Forrester: Global Enterprise Web 2.0 Market To Reach $4.6 Billion By 2013

Mon Apr 21, 2008 8:00am EDT

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CAMBRIDGE, Mass.--(Business Wire)--
Despite a long-term future marked by commoditization, enterprise
spending on Web 2.0 technologies will surge over the next five years,
growing 43 percent each year to reach $4.6 billion globally by 2013,
according to a new report by Forrester Research, Inc. (Nasdaq: FORR).
The five-year Forrester forecast includes a breakdown of future
business spending on technologies such as social networking, RSS,
blogs, wikis, mashups, podcasting, and widgets, as well as an analysis
of enterprise Web 2.0 spending across North America, Europe, and Asia
Pacific.

   Forrester believes that Web 2.0 technologies represent a
fundamentally new way to connect with customers and prospects and
harness the collaborative power of employees. Large enterprises such
as General Motors, McDonald's, Northwestern Mutual Life Insurance, and
Wells Fargo have all made heavy use of these tools, and 56 percent of
North American and European enterprises consider Web 2.0 to be a
priority in 2008 according to a recent Forrester survey.

   "Software firms can make money selling enterprise Web 2.0
software, but it will not be an easy road to hundred-million-dollar
run rates," said Forrester Research Analyst G. Oliver Young. "The
market for enterprise Web 2.0 tools will be defined by
commoditization, eroding prices, and incorporation into enterprise
collaboration software over the next five years. It will eventually
disappear into the fabric of the enterprise, despite the major effects
the technology will have on how businesses market their products and
optimize their workforces."

   The key question for software firms is who pays for Web 2.0 in the
enterprise? Three challenges face vendors: IT shops are wary of what
they perceive as insecure, consumer-grade technology; ad-supported Web
2.0 tools on the consumer side have set "free" as a starting point;
and Web 2.0 technologies enter a crowded space dominated by legacy
software investments.

   Currently, large businesses are spending more on employee
collaboration tools than customer-facing Web 2.0 technologies, but
Forrester expects that trend to reverse by next year. By 2013,
investment in customer-facing Web 2.0 technology will dwarf spending
on internal collaboration software by nearly a billion dollars.

   "Social Computing and Web 2.0 marketing are still in their
infancy; and in general, the market is still in an experimentation
phase," said Young. "In the long run, the affect of Web 2.0 will be
enormous. But what may prove to be of more value to vendors will be
the skills of running a successful software-as-a-service (SaaS)
business. For the vendors that do it well, disaggregating expertise
about the medium from Web 2.0 content is likely to provide far more
value than wikis and blogs ever did."

   "Global Enterprise Web 2.0 Market Forecast: 2007 To 2013" is
currently available to Forrester RoleView(TM) clients and can also be
purchased directly at http://www.forrester.com/go?docid=43850.

   About Forrester Research

   Forrester Research, Inc. (Nasdaq: FORR) is an independent
technology and market research company that provides pragmatic and
forward-thinking advice to global leaders in business and technology.
For more than 24 years, Forrester has been making leaders successful
every day through its proprietary research, consulting, events, and
peer-to-peer executive programs. For more information, visit
www.forrester.com.

   (C) 2008, Forrester Research, Inc. All rights reserved. Forrester
is a trademark of Forrester Research, Inc.

Forrester Research, Inc.
Jon Symons, 617-613-6104
Director, Media Relations
press@forrester.com

Copyright Business Wire 2008