threads are everywhere to be seen and they stewed to make a potent brew.