Three Enterprise 2.0 Themes You Should Be Watching in 2010

December 31, 2009 by 24 Comments

Enterprise 2.0 continued its growth and maturation in 2009. We saw the rise of the Enterprise 2.0 consultancies, including Dachis Group, Altimeter Group and Pragmatic Enterprise 2.0. Andrew McAfee published his book about Enterprise 2.0. We saw the rise of the 2.0 Adoption Council. And based on what can be gleaned from vendors, more enterprises are deploying social software.

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For 2010, three themes will impact the sector. These aren’t the only ones, but I expect to see plenty of news, features and industry mental energy covering these.

#1: Impact of SharePoint 2010

It’s coming. SharePoint 2010. Microsoft’s upcoming release for the enterprise received good attention during the SharePoint Conference in Las Vegas. Features include:

  • Social profiles
  • An actual wiki
  • Blogs
  • Activity streams
  • Status updates
  • Presence status
  • Social bookmarking
  • Tags
  • Ratings

As a list of capabilities, this certainly is impressive and quite a departure from SharePoint 2007’s social software efforts. The devil is in the details, of course.

But generally, customers who have been “making do” with 2007 will suddenly have an attractive option from Microsoft. SharePoint 2010 will likely be a big catalyst for Enterprise 2.0 growth.

The coming release of SharePoint 2010 is forcing many vendors to evaluate their positions in the market. Going head-to-head with the same or fewer features is going to be tough. What differentiates your offering? My Jaws picture refers to this dynamic facing Enterprise 2.0 vendors.

There will be articles reviewing 2010. There will be blog posts dismissing its capabilities or lack thereof. But there will be impact in the corporate world.

#2: Enterprise 2.0 Becomes “Like Air”

At Defrag 2008, I caught Charlene Li’s presentation, where she said, “social networks will be like air“. The premise of her talk is that social network aspects will become less a destination URL and more an integrated part of experience throughout the web and mobile.

We’re seeing signs of a similar shift in the enterprise. Enterprise 2.0 is becoming less a destination and many of its concepts are being integrated into non-social software apps. Salesforce’s Chatter and Tibco’s Tibbr were end-of-year examples of this. As Dana Gardner writes on Seeking Alpha:

This is a clear sign that the enterprise software and social software worlds are munging. Get ready to see a lot more.

Salesforce and Tibco won’t be the last. Expect more announcements in this vein for 2010. Mike Gotta noted that this concept was called “contextual collaboration”, and was promoted by Matt Cain in the late 1990s. The web 2.0 tools of today are better, more diverse, more scalable and better adapted to human behaviors than whatever was available a decade ago.

Putting these tools in-the-flow will be a powerful basis for expanding Enterprise 2.0’s reach. A challenge for standalone general tools of today is that they require employees to toggle between different apps. This can make it tough to get traction. For example, Intellipedia has been making a difference, but it’s still just “a marginal revolution“. Not all agencies have made it part of daily work.

In the European Oracle Enterprise 2.0 Group on LinkedIn, Oracle’s VP of Enterprise 2.0 for EMEA asked this question:

What the article doesn’t cover and where I would be interested in your views is how the use of E2.0 tools would enable the Business Processes themselves to be changed. Or innovated completely. eg how do you bring Crowdsourcing, Idea Engines, Prediction Markets etc and integrate those into ERP systems?

Yes, even Oracle is discussing this concept. Watch how this theme unfolds in 2010.

#3: Enterprise 2.0 Market Stratifies

I see the Enterprise 2.0 market splitting into these two models:

  1. General collaboration suites that replace intranets and portals
  2. Specialized applications that deliver tangible value around a specific activity

Watching the progression of general collaboration suite vendors, I’ve always believed their ultimate goal is to replace existing 1.0 intranets and portals. After all, once an Enterprise 2.0 vendor’s solution…

  • has the ability to store and organize files,
  • provides pages for company-wide and team-specific communications,
  • offers powerful search capabilities,
  • includes APIs for third party integration,
  • can be organized into multiple spaces, and
  • has a superset of the elements of the corporate directory,

…why would a company maintain both the intranet and the social software suite. Pick one. The Enterprise 2.0 vendors still need to mature their product further to become the company intranet/portal. But I see that as their destination.

