Two views of Web 2.0 in business
March 21, 2007
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.
Tomorrow, McKinsey will release the results of a broader survey of Web 2.0 adoption, and the results are quite different. In January 2007, McKinsey surveyed some 2,800 executives - not just CIOs - from around the world. It found strong interest in many Web 2.0 technologies but much less widespread adoption. McKinsey also looked at six tools. While it didn't include tagging, it did include mashups; the other five were the same. 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%).
North American companies haven't embraced Web 2.0 appreciably faster than companies in other countries, according to McKinsey. Although North American firms have been slightly more likely to invest in blogs and RSS, for instance, they've been slightly less likely to invest in social networks and wikis than their counterparts in some other regions. Perhaps the most surprising finding coming out of the McKinsey survey was that American companies are not poised to be the leaders in embracing Web 2.0 in coming years. If anything, they're looking like laggards. Leading the way are Indian firms, 80% of which plan to increase their investments in Web 2.0 over the next three years, compared with 69% of Asia-Pacific firms, 65% of European firms, 64% of Chinese firms, 64% of North American firms, and 62% of Latin American firms.
In another sign of what the future holds for Web 2.0 in business, the Forrester survey found a clear preference among CIOs for buying a full suite of Web 2.0 tools from a large, established vendor. 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." Web 2.0 startups hoping to make inroads in the enterprise market, even among mid-sized firms, will continue to face big challenges, particularly as the larger vendors release their own suites of tools or incorporate them into existing products. 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.
UPDATE: The McKinsey study is now available online.
Nick - you usually do far better than this PR BS reprint - what's up?
Posted by: dahowlett at March 21, 2007 09:46 PM
I agree with Dennis, where is you usual controversial analysis of the findings, as opposed to the copy and paste of the figures. What do you really think it says Nick, whats in between the lines?
Posted by: Al at March 22, 2007 07:39 AM
Thanks for the summary. Seems the enterprise still needs a lot more education on these functions and their business uses and values.
"... CIOs saw relatively high business value in RSS, wikis, and tagging and relatively low value in social networking and blogging," says the Forrester report.
" ... McKinsey ... 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%)."
This shows confusion or lack of full understanding. For those CIOs answering Forrester's questions, what do they suppose they will be distributing via RSS, or building using wikis, or tagging? It's rich content, of course, which is newly and easily created and mined from the enterorise knowledge ecosystem using blogs, wikis and podcasts. These pieces all fit together in a whole greater than the sum of the parts -- and the whole is about publishing prolificly in ways that can be widely and easily found and digested (using the parts).
Enterprises that publish well using these tools and web-based disrtbution efficiencies can have many advantages. But the content and the tools are inter-dependent for success.
The CIOs may not get that yet. These tools are a means, not an ends. The ends: inexpensive global/long tail communication, marketing, search ranking benefits, and community development and involvement. The same survey should be given to the marketing executives -- who may get this more than the CIOs at this juncture.
The better question to ask is, how do the marketing and knowledge management leaders in the enterprise want to best avail themselves of these tools? The answers to that should then be taken to the CIOs for them to best provide the functionality, as SaaS, best-of-breed, or via established vendors and on-premises suites.
Posted by: Dana Gardner at March 22, 2007 09:19 AM
I find it very ironic that CIOs want to purchase a their innovative, disruptive, distributed information tools from a single, monolithic vendor. Purchasing repackaged open-source tools from a giant software company would probably ensure that I will need to purchase something else from them in the near future. However, I am not sure it would ensure that my business would be any more productive.
Posted by: Morgan Goeller at March 22, 2007 10:25 AM
Dana's right. i.e. These tools are a means, not an ends. CIOs purchasing the latest and greatest tools by 15 percent-ish is well... what they do for a living.
Think of it this way: The guy who heads the organizations transportation is going to buy x number of new cars this year. And what does he intend to do with 'em? Well, fix 'em, of course.
Posted by: Amanda Chapel at March 22, 2007 10:57 AM
Well, despite what's written in the other comments above, what is reported by McKinsey is spot on for my market place. I work in creative services with agencies doing PR, advertising, direct marketing and digital. Believe it, digital agencies are frequently the worst offenders. They write fab code for others' sites but theirs usually are pretty poor.
Posted by: Rebecca Caroe at March 25, 2007 04:13 AM
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