Ross Mayfield's Weblog

Gartner Magic Quadrant for Enterprise Social Software

Gartner Research released the first Magic Quadrant report on the Enterprise Social Software market this week.

This is a pretty big milestone in the development of the Enterprise 2.0 category at-large.  Just a few years ago, the only analysts covering the space were blogalysts.  Now, perhaps the most rigorous and influential vendor analyst reports in enterprise software says it really is enterprise software. The analysis rightly says we all have work to do.

It also says that Socialtext is the most visionary provider and behind only Microsoft, BEA and IBM in execution.  This tells me that if we want to be the leader we need to demonstrate better execution (mind you, I'm not taking out IBM next year, but it is good feedback).  SuiteTwo, of which we are a core component, also scored well in vision but has a way to go in execution.

An impassioned scandal that could really change us, for the better?

I wanted to add a non-personal comment about the impassioned scandal rocking our community, the best way I could think of to improve the silence. 

This is a real test of the blogosphere.  Our culture and openness.  We don't know all the facts, but there is enough to be disgusted.  We do know that part of this involves real core and dedicated bloggers.  We do know that this involves trolls, there will always be trolls, and we all have them.  We do know that some speech is illegal for a reason, and sociopaths run against society, but there are slippery slopes in all directions from the hill we think we have climbed.

There are core issues at stake:

• Being safe is something most everyone can agree is a right.  Most of this is governed by laws in our respective jurisdictions and our jurisdictions tend to respect each other when it comes to violence and threats, where there is the rule of law. Being safe is the lowest common denominator for why we have government, and however, it can slip into degredation of our civil rights.
• Being anonymous on the web matters.  Some believe it shouldn't be a right and we should embrace the panopticon.  But this is an undeveloped tangent of how the web meets the world.  Whistleblowing can help, security maelstorms can hurt.  Pseudonymity may indeed be needed, say to protect the real world identity of the editors of Wikipedia pages on topic of conflict.  But trusted brokering of these identities is, again, underdeveloped, in communities, the private and public sector.  Today one with means can attain anonymity, but others with means can reveal, such as a law enforcement officer with an ISP search warrant or more empowered agencies.  The rule of law does draw the line for certain abuses of identity, but it is completely undeveloped for protecting your most basic identity.
• Being open on the web matters.  Transparency is good.  Society values it more every day and it the underlying force field of the blogosphere.  But it is rare to hear horror stories of being too closed, and frequent for being open.  Maybe being to closed makes you unheard to begin with.  Maybe it means isolation which is our greatest fear.  Maybe it also means corruption when conspired.
• Being free with speech is both what makes us great and makes us go too far.  Not only do we each have speech as a widely understood right, but the power to publish that we don't understand. When speech crosses over into action, or the threat of it, rules are largely in place.  But it is societal norms that govern the grey area.

Which is why I'm blogging this.  It turns out that it is personal, in that I want to bring attention to Kathy's post.  And that I need to blog this help sort out my own feelings.  Part of me wants to scream FUCK YOU to the people who have assailed our norms.  Part of me wants my community to sustain, to find what is common and what is wrong -- to feed back the hate without breeding hate.  I want this blogosphere to surround and comfort, not harden a reaction to an extreme by institutionalzing an even worse extreme.

UPDATE: Frank Paynter, Kathy Sierra responds, Jeanane Sessum, Doc Searls, Rage Boy and Alan Herrell

Being the Choice Leader

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,


• availability.

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.

Abundance, and Five Years of Blogging

When I sat down in my first economics class at UCLA, the professor wrote on the blackboard all we would learn, in really big letters:

SCARCITY

I've been blogging for five years as of this month, and here's what I've learned:

ABUNDANCE

I have discovered I have a lot to give.  And when I give, I notice others give more.  Some of them I've formed relationships with, and trust opens giving, but I have also learned to trust strangers to share in abundance.  Life is iterative, markets are not transactions and scarcity of attention is false. Our learnings compound abundance and there may be no limit to what we can produce.

David Hornik strikes again with Chris Anderson Strikes Again: The Economy of Abundance:

The basic idea is that incredible advances in technology have driven the cost of things like transistors, storage, bandwidth, to zero. And when the elements that make up a business are sufficiently abundant as to approach free, companies appropriately should view their businesses differently than when resources were scarce (the Economy of Scarcity). They should use those resources with abandon, without concern for waste. That is the overriding attitude of the Economy of Abundance -- don't do one thing, do it all; don't sell one piece of content, sell it all; don't store one piece of data, store it all. The Economy of Abundance is about doing everything and throwing away the stuff that doesn't work. In the Economy of Abundance you can have it all.