Meanwhile, a new crop of vendors have dispensed with the pursuit of all-everything suite approach. Rather, they build applications that integrate social in solving specific problems (e.g. Spigit for innovation management). Gartner analyst Anthony Bradley tabs these vendors’ offerings as “activity-specific social applications”. These vendors build in functionality that solves specific problems for companies, usually with definable ROI.

I expect the general collaboration suite vendors will offer their own specialized modules as well, in order to offer tangible ROI solutions to their customers.

Watch how this stratification dynamic plays out in 2010.

Those are my thoughts – what do you think?

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What the article doesn’t cover and where I would be interested in your views is how the use of E2.0 tools would enable the Business Processes themselves to be changed. Or innovated completely. eg how do you bring Crowdsourcing, Idea Engines, Prediction Markets etc and integrate those into ERP systems?

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Google Wave and the Enterprise: Beautiful Potential, Faraway Dream

June 11, 2009 by 14 Comments

google_wave_logoGoogle Wave…Google Wave…

Google Wave.

I’ve spent some time the past few days reading up on Google Wave. The Google I/O 2009 presentation by the Wave team was a smashing success. Quickly summarizing what it is, borrowing from Google’s own categorizations:

Product: Free-form page onto which multiple people can contribute and interact. Every wave in which you are a participant shows up in an inbox. The modes of communication are both email and IM. Email, because you can write something anywhere in a wave, and all wave participants see that the wave is updated in their inbox. Like Gmail.  IM, because updates post instantly, and anyone on the wave at the same time can see them. There’s more there, watch the I/O presentation demo to see it all.

Platform: Wave is to be an API playland. APIs to leverage the functionality of Wave, and embedding functions in Waves. The I/O demo includes functions for maps embedded easily into a Wave, and the ability to create a simple event tracker where Wave participants simply click whether they are attending or not (Evite for dummies). Very cool stuff. Another use of APIs…Wave as your Twitter client. With real-time search results served up into your Wave inbox.

Protocol: Waves are to follow an open federation, which means they all can interact with one another. Wave servers can be set up behind the firewall.

As they said in the demo, they though in terms of “what would email look like if we invented it today?” How long before Gmail converts over to Google Wave? Maybe in a year or two.

It’s quite early, and we have limited information so far on Wave. But I thought it’d be interesting to consider Wave from the perspective of an enterprise software company. It’s a starting point for me to get a handle on Wave and where it might have an impact. A few notes:

  • I’ll make educated assumptions about what Google Wave can do
  • I may be re-hashing old concepts here, such as portals
  • Google Wave would need significant penetration of the enterprise market, potentially displacing Outlook email

Enterprise software is a broad area, too broad to analyze well in a post. Rather, I’m going to focus on the enterprise software I know well (my company’s), and make some points that will apply to all enterprise applications.

OK, with that out of the way, and Dion Hinchcliffe’s post about the enterprise and Google Wave as inspiration, let’s dive in. I’m going to lay out some initial thoughts of how enterprise software could integrate Google Wave. And then I’ll explain why I think it’s going to be a long time coming before it impacts the enterprise.

What Job Does Your Software Do?

Clayton Christensen talked about the “job” your product does. In other words, think less about your product’s features, and more on what needs your product fills for customers. From that perspective, innovations are more likely to emerge.

This notion struck me as a good way for enterprise software companies to think about how Wave might relate to their products. In other words, less focus on features, more focus on specific use cases.

Spigit provides enterprise idea management software. Its “job” is as follows:

  • Easy place to enter your ideas
  • Interact with people over your idea or ideas of others
  • Help identify the best ideas
  • Make it easy to track ideas during their progression into full-blown initiatives

I’m going to use these four tasks as the basis for thinking about Google Wave. Where will Google Wave have an impact?

