Nick Carr reports on two studies of Enterprise 2.0 adoption by large enterprises:
Some hard data is coming out this week on the adoption of Web 2.0 tools by companies. Yesterday, Forrester released some results from a December 2006 survey of 119 CIOs at mid-size and larger companies. It indicated that Web 2.0 is being broadly and rapidly brought into enterprises. Fully 89% of the CIOs said they had adopted at least one of six prominent Web 2.0 tools - blogs, wikis, podcasts, RSS, social networking, and content tagging - and a remarkable 35% said they were already using all six of the tools. Although Forrester didn't break out adoption rates by tool, it did say that CIOs saw relatively high business value in RSS, wikis, and tagging and relatively low value in social networking and blogging.
McKinsey did a broader survey of 8,300 executives with similar demand and adoption patterns:
It found that social networking was actually the most popular tool, with 19% of companies having invested in it, followed by podcasts (17%), blogs (16%), RSS (14%), wikis (13%), and mashups (4%). When you add in companies planning to invest in the tools, the percentages are as follows: social networking (37%), RSS (35%), podcasts (35%), wikis (33%), blogs (32%), and mashups (21%).
But the highlight of the Forrester study for Nick and Richard MacManus is CIO attitudes towards incumbent vendors vs. startups.
74% of CIOs said they'd be more interested in investing in Web 2.0 if all the tools were offered as a suite, and 71% said they'd prefer the tools to be "offered by a major incumbent vendor like Microsoft or IBM [rather than] smaller specialist firms like Socialtext, NewsGator, MindTouch, and others."
Nick concludes: "You can bypass the CIO on a small scale, but it's difficult to bypass the CIO when it comes time for a company to standardize on a particular product and vendor." Yup. It has always been the case for enterprise software.
CIOs of large enterprises will largely give preference to the incumbent vendors they have relationships with to realize economies and standardize architecture. Especially when almost all of their budgets are sunk with maintainence fees of said incumbents. Part of expressing preference for suites is that suites are now available, beginning with SuiteTwo (Socialtext, Six Apart & Newsgator best of breed core offerings). I find the results of the survey very encouraging -- that SuiteTwo is a comparable preference to Microsoft or IBM.
Some CIOs will go what what (or whom) they know and stick to existing vendor relationships. That's why we created SocialPoint for the best-of-breed wiki to work with Sharepoint. As Lawrence Liu from Microsoft said: "More and more SharePoint customers who want advanced wiki functionality are looking to the specialized wiki ISVs like SocialText to provide it with an integrated user experience in SharePoint by way of 3rd party webparts."
As I've said before, when competing in a market of abundant choices, you have to be the choice leader. Choice is good. In some cases, you create choice through channels and partnerships. But you also have to do so through your core offerings. Today we have more deployment options than any established or upstart vendor.
- Managed Service Appliance (SaaS behind the firewall)
- Dedicated Hosted Appliance (here is a good introduction to Appliances)
- Custom On-site
- Hosted Professional
- Hosted Personal (free)
- Open Source
Part of why we have choice is not all of our customers are CIOs of large enterprises. Lee Bryant of explores choice and the convergence of SaaS and Enterprise 2.0 in Bottom-up and inside out - the future of enterprise IT?
Euan's subtle insight on how to do Enterprise 2.0 is that there are powerful grassroots energies to not only tap into, but if you impede them you risk your deployment more than anything. While there is a certain inevitability of Enterprise 2.0 proliferation thanks not only to SaaS, but namely open source, his message is less about the tools than the demand for them and practices that make it work.
Dion Hinchcliffe explores this and notes "Those that represent to be doing Enterprise 2.0 solely through tool rollout and no infrastructure remediation will almost certainly be among those reporting less encouraging results."
This is all in the context of the alternative to how this post began. Besides large enterprise CIO preferences, there is the bottom up. And smaller companies.
Lee discusses the challenges of a completely bottom-up approach:
On the technical level, the integration challenges are non-trivial:
- identity / Single Sign On (SSO);
- internal application integration;
- legislative obligations for data retention, privacy and audit; and,
But the integration of people, practise and (dare I say) process is even harder, with challenges such as:
- devolving responsibility and promoting a DIY culture;
- encouraging people to grow their own internal and external networks;
- stimulating conversation and debate by overcoming fear of exposure; and,
- for many people, simply overcoming the idea that any form of online communication beyond email is "not part of their job."
Those challenges become opportunities when you have buy in from the top down and IT supports. And when you have actual leadership, as Suw Charman noted: you have the best adoption strategy. Lee specifically explores SaaS and rightly notes that it isn't a fit for many enterprises that have customization needs. He sees two trends in SaaS that have potential to close this gap:
The first is in the area of specialised appliances or systems that live inside the firewall, where they can happily integrate with internal apps ad data, but which can also be updated and fed by managed connections that extend outside the firewall. The Socialtext managed appliance seems to be a good example of this approach, which is a workable compromise between SaaS and purely internal systems.
The second area is enterprise software that takes advantage of managed connections with web services to add value to internal systems. Movable Type was a pioneer of this approach with its blog ping service to feed a public list of recently updated MT blogs. Their impressive roadmap for the enterprise version of this market-leading blog platform suggests they will take this a lot further in MT v4.
You really should go read his post, at least for the Star Wars metaphor. He concludes that SaaS still has a way to go:
...But the emphasis will shift from software, which is just a mechanism, to services, which is the actual product. Some of these will be new and imaginative forms of what we might recognise as applications, but many will be pure data or data transformation or sharing services. But whilst we will see adoption among SMEs for cost reasons, enterprises will not embrace SaaS for their mission critical systems or data until such a time as we find robust solutions for the key integration and data management challenges.
I see promise on resolving some of these challenges for the enterprise from innovations borne on the web. OpenID is a good start for identity and authentication, and will find its way into the bowels of enterprise directory authorization. RESTian APIs are shaking up pre-conceived notions of SOA. Open Source provides more options for not only these challenges, but is the dark horse for Enterprise 2.0 the adoption race.