Web 2.0 Spending Set To Take Off

    April 22, 2008

Enterprise spending on Web 2.0 technologies such as social networks, blogs, wikis, widgets and mashups will increase over the next five years, growing 43 percent each year to $4.6 billion worldwide by 2013, according to a new report by Forrester Research.

Forrester says that Web 2.0 technologies represent a new way to connect with customers and employees. Large companies such as General Motors, McDonald’s and Wells Fargo have all used these tools and 56 percent of North American and European companies consider Web 2.0 to be a priority in 2008.

"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."

Currently, large businesses are spending more on employee collaboration tools than customer Web 2.0 technologies but Forrester predicts that trend will reverse by next year.

"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."