Easy place to enter your ideas

With Spigit, we have a simple basis for entering your idea – a basic web form. And Google Wave supports forms, as shown below:

Example of a web form in Google Wave

Example of a web form in Google Wave

The ability to use forms makes me think there’s an even better way for employees to enter ideas. A principle that I really like is that information and activities need to be in-the-flow of daily work. The more you can put things at the finger tips of where someone is engaged, the better it is for awareness.

In the demo, different types of waves were available via the New Wave dropdown menu to allow access to separate apps. Here’s what I can see happening:

  • A menu option for New Idea is displayed inside an employee’s work Google Wave UI
  • Selecting it launches a new Wave, with the idea template displayed
  • Enter the info, click submit
  • It’s now on the employee’s personal Wave page, as well as becoming a new Idea in the Spigit platform

The Idea is now part of the Wave inbox. It’s also accessible on the Spigit platform, for others to see. That would be great. It’s a level of interconnectedness that is difficult to put in place today. It wouldn’t just apply to ideas either. Why not do this for expense forms? Wiki pages?

Key here is leveraging the open federation protocol. A person’s individual Wave becomes a new object in another Wave-based application. The Idea would be considered a Wavelet in Spigit. From the demo, here’s an example of two separate Wave servers (i.e. two separate apps), where a Wave is shared between them:

Wave created on one server displays on a second server

Wave created on one server displays on a second server

Interact with people over your idea or ideas of others

The parallels between Google Wave and Gmail make Google Wave great for knowing when there are changes to a Wave. In Gmail, when a reply to a message hits your inbox, the original message becomes bold, and moves to the top. It’s a clear, easy way to see when someone has responded, while keeping the entire thread intact.

Google Wave applies this characteristic even more broadly. If someone replies to your wave, it returns to the top of your inbox, bolded. If someone edits your wave, same thing happens. Basically, any updated to a Wave will display as a changed item in the Wave inbox. The screen shot below shows this functionality:

Google Wave inbox - changed items at top, bolded

Google Wave inbox - changed items at top, bolded

On the Spigit platform, a number of actions can be performed with regard to an idea: vote it up or down, comments on it, review it, post/edit a wiki page for it, become a team member. Now all of these actions are supported with email notifications currently.

Any of these actions will cause your Idea to return to the top of your inbox, bolded. Where an email notification is good, a Wave notification would be great. Everything can be seen in context, and you can respond right from your Wave inbox. Comment, IM or just see the latest changes to your idea.

Another great innovation is the ability to easily add others to a Wave. With this functionality, you can let others know about your idea, and they can see changes as they occur as well. If the idea isn’t interesting to someone, they just remove themselves from the Wave.

Really, really powerful feature.

These easy interaction hooks for objects and activities are something that many enterprise applications would benefit from.

Help identify the best ideas

The Spigit platform tracks many activities and included unique features to help surface the best ideas. And this where Google Wave doesn’t change things really. A lot of that is the secret sauce of the Spigit platform.

Which brings me to an important point: Google Wave won’t replace enterprise software applications. The logic and features of the individual apps – ERP, CRM, wikis, HR, etc. – continue to be the primary reason companies buy them.

Assuming Google successfully brings Wave into the enterprise, either replacing Outlook or standing beside it, I’m sure there will be companies that create Wave-based apps to compete with the big enterprise systems. But such competition happens today anyway.

Make it easy to track ideas during their progression into full-blown initiatives

In Spigit, ideas that make it go through a series of stages. Each stage has different criteria for evaluating whther it’s ready to be prototyped and operationalized. Along the way, aspects of the idea will be addressed in other enterprise applications:

  • Company wiki
  • Product development software
  • Engineering issue tracker
  • Enterprise resource planning (ERP)
  • Accounting
  • Project management
  • Blogs
  • etc.

