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What is Web 2.0?

In simple terms, Web 2.0 is a a term describing changing trends in the use of World Wide Web technology and web design that aims to enhance creativity, information sharing, collaboration and functionality of the web.

How big is the Market?

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 - News). 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.

Why is Web 2.0 Important to your Business?

The most interesting and potentially most profitable use of Web 2.0 techniques in the Enterprise is however in the customer facing areas of organizations and in a few specialist internal business areas. The specialist areas are things like product development where customer involvement and discussion in product design and development via blogs, wikis and discussion forums is a very fertile area for innovation and development. The other internal area which could benefit from these techniques is training where the use of video, VOIP, messaging, chat and even mobile delivery has considerable and extensive potential.

In terms of customer facing activities the whole of the customer contact, sales and customer relationship management cycle will be revolutionized by the Web 2.0 tools and techniques that are in common use in the consumer space. In marketing the opportunity to provide rich, interactive media and close customer interactivity through wiki's and blogs will provide new ways of contacting and engaging with potential customers. In sales the use of new form factor devices such as mobile phones to interact with the customer throughout the sales process is another area for new development. Finally in customer support the use of video to assist with problem resolution and blogs and wiki's for self help will create whole new support models.  All these areas can be made to be self funding through the use of advertising based models in the IT systems. It is certainly possible to think of the new marketing being a profit center for the organization.

Web 2.0 will create a huge new range of ways of interacting with customers and consumers for enterprises of all sizes that in turn will provide new marketplaces, business opportunities and revenue generation.

Who is Being Innovative using Web 2.0?

There are numerous examples of innovations now in Web 2.0 in all industry sectors. RBC is using Web 2.0 social mediated blogging tools to interact with Gen X and Y's, on their student retail blogging sites, with the goal of winning their hearts to make RBC their banking home, CIBC has been smartly developing a comprehensive collaboration strategy encompassing all the aspects of collaboration taking a much stronger strategic position than most market players, TD has been experimenting with Facebook to engage in similar conversations, as well as leverage Facebook for recruiting talent, MTS Allstream is experimenting with Wikis for their marketing organization to track competitive intelligence, Family Health International is using wikis to collaborate with their scientists globally. Helix Commerce has been partnering with these organizations at different stages of their innovation and collaboration growth cycles, and are currently working on a new book on the Future of Digital Media Technologies, to be released in Q1,2009.

Summary

Although, Social Computing and Web 2.0 marketing are still in their infancy; and in general, the market is still in an experimentation phase, In the long run, the affect of Web 2.0 will be enormous. Organizations that start to develop their approaches, and increase their skills in using these new toolkits will attract more actively Generation X and Y - and soon to be Generation Virtual or Gen-V.

Note: If you would like more information on Web 2.0 white papers, training programs, strategic services to help you deploy solutions using Web 2.0 approaches, and techniques, please do not hesitate to reach out to me at cindy@helixcommerce.com or call our office at (647) 477-6254.