I trace a lot of my thinking about abundance to Jerry Michalski's, here's a small chunk of it:

It drives me nuts that scarcity is seen as such a fundamental requirement for creating a business. Sure, there are plenty of businesses built around scarce resources, and sure, Dave's time and my time are scarce, but that's no proof that businesses can't cruise along profitably creating voluntary loyalty by knowing their customers better, never betraying them, always being available and fixing problems, responding more quickly than others.... you get the picture. But go to business school and what they teach you is how to create artificial scarcity. That's the kind of thinking that got us into the present mess.

Digging deeper, Howard Reingold is fostering a discipline of cooperation studies. You can also find this wiki page, with a link to a 1994 essay by Flemming Funch who I used to blog alongside a lot in the early days.

I suppose that abundance economics would include giving one's ideas and actions freely, because one feels like it, because one sees the need for it, and because one understands that when you contribute to the whole, we all benefit.

The Internet is a good example of some of the principles of giving freely and of abundance. So many resources here are given freely, without expecting anything directly in return. So many people are willing to help each other, even though they don't really have to and they don't get "paid" for it.

I think there are many times more power in actions that are done freely, because one sees a need for improvement, than in actions that are done reluctantly, because one is forced by lack.

I believe that abundance thinking, and actions, trumps the minds and greed of the scarce.  That the one overarching pattern in the present wave of innovation is share control to create value.  That what powers it isn't Moore's Law processessing infinite supply or Metcalfe's networking choice and collective wisdom.  It is the capacity of people to produce when old frameworks don't in the way of each other.

So much of this is about how we envision the future.  Not in the grand sense that the rules are changing.  But when two or more people can believe in an opportunity, they can share cost and risk to get there together, in the process reduce them -- and learn so they and others can build upon it.

Between Popular and Personal there is Social

Every time I see Gabe Rivera of TechMeme, I ask for the same thing -- MeMeme.  Give me TechMeme where the core index is based on who I read, about 150 people at any given time, to show me what my friends are interested in.  I used to ask this from people who make Newsreaders.  Because simply somedays you are too busy to read everything, but you want to make sure you haven't missed something big.  That's the real value I derive from TechMeme today.  But what I really want find something that is big with my friends, which in the larger blogosphere is actually something small.

Today we have two new and seriously great kinds of attention tools.  Newsreaders give us the ability to personally personalize.  Combined with persistent query feeds, you can follow the people and things you know you want to read.  Similarly, social networking services with a purpose let you aggregate the objects of your friends, be it pictures with Flickr, or posts with Vox.  Tagging then lets you pivot for social discovery, but that is digging deeper than you often have time or interest for.

TechMeme and others show us mass popularization.  Different communities help things bubble up.  In Social Software, you first saw this with Blogdex and DayPop.  What in the blogosophere has the most attention within a given time period.  Now we have Digg, del.icio.us/popular, Reedit, Netscape, Technorati, YouTube, Dabble, Last.fm, Flickr Interestingness and a gazillion other increasingly rich examples.  This is a Wisdom of Crowds we couldn't gain before for discoverable knowledge.

As an aside, I wonder how original Slashdotters feel about Diggers' favor for a popular  answer rather than a leading question.

So more concisely, what I hope develops:
* Tools that let me personally personalize should give me just one more degree of interestingness and popularization. 
* Tools of mass popularization should give me social popularization

Since Flickr has both kinds of attention tools, let me give specific suggestions for extension.  For within My Contacts's Photos, show me the most viewed, favorited and commented by my contacts.  Then show me the most viewed, favorited and commented pictures by my contacts in Everyone's Photos.

Now, this is just one user's greedy suggestion, and there serious usability and algorithmic challenges to overcome.  But what I'm getting at is part of the future of media.

The other night I watched the evening local news broadcast for the first time in a while.  Its funny how local news attempts to localize national news.  The idea is that if they show you a Mom in the Bay Area of a Soldier in Iraq, you can relate to that and it brings the story home.  But unless the story originates from that Mom or Soldier, it is just an overlay with too much of a contextual shift.  Similarly, when an item of local news is made national -- it is too shallow for our local tastes and we are attracted to it simply because or fair city is made popular. 

I empathize with the expert editors behind these mass media and their attempts to connect the interesting for me, when me is lost in a demographic.  But I've had a taste of going direct.  When I carry the burden of discovery, and float around YouTube's popular and related clips, I can compose a broadcast for myself.  The outstanding political commentary, funny stuff and best soccer highlights from around the world.

But after a long day of work, I'm tired, and want the network to work for me.  Cue up not what is popular, or what the people I subscribed to produced.  Cue up what my social network has found interesting.  At any given time it may be local, national, international, topical or mundane.  Of course, in the process of actively consuming it, I'll leave behind breadcrumbs of attention to make it better for my friends.

UPDATE: I've been ranting about this for years.  Sam Ruby hacked together a nifty MeMeme and the result shows a clear and simple foci of attention (a post by Spoksky at last glance), FeedDemon has something in the works and Tailrank has something close.