This is where a couple of features might make sense. Google Wave includes robots. Robots are “automated elements” that perform tasks as part of a Google Wave. Let’s assume the original Idea wave is copied to other enterprise apps. Now, there is a connection from the original idea to these objects in other systems.

The robot can look for updates on those other Waves which tie back to my Idea. When there’s a change in status, My Idea wave gets the update. I’m now on top of what’s happening with my initiative, from anywhere in the company.

Yes, that would cool.

The Impossible Dream?

You may have heard the phrase “working the wiki way“. Well I’d like to work the “wave way”. The possibilities with Google Wave are tantalizing. A much more seamless experience for using software. A common protocol around which applications communicate.

Not likely to happen for a while, if ever.

For companies like Spigit, with a web 2.0 orientation and SaaS delivery, Google Wave is something we can do, and as an enterprise social software company, it makes sense. But to fully realize the benefit of Google Wave inside the enterprise, a lot of applications will need to leverage the Google Wave platform. It’s hard to imagine SAP, Microsoft, Oracle and the like doing much with Google Wave.

As Dion Hinchcliffe notes:

New protocols, servers, data formats, and client applications are required to use wave. Unfortunately, Google Wave brings a lot of baggage with it, though it’s mostly straightforward. You will require new software, though not on the client since that all runs in a zero-footprint browser client. This means more integration code, management, and monitoring.

You look at that, and contemplate all the installed software already in place. And I don’t imagine MISO thinks of Google Wave as being in their interests. Google Wave directly overlaps Microsoft Exchange and Outlook, for instance.

So it will be up to the young bucks to push for the new way to deliver end-user simplicity and in-the-flow accessibility to employees. It will take time.

I’ll be watching developments around Google Wave. How about you?

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The Top 10 Enterprise 2.0 Stories of 2008

December 19, 2008 by 2 Comments

The enterprise 2.0 space saw good action this year. I’ve had a chance to see it up close, starting the year with BEA Systems (now Oracle) and closing out the year with Connectbeam. I think it’s fair to say that in 2007, social software was still something of a missionary sale. In 2008, company inquiries increased a lot. The burden still falls on the vendors to articulate business benefits, adoption strategies and use cases. But enterprise customers are now partners in this work.

So let’s get to it. Here are my top ten stories for the year:

1. Activity Streams

Facebook really got this going with its newsfeed, and FriendFeed took it to an art form with its lifestreaming service. In 2008, many vendors added activity streams to their applications: Connectbeam, BEA Systems, Atlassian, SocialText, Jive Software and others.  Activity streams are great for improving awareness of colleagues’ activities, and adding a new searchable object: actions.

2. Forrester’s $4.6 Billion Forecast

Forrester Research made a splash with its forecast that Enterprise 2.0 will be a $4.6 billion market by 2013. The ReadWriteWeb story about it has been bookmarked to Del.icio.us 386 times and counting. Forrester’s projections provided a solid analytical framework for the different tools, used internally and externally. According to the analysis, social networking will be the most popular tool for companies. Whether you buy the forecast or not, they remain the best-known, most visible numbers to date.

3. Oracle Beehive

Larry Ellison is fond of essentially dismissing SaaS. He does not have Oracle invest much in the trend. But Oracle did seem to embrace Enterprise 2.0 in a big way this year with Beehive, which is an “integrated set of collaboration services.”  The New York Times quotes Oracle EVP  Chuck Rozwat: “It is a product we built from scratch over the last three years.” Now since Oracle is a huge enterprise software company, there’s plenty of skepticism about the capabilities and innovation of Beehive. But there’s no denying that Oracle has the ear of the enterprise, and picks up a lot of market intelligence through its customer base. While Beehive itself may or may not succeed, the idea that Oracle came out with Beehive was a big story.

