Web/Tech

Enterprise 2.0: Have Fun RIP'ing with B2B

I've been meaning to note this for a few days, but no surprise so-called "Enterprise 2.0" companies are already having a hard time getting companies to pay (or keep paying in a few cases) for their tools. This report is focusing on bigger companies having trouble, so just think what that means for Enterprise 2.0 startups. I'm betting this will be the first decimated group of fire sales and walking dead.

Am I missing it or is there anyone out there that looks like they could whether the storm and become a big company? In a few months, you'll be able to buy a while-label social networking company for the change in your pocket. (To be clear: I put Ning in a different category, and I'm still very bullish on their prospects. I also don't think of SixApart as Enterprise 2.0, since it's not purely selling blog software to enterprises.)

Sorry for the attitude here, but I've been hard on Enterprise 2.0 as a group for a while, generally deleting any press release or pitch that has it in the subject line. 99% of them I get are bandwagon, me-too products looking for a market, or there are just already decent free alternatives. It smacks of the "B2B" movement that swept tech just before Web 1.0 collapsed. Well, it's reminiscent in terms of hype and pitches anyway. I don't think many Enterprise 2.0 companies raised huge amounts of cash, and clearly none of them have gone public, so if I'm right the fall out is, thankfully, minimal.

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Speaking from inside a megacorporation's IT department, I definitely think E2.0 is going to happen. I just don't think it's going to be tied to startups and SaaS. My company just doesn't want someone else's services storing our data offsite.

I am struggling with an internal Sharepoint network today as well as trying to figure out how to move us from "reply-all" e-mail culture to microblogging and RSS alerts.

Hi Sara--both your and Dan's comments i can relate to. Many CIO customers I spend time with are pulling back budgets, only investing in technologies that improve the TCO of their current infrastructure and/or invest in innovation that changes the game, driving new business models and revenue. We (Riverbed Technology) happens to fit in both camps. Our business continues to grow fast because we can help people in Dan accelerate th performance of his internal Sharepoint application so that employees atucally use it, as well as making all internal apps that are accessed over the wide-area network run faster. Our key messaging is do more with less--consolidate, virtualize, do fast back ups all with plugging in a few steelhead appliances in your network. I am now going to age myself, but it's like opening up a can of popeye's spinach for your IT infrastructure. Or as the CIO of one of the software companies in the world called it--give me another can of that Riverbed whoopass!

Sarah,

Haha, that guy who commented above mis-spelled your name, i thoroughly enjoyed your P.R. rant from a few days ago, completely agree about that...

But, i got to disagree on your reticence to take the plunge on Enterprise 2.0...I guess i am still pissed-off about the first dotcom/Web 1.0 mania that saw all the VC money suck the life out of innovation in the middleware market until JBoss came along...

Now, i know Web 2.0 seems a little more substantial both market-wise and financially, but i think you should take some chances on Enterprise 2.0, for a number of reasons:

a. Innovation in middleware is more tangible than social networking innovations (beyond "look-and-feel")...

b. Your career has a nice trajectory, but i think you could really be the standard-bearer for all of Internet business, if you could wrap your arms around the so-called Enterprise 2.0 potential...

c. Gotta believe that there is just too much crap that comes out of Oracle and Microsoft to assume that the market for Internet-based business software is dead...it will come around...

i am a huge fan, and hope you continue to do your thing, just stay open to that other side of business, thanks,

douglas dooley
douglasdooley.blogspot.com

I agree with Douglas. There are genuine problems inside enterprises with knowledge management and the solutions from the large tech companies (Sharepoint, Google docs) are terrible.

By contrast suites like Connectbeam, SociaText and Sonar Dashboard are genuinely helpful and actually solving problems people have. There will be a shakeout and the me too companies will go to the wall but it is interesting Dustin Moskovitz's new company is in enterprise networking.

Hey Sarah,

Howdy from the other side of the pond (ie London!) where life, I have to say - is looking a lot more rosy than you suggest in your post!

For sure, the next 12 months are going to be hard - on tech companies in common with many other sectors.

But in a global recession one thing's for definite: I'd sure as hell rather be CEO of a company serving the Enterprise with an innovative, low cost product that improves productivity and efficiency - compared to being the CEO of an ad-funded consumer business relying on discretionary consumer spend and brand budgets!

Improving productivity, driving greater revenues from existing people/budgets and delivery greater revenues from existing customers are all key focus areas for Enterprise buyers in a downturn. And guess what, great E2.0 companies help you to do just that!

And guess what's the first spend cut - well of course it's the marketing budget...

Here at Huddle.net we seee some great companies in our space who are (finally) getting to grips with the bottom-up viral/consumer sale into the enterprise - whilst also delivering at the top end. You only have to look at our customer base to see what we're doing.

And we've got some VERY exciting news coming out in the next week or so that will show how the '2.0' and the 'Enterprise' can really, truly come together ....watch this space!