The Business Blogging 500, Wiki Powered

Chris Anderson (Wired/Long Tail Blog) kicks off an open research project:

Short Form: In collaboration with Socialtext, we've created a wiki that tracks which of the Fortune 500 is blogging. Check it out here. 

Jason Calacanis already did by contributing Time Warner Inc (he should know), increasing the count to 14 of the Fortune 500, or 3%:

Blogging F500 Company	Sample Blog
Amazon.com Inc.	Amazon Web Services Blog
Avaya Inc.	2006 FIFA World Cup Blog
Avon Products, Inc.	Beauty Dish
Cisco Systems, Inc.	Cisco High Tech Policy Blog
Dell, Inc	Linux Engineering
Electronic Data Systems	EDS' Next Big Thing Blog
Ford Motor Company	2005 Mustang Blog
General Motors Corporation	FastLane Blog
Hewlett-Packard Company	HP Blogs
Microsoft Corporation	MSDN's Microsoft Blogs
Motorola Inc	Motoblog: 4 bloggers & a phone
Oracle Corporation	OraBlogs
Sprint	Things That Make You Go Wireless
Sun Microsystems Inc	Jonathan Schwartz
Texas Instruments	Video 360 Blog
Time Warner Inc	AOL Blogs
The Boeing Company	Randy's Journal

Chris (and Doc) may be on to something about observing the correlation between F500 blogging and stock performance.  But at the least, this can serve as a renewable resource for informing social software adoption.

Happy Blogiversary

Huh, I've been blogging for three years as of October 14th 2002.  Can't believe it's been that long or short. I usually notice because I started at the same time as Jim and Liz.  And this is where I tip my hat to Kevin for inspiring me to start.

Content Industry Outlook

Notes from an industry overview session at the Buying and Selling eContent conference in Scottsdale, Arizona.  I just arrived so I might have missed a little of the intro, and already missed David Weinberger's keynote (podcast).  Here's what I didn't miss:

Rafat Ali, Paid Content (pictured Podcasting the session later)

M&A and Venture Deals: M&A came back over the last year.  On the B2B side most of the activity is focused on the business database.  On the VC side it is about organizing, organizing RSS feeds, tags (as noted in David Weinberger's keynote). 

Open Source Media Ethic: Convering of consumer and the open source media ethic (being open to different sources of information and trying to incorporate into your company to use other's expertise).  Notes the Business 2.0 article I read on the plane on open web services.  For media and business information companies, using search data and open APIs, its a hot area. 

Becoming the Center of Gravity:For media companies, new models to contend with.  My site is a blog, pure news aggregation, news intelligence service.  We are doing well compared to to become the center of gravity.  The reason for my existence is to send people to other sites.  How to incorporate social tagging?  Look at InfoWorld's use of del.icio.us.  Aggregation and vertical search, custom branded news readers (Guardian, News.com) lets you become the source of information for your topic using all the resources out there.

Content packaging and distribution: new opportunities, especially mobility.

John Blossom from Shore, a research and advisory services for the content industry.

Content and technology plus people to get high human input and value, high productivity and high content value.  Publishing has moved from being a black art to being a pervasive tool with things like weblogs.  From where content was a rare commodity to raining content and a challenge of extracting value with abundance.  The Star Wars kid video with 15 million downloads and lots of remixes.  Google News takes content from premium sources and creating context for it that is of greater value.  "Good content is where you find it."  Database era meant you had to go log in to get it, now entire libraries of content go where they want to go.

2005 is about the 4 Cs.  Cooperation, Commercialization, Containerization and Consolidations.  Cooperation: publishers, advertisers and search partnering around highly contextual audiences, authors and markets (weblogs, wikis and social networks), institutional clients and content technologists, instiutions and public content outlets.  Commercialization: Google Scholar, Rich Data mining technologies, monetizing in open contexts (Reuters.com, BBC/Moreover, CCC, ValeoIP), empower users as aggregators (RSS, desktop search, iPod, Weed, collaboration tools). Containerization: more options, DRM is the beginning of letting content be useful, but a taboo word, eBooks growing.  Consolidation: Collapse of quality mass print circulation, titles search for identity in a search-centric ad world, huge multiples for key companies that fit (Capital IQ for functions, MarketWatch for ad pages).

Winners

• monetizers of contextual value
• close to the user
• leverage affordable power of publishing
• source-agnostic content integrators
• licensors creating useful content objects

Losers

• product centric (vs. user centric
• under investors in content technologies
• anyone wishing that it would all be simple again

Jeffrey Dearth of desilva phillips provides an investment banker's perspective.

Customers are in control.  Search engine disruption: Google scholar, library and news -- look at their acquisitions to see where they are going in fulfillment of their mission statement. Google informs reader and advertiser, the brand equity belongs to the search engine.