4. AIIM/McKinsey Surveys

Research and consulting firms AIIM and McKinsey each came out with surveys of corporate interest in enterprise 2.0. The AIIM survey looked at levels of awareness and interest among different Enterprise 2.0 technologies. AIIM also took a fairly expansive view of social software. The top 3 “Enterprise 2.0” technologies in terms of corporate awareness? Email, instant messaging, search. That’s actually a funny list, yet there are lessons there for vendors and consultants in the social software industry. If those are entrenched, can you play nicely with them? One other quote I like from the report:

This study of 441 end users found that a majority of organizations recognize Enterprise 2.0 as critical to the success of their business goals and objectives, but that most do not have a clear understanding of what Enterprise 2.0 is.

McKinsey’s survey of enterprises looked at the interest in various tools as well. It also asked respondents what the leading barriers were for success of social software initiatives. Top three were: (1) Lack of understanding for their financial return; (2) Company culture; (3) Insufficient incentives to adopt or experiment with the tools.

5. Facebook Co-Founder Leaves to Start an Enterprise 2.0 Company

Facebook co-founder Dustin Moskovitz and colleague Justin Rosenstein announced they were leaving the hot consumer social network to start a new company. The new company will “build an extensible enterprise productivity suite,” with the goal of “making companies themselves run better.” Why would these young guys, sitting on top of the leader in consumer social networking, choose to exit? As I wrote at the time:

The Enterprise 2.0 market is still quite nascent and fragmented. Combine that industry profile with projected spending in the category, and suddenly you understand why these guys are striking out on their own.

Assuming they’ll be able to tap the mother ship for help, I think this was a fairly important story this year.

6. Microblogging Enters the Enterprise

Joining wikis, blogs, social bookmarking and other incumbent tools this year was microblogging . Given the way Twitter is used by Enterprise 2.0 aficionados, and is enjoying skyrocketing popularity, it’s no surprise we started seeing microblogging emerge for internal use. At the mostly consumer-focused TechCrunch50, enterprise microblogging start-up Yammer won the top prize. Other start-ups in the category include SocialCast and Present.ly. SocialText added microblogging with its release of Signals.

7. Gartner Narrows its Criteria for Social Software

Gartner came out with its Social Software Magic Quadrant in October. As SageCircle notes:

Gartner’s Magic Quadrant is probably the iconic piece of analyst research. With its visibility and status, it also has enormous influence on vendor sales opportunities, especially when it comes time for IT buyers to draw up the all-important vendor short lists.

So it was with great interest when I read that Gartner had narrowed the criteria for whom it puts in the Magic Quadrant:

Added blogs and wikis to the functionality requirements

The effect of that is to establish those two tools as the de facto standard for enterprise social software inside the enterprise. To the extent corporate buyers are listening to Gartner for signals about the market, this will make it a bit more challenging for start-ups with interesting offerings that address other parts of the social software market. Yammer, for instance, won’t make it into their Magic Quadrant.

8. Enterprise RSS Fails to Take Off

RSS is one of those technologies that you know has huge value, and yet continues to struggle for awareness and adoption. Google tracks the leading “what is” searches. The fifth most popular on its list? “What is RSS?” Take that as both good and bad. Good that people want to know, bad that awareness continues to be a struggle.

Forrester analyst Oliver Young has a sharp write-up that shows enterprise RSS did not expand inside companies as many had thought it would this year. As he notes:

Of the three enterprise RSS vendors selling into this space at the start of 2008: KnowNow went out of business completely; NewsGator shifted focus and now leads with its Social Sites for SharePoint offering, while its Enterprise Server catches much less attention; and Attensa has been very quiet this year.

RSS is a great way to distribute content inside companies, but its ongoing limited adoption was a big non-story for the year.

9. IBM and Intel Issue Employee Social Media Guidelines

IBM and Intel each established guidelines for their employees who participate in social media. As I wrote, this essentially was a deputization of employees as brand managers out on the web. These market leaders were essentially saying, “have at it out there on blogs, social networks, Twitter, etc. But make sure you know the company’s expectations.” These guidelines represent a milestone in large enterprises’ comfort with social media. I expect we’ll see more of this in 2009.

