David Osimo, Paul Foley, Federico Biagi (all from Tech4i2), Mike Thompson, Lee Bryant (both from Headshift), and David Bradshaw from IDC put together a very interesting study on Enterprise 2.0 in Europe (from here on out I will refer to these people as "the team"). The report is very comprehensive and quite dense at 160 pages. Here are some points of interest from the report.
Enterprise Apps vs Enterprise 2.0
Let’s start the discussion by understanding the key differences between traditional enterprise applications and enterprise 2.0. The chart does allow for room for interpretation but for the succinct way it is presented it does a great job of highlighting the differences:
Use Cases for Enterprise 2.0
As far as the use cases for Enterprise 2.0 go, the team also put together a chart to depict what those are, both from an internal and an external perspective.
This is where we start to see some overlap with what is being called "Social CRM" today. The easy way that most people have thought about the difference between Enterprise 2.0 and Social CRM is that E2.0 covers internal collaboration and SCRM covers customer engagement and collaboration. My original critique here was that the items listed above aren't really uses cases, they are general functions or fields. However, in the report the team expounded on these issues quite a bit to clarify not only what these use cases are but also examples of each.
No Agreement on the Market
Based on the research that the team to put together to evaluate the overall market for E2.0, they found that in the EU the market size was 97 million euros in 2009, will be 159 million euros in 2010 and will be 559 million euros in 2015. Keep in mind this is specific to the EU.
Interestingly enough Cisco predicted the world market for E2.0 will be US$ 34 billion (no date was given), IDC says the market will be US$ 1.6 billion by 2013, and Forrester predicted US$ 4.6 billion by 2013.
These numbers are all pretty far off from each other. Clearly nobody knows what's going to happen but the important thing to notice here is that everyone sees an upward trend in E2.0. The team also noted that EU adoption of E2.0 lags behind the U.S. by approximately 2-3 years which is credited to the fact that most of these E2.0 vendors are based in the U.S.. Fair enough.
Enterprise 2.0 Usage Breakdown
Now the question of usage comes into play. How many people are really going to be using Enterprise 2.0 solutions at their companies? The team put together a breakdown around E2.0 usage by users, by region and portion of knowledge workers.
I actually find these numbers surprisingly low, but then again these guys actually put the time to do the research behind these numbers. Still, I am very hard pressed to believe these low figures especially when so many software vendors out there are working with pretty much every enterprise size client you can thing of. But then again, working with an enterprise client doesn't mean that all of the employees are actually using a solution or a system.
I tried to find some more research numbers on E2.0 usage but wasn't able to find anything, if you have something to share around this please do so. As with the market growth estimates, I think the key takeaway here is that we are seeing some solid growth in usage.
Enterprise 2.0 Spending
The team also highlights this visual from IDC which takes a look at proportional E2.0 spending.
The bizarre thing here is that IDC estimates that the cost of implementation will be 1-3x the cost of software, whereas change management services will be 10-100x the cost of the software. ;
So what's weird about that? Well the "weirdest" thing for me is that a report by Information Architected (also cited heavily in this report) shows that the budget allocation for E2.0 is broken down as follows (with the #1 receiving the most amount of money and declining from there).
- Software (21% of budget)
- Internal staffing (19% of budget)
- Other (10%)
- Hardware/infrastructure (10%)
- Outside professional services (8%)
- Strategy development (6%)
That's right, strategy development is #6 on the list! As it stands most budgets (total) for E2.0 are under $1 million dollars (with 41% of companies spending 33k or LESS on strategy alone).I think the visual IDC put together is perhaps ideal but FAR from realistic in terms of what we are seeing today.
What I have covered here is barely the tip of the iceberg. This is perhaps the most comprehensive E2.0 report I have seen to date and I highly recommend you download and read the full report, it's free.
I'd love to hear your thoughts, comments, ideas on the report so don't be shy!