Tradition information providers are consolidating (Thomson, Lexis-Nexis, McGraw-Hill), feeding frenzy for eyeballs.  Traditional publishers scrambling to position themselves online (NY Times, WSJ, etc.).  New media companies buying strategically (i.e. InfoUSA, Google, IAC), private equity firms are flush with cash and targeting content companies, banks are providing great debt leverage to fuel higher multiples. 70% of the revenue for AskJeeves is driven by Google, he doesn't understand the billion plus valuation.  Oneline ad growth an gaining share of market, 20-30% growth next year, while the B2B publishing market is only growing at 4% -- pick which market you want to be.  2005 is going to be one of the best years for eContent in M&A, a seller's market.

What's hot:  New Vertical Aggregators, lead generation such as franchise solutions that arbitrage google keywords, SEM/SEO/Affiliate network companies, vertical search/local search, rich media, blogs & RSS, business/financial data.  "Technorati likely to be snapped up one of these days, at least that is the rumor." 

Case study with Carroll Publishing: used to have to lug big manuals around, now its on the web and his biggest customer is a 411 lookup directory that sells oursourced services for mobile telephony, paid $0.02 per lookup -- shows that you don't know what new markets you will find until you make your information available in a user friendly way for others to use.

Janet Ligget, Pfizer, representing content buyers

The mission of our information management group is to provide information and knowledge from employee to patient.  Most popular resource she provides is electronic journals.  Challenges for content buyers: cost and price structures, integrating information, access and some big changes on the horizon.

Cost and Price structures is a boring topic that wont go away. Budgets are relatively flat. Monopolistic market inhibits innovation in pricing structures: site based pricing (doesn't work for them, people are remote and travel all the time), named user pricing (restricts agility, creates a burden on the buyer to manage user IDs, we don't want to spend our resources managing your products), and unpublished prices (when rationalizing licenses in a merger the variation in prices are really unrelated to the product and more to the skills of the negotiator).   Site pricing works for small companies, but when you consolidate locations it doesn't necessarily reduce prices.

Note: these points are eerily familiar to other commoditizing industries.

Integration information: breaking down information silos is a user demand, information needs to be in one place for users (need to search across silos.), single vendor solutions don't work, integration external information with internal information.   Want to bring in XML feeds and not use your interface, want to use our own linking tools and provide access on our site.  Want to bring in content with metadata attached to it that is industry specific. 

Access: Buyers want sellers to endorse and comply with standards -- even promote them such as Open URL and CLI.  Buyers need to use information in new ways (text mining, personalization, search across resources, search fulltext).  User Names/passwords restrict agility.

Big Changes: Open Access is a revolution in pricing structure, institutional repositories provide new challenge in finding information, author archiving.  It stands things on its head and encourages cost to be moved away from the reader, an important feature regardless of who pays for it eventually.  Senior Scientist leaving Pfizer, but wanted to continue working in academia and asked if its possible to continue accessing their archive, but licensing makes it impossible, so a retiree that we want to keep working as a society is restricted from doing so.  This is why Open Access matters. Google initiatives provide other important opportunities.

Chuck Richard, Outsell, representing the content seller

Think of the room as having suppliers, some disruptors (hi!) and consumers.  IT becoming more personal, migration from consumer to business and business to consumer.  Red Sox interlude. MLB.com is an advanced media site, is the best use of content driven from the user point of view: look at the statistics and the box score with a player's name and a number of runs linked to get the video clip of the player hitting the run.

RSS & blog experimentation will continue and evolve in ways we can't predict.   This is a new tipping point in the industry.  Already pulling some of the ad revenue, will pull in other revenue as well. 

Worldwide B2B information industry revenue $280 Billion with 9% growth in 2004.  Outsell 100 is 53% of the industry, tracked quarterly, revenue growth 12%,  approximately where it was in 2000.  If you take out Google and Yahoo it removes 4% of the growth.  Rates for online advertising is not in parity to CPM, although online is arguably more effective, prices will continue to rise.

Buyers, or readers, over the last few years have changed their preferred method of obtaining information used to be 68% seeking it out yourself, now 51%.  Search and RSS aggregation is a time sink." (Note: bullshit)  Overload is increasing: 8 hours a week in 2001, 11 hours a week now gathering and analyzing, some increase in the relative time gathering.   Users increasingly turning towards their Intranet (10% shift).  Good news is people are looking for direction and help.  What is making the news on disruption isn't effecting economics yet (one survey says barely anyone wants information delivered to their PDA compared to other devices).

Note: Lots of Fear and Loving in Google.  Complete misunderstanding on productivity of blogs and aggregation.  Demanding buyers in a commodity industries in a position to drive commoditization.  Hot and changing market with big shifts underway, perhaps with fundamentals changing faster than private equity models can keep up.