10. The Recession

This affects all industries, globally, of course. And Enterprise 2.0 is no exception. Jive Software made news with its layoffs, but the effect was industry-wide. And of course, corporate buyers aren’t immune either. It’s a time for companies to hunker down, get slimmer, more focused and creative than they are in flush times. This recession will be a marvelous test for the resiliency of the Enterprise 2.0 sector.

Those are my ten. Did I miss a big story for 2008? Add your thoughts in the comments.

If you’re interested in tracking what happens in 2009, I encourage you to join the Enterprise 2.0 Room on FriendFeed. It is a centralized location for tweets and Del.icio.us bookmarks that specifically relate to Enterprise 2.0.

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Enterprises Don’t Care about Network Effects

October 27, 2008 by 2 Comments

Tim O’Reilly penned a great thought piece over the weekend, Web 2.0 and Cloud Computing. In the post, he examines cloud computing and its ramifications for software vendors:

I believe strongly that open source and open internet standards are doing the same to traditional software. And value is migrating to a new kind of layer, which we now call Web 2.0, which consists of applications driven not just by software but by network-effects databases driven by explicit or implicit user contribution.

So when Larry Ellison says that cloud computing and open source won’t produce many hugely profitable companies, he’s right, but only if you look at the pure software layer. This is a lot like saying that the PC wouldn’t produce many hugely profitable companies, and looking only at hardware vendors! First Microsoft, and now Google give the lie to Ellison’s analysis. The big winners are those who best grasp the rules of the new platform.

Two things stuck with me in the post. First, Tim does a great job delineating the different types of cloud computing. I put them together in a graph, rising in order of specialization and (generally) value-add.

And here’s a quick summary of Tim’s descriptions:

  • Utility Computing: this is pure computing plumbing stuff – “virtual machine instances, storage, and computation”
  • Platform as a Service: APIs are provided for the platform, such as on Google AppEngine and Salesforce’s force.com
  • Cloud-Based End-User Applications: web services are cloud-based, but people make a distinction between Google Search, and Google Docs. Same server farms, same cloud-based delivery. The difference is that Search doesn’t hold personal information, Docs does. So the holding of personal or company information is an important distinction here.

It’s that third, top level where Tim makes an interesting point. Larry Ellison holds that cloud computing is an interesting approach to delivering software, but not one that returns a lot of value to vendors. Tim argues that Ellison is right about the Utility Computing layer, but that he’s missing the bigger story with the Cloud-Based End-User Applications.

I’m not so sure Ellison is wrong.

Enterprises Thrive on Proprietary Advantage

The principle of Web 2.0 is powerful: “the user’s data becomes more valuable because it is in the same space as other users’ data.”It’s powerful, and continues to be a sea-change in thinking for Web applications (the idea itself isn’t new – it’s the whole premise of any market).

But here’s how Tim describes the opportunity that Oracle is overlooking:

If Oracle isn’t playing that game, they will one day be doomed to irrelevance. Perhaps, like hardware giants of the past – Compaq, say – they will be absorbed by a bigger company. Or perhaps, like Unisys, they will linger on in specialized markets, too big to go away but no longer on the cutting edge of anything. Or they will understand that it’s not the database software that matters, but the data that it holds, and the services that can be built against that data.

Oracle sells its software to big enterprises. The information in Oracle’s databases is a core strategic asset and basis of operations for companies. You don’t get to mess with that. At least not lightly.

Putting the database software in-the-cloud and enabling external network effects to occur against that data will be a hard sell for any vendor. I can think of two reasons off the top of my head.

Third party access to data: First, it requires that external parties have some level of access to a company’s data. Right there, the typical response from the CIO will be…why? Why would I let someone anywhere near my data? There is no way you’ll convince a company that parking its data in a cloud will increase its value because other companies’ data is also there.