It depends on what you mean, Sarah. There is still not a unanimous view on what is included in the e2.0 "market" and what isn't. As Forrester suggests, there are several startup competitors selling e2.0 solutions to SMBs and large businesses, and I agree with you, there's not a lot of differentiation or rock solid value propositions among the competitors.

Our company, nGenera, has raised several million from Silicon Valley VCs and is booking several million with strong prospects for a nice exit. http://itsinsider.com/2008/08/29/already-there-100-saas Our customers are some of the largest, well-known enterprises in the world. I'm fairly confident we'll weather the storm.

There are many firms, in fact, that are positioned well in this space. Those of us who track e2.0, have a pretty good idea who they are. I wouldn't say it's the B2B 2.0 version of the dotcom meltdown, either. The concepts in this space have already yielded millions/billions in revenue for the enlightened. See our Wikinomics blog or the book for examples. http://www.wikinomics.com/blog/

My instant reaction: 'No shit Sherlock?' But seriously, there are plenty of companies out there successfully doing E2.0 style things. The fact they don't make the front page of Techmeme or into your inbox doesn't invalidate the case for collaborative technologies.

I agree with Dennis, your comments feel like the equivalent of say, if you decided to comment on say, Punjabi Politics without doing some research. Those who don't understand it might think you know what you are talking about, but anyone with experience in the industry will think you are just punching above your weight.

At any rate, this is not new. A lot of us have been predicting this price decline a long time before Forrester jumped on the bandwagon. It is just part of how things work when you go from an industry with 10 or 20 players to one that now has hundreds, if not thousands, of people trying to make a go of it.

Here is what I predict: Enterprise 2.0 will keep humming along. A lot of startups will fail, but a lot will get their exit as well. There will be exits for 20, 30 or 40million plus dollars and I predict you will never hear about it. Not because people won't talk about it, but because you just aren't paying enough attention to the industry.

There have also been several recent E20 companies who have raised decent cash,. nGenera has raised of $50million, Telligent is at $20million, Jive Software is at $20million, and there are more who have $2-10million in funding than I would care to count. These guys are all feeling the pressure on sales right now,. but that is true for every enterprise company. Hell, SAP practically shit a brick last week and has cut back everywhere. It is the same for any company that is relying on revenues to grow, costs are going to have to come down for a little while.

It is funny though that you say that all the hype is bubble-like, but then you use the fact that you don't know of any who have raised cash as some sort of barometer of success.

I think that there may be fallout for pure tool vendors, but any E2.0 company that provides a solution set that encompasses tools, research, education, and expertise will be able to provide tangible, measurable ROI, even in a down market. And those solution companies will survive long-term.

There were an incredible amount of things that were red flags in this short post that indicate Enterprise 2.0 may not be something you are following. As Jevon just stated there are many companies that have "cashed-up", but also there are many companies that are cash positive and with quite positive revenue streams.

I talk with a lot of mid-size to very large organizations about their needs where Enterprise 2.0 tools fill the large gaps their existing tools have left open and the much lower cost of Enterprise 2.0 solutions combined with their increase ease of use (correlated with increased organization efficiency).

Tightening budgets from many organizations due to the economy are placing much closer look at the value Enterprise 2.0 tools. Why? They offer ease of use, lower cost, filling tool gaps which equal viable solutions.

The other thing is every organization HAS B2B solutions as part of the core elements in their whole framework. B2B did not disappear as you suggest, it became a reality and no longer buzzword. The tools with only buzzword depth evaporated, but there are many solutions that are currently put into place.

There are large difference between Web 2.0 and Enterprise 2.0 realities and uses. Similar ideas and concepts are deployed, but the level of delivery and functionality is vastly different. Take Connectbeam, it is about 2 or 3 generations beyond any social bookmarking tool on the web as far as the things they are doing with social bookmarking and turning enterprise search into an insanely relevant search there the social tagging layers they add and functionality.

Lastly, Ning. Ning? NING? Enterprise 2.0? Social media solutions for marketing outside the firewall community yes, but not Enterprise 2.0 w/ inside the firewall or through the firewall capability, no.

It's stunning how valley media continues to be so flippant about business applications. This example is rooted with a very narrow (or naive) definition of Enterprise 2.0.

Sarah, if you have a beef with the fad of social tools or me-too apps then call it that; but to generalize such a broad and fast-developing concept says your foolish, desperate, or provocative (lazy).

"Charge for software? How would that ever work? Look around, it's already free!" Lets coin this chasm of misunderstanding "valleyware".

You can't move a conversation from consumer through to enterprise. From a technological and concept point of view they leverage each other but the business, operational and value characteristics are completely different.

The dilemma? Interesting rarely seems to make money and money apps rarely seem to be exciting enough to cover... We need more IT media weighing in to help Sarah Lazy, err Lacy et al, find relevant business cases to cover.

I'm not sorry for the attitude here, after all if it sounds like a duck, it is a duck.

Hello this is Brianna visiting first time to this site and find it very interesting. I really like to join it.and really want to continue the discussion with this site..

-------

brianna


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