There is an ecosystem argument that if many companies do park their data ijn the cloud, they’ll get the benefit of better third party apps who can leverage that cross-company data to deliver better applications. Which brings me to a second thought.

Ecosystem already exists: For a large installed base of software, like Oracle, a robust ecosystem already exists. Companies recieve plenty of pitches from vendors for add-ons to their Oracle, Microsoft, SAP, etc. software. Strictly speaking, having to go from company to company, looking at the installed software, does not address the “live web” potential of network effect advantage. I mean, you’re privy to usage stats and data content during the install, then you have no visibility as a third party software vendor.

But the experience of going company to company provides some knowledge to these ecosystem players, and the next dot release will incorporate some of the learnings. I don’t enterprises are suffering from a lack of new ideas with regard to their installed software.

Because the Network Effects Only Help the Competition

In the enterprise world, it’s so very dog-eat-dog. And here’s the problem with network effects, especially for large companies: Large companies see much more of what’s happening in the market than do smaller competitors. Their installed proprietary databases are gold.

If they put that in a database cloud, who really benefits? Smaller competitors who also participate in that cloud, and an ecosystem of software vendors. But the enterprises don’t gain nearly as much as the smaller players. Which from their perspective, actually makes the enterprise worse off.

I think Tim is onto something for the consumer and the small business markets. Cloud computing will give them access to information and an ecosystem that they currently do not enjoy. We see this all the time with Web 2.0 sites – eBay, Google Search, Facebook, etc.

But in the enterprise market, I’ll disagree with Tim, and his view on the faultiness of Oracle’s current position. Oracle’s dominant market position and corporations’ own motivations, proprietary knowledge and data sensitivities diminish the value of network effects for the enterprise market.

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Yammer Gets Bronx Cheers from the Blogosphere. Why?

September 15, 2008 by 20 Comments

Yammer, as much of the free world seems to now know, won “best of show” at TechCrunch50. Yammer is an enterprise 2.0 company. The blogosphere had a fairly negative opinion about this. I read a number of these posts, and the table below outlines the reasons Yammer was viewed negatively:

Links to source posts: Dennis Howlett, Rafe Needleman, Rob Diana, Mathew Ingram, Svetlana Gladkova, Chris Cardinal, Chris Brogan, Jennifer Leggio, Bernard Lunn, Joe Duck, Stephen Baker, Mike Gotta, Fred Wilson, Duncan Riley, Liz Gannes

It’s a diverse collection of bloggers, and they each bring different perspectives. But there was enough commonality that I bucketed the reasons into the five groups you see in the table.

The reactions surprised me a bit – although there were positive reactions too. Let’s break down these five buckets.

Another Twitter Clone

Understandable reaction. We’ve seen Plurk, Identi.ca, Rejaw, etc. So I get the weary “Yet Another Twitter Clone” reaction.

Key difference here is the market Yammer is pursuing: enterprise. That makes all the difference in the world.

  • For Identi.ca to succeed, people would have to stop using Twitter (see Louis Gray’s post for analytical back-up to this point)
  • For Yammer to succeed, the more people use Twitter, the better.

Twitter ain’t enterprise, and I’d be surprised it gets there anytime soon. But using Twitter makes people understand the value of microblogging, which in turn helps Yammer.

Twitter/Others Will Do This

Given Twitter’s problems with keeping the service stable, I’d be shocked if they had also been putting in cycles figuring out how to go after the corporate market.

The other key difference is this. Enterprise is a different world than consumer. Probably one of the better explanations of the differences was by Mike Gotta, in discussing microblogging inside the enterprise:

“Within the enterprise, it is highly probable that IT organizations will classify these tools as messaging platforms (I would BTW). As a messaging platform, these tools would have to support security, logging, audit and archival functions to satisfy regulatory, compliance and records management demands.”

To succeed in the enterprise, you really need to focus on the enterprise. Twitter is having a field day in its growth in the consumer world. Wachovia just added their Twitter account to the website Contact Us page. Keith Olbermann is now on Twitter. Twitter should really focus on the consumer market, and own that.

Yammer is more likely to bump up against SAP’s ESME and Oracle’s OraTweet.

Extortion Revenue Model

The extortion is based on the fact that Yammer is free for sign-up and use. But if a company wants to control it, access to the administrative functions costs money. So companies will feel compelled to pay in order to manage the goings-on inside Yammer.

I’ll admit it’s a pretty creative enterprise pricing model. It seems to address two issues that bedevil enterprise software vendors:

  • How do I get a company to try my software
  • How do I prove employees will use it and get value from it

Companies don’t pay until they’ve seen employees use it and get value from it. Not bad, and it really wouldn’t be that hard for a CIO to tell employees to stop using Yammer (and block the site).

It is sneaky, but it’s also a clever way to address the adoption and value proposition issues that enterprise software vendors will always face. Atlassian Confluence achieved a solid share of the wiki market via viral adoption. Atlassian doesn’t have sales people – it’s all word of mouth.

Workers Won’t Adopt

This is where Yammer faces the toughest road. Getting people to microblog. Twitter is available to the hundreds of millions of people around the globe who might be interested. And it’s gotten a very small percentage of them.

Inside the enterprise, you need a much higher adoption rate. People already on Twitter are natural adopters, but a lot of employees will still have the “why would I do that?” reaction.

The “sell” has to compare Yammer to existing communication modes:

  • Email
  • Instant messaging
  • Forums

Note that relative to Twitter, Yammer has immediate context and built-in users. Context comes because the internal messages will generally center around work that colleagues have a stake in. In other words, they care more about each Yammer message than they do about individual tweets out in the wild.

The other thing is that managers at the departmental level can join and start using Yammer. On Twitter, if you don’t follow an A-Lister…so be it. On Yammer, if you don’t follow your boss…you’re going to miss something.

Cloud Computing Is Scary

This is an ongoing issue for the entire cloud computing/web apps world. Amazon S3 and Gmail’s recent outages highlight the issue.

Salesforce.com experienced outages back in late 2005 and early 2006. They were a blow to the software-as-a-service sector, but the company appears to have righted the ship since then.

Salesforce.com has a market cap of $6.9 billion. Yammer doesn’t.

But Yammer doesn’t have the database-of-record mission that Salesforce.com does, so the threshold for Yammer is lower. Still, ideally for Yammer, people will message about critical issues for their companies, not just what they’re having for lunch. So Yammer’s scalability, security and reliability will be important.

Cloud computing still has a sell-job of its own, but I like the way Anshu Sharma put it:

“No one (at least not me) is suggesting that on-premise software will disappear – its just that growth in enterprise software will come from SaaS and not on-premise (which is growing at about 4%). Venture capitalists like Emergence Capital and Humbold Winblad are voting with their dollars!”

A lot of action is around SaaS, it’s a question of how long the adoption curve will be. Yammer is counting on this one.

Gartner’s Hype Cycle

Gartner puts out updates on something it calls the Hype Cycle for Emerging Technologies. The hype cycle tracks the market views of various technologies, which go through predictable cycles:

  • Technology Trigger
  • Peak of Inflated Expectations
  • Trough of Disillusionment
  • Slope of Enlightenment
  • Plateau of Productivity

In July 2008, Gartner released its latest view regarding the hype cycle. This one included both microblogging and cloud computing, Yammer’s model:

Courtesy marketingfacts on Flickr

Courtesy marketingfacts on Flickr

Neither microblogging nor cloud computing is anywhere near mainstream uptake. Gartner pegs that at a 2 to 5 year horizon.

The companies that are in now, though, will be best positioned to figure out what drives the Plateau of Productivity. It takes time to learn a market, get some positive customer stories and gain a wider customer base.

I’ll be watching Yammer.

I’m @bhc3 on Twitter.

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