We interrupt your regularly scheduled programming to bring you some breaking news: the Detroit Lions suck.

All joking aside I would like to take a brief moment to reflect on my sorry excuse for a football team, the Detroit Lions, who stand on the brink of the first winless season in the NFL since the league expanded to a 16 game schedule in 1978. Yes, I am a Lions fan. No, I am not willing to switch allegiances to the Raiders or the Niners. Yes, I am rooting for an 0-16 season.

It took me a long time to fully embrace 0-16. All the way up to 0-14 I was rooting for a win each week. But the last two weeks something clicked. We are guaranteed to be one of the top 5 worst teams in NFL history regardless of what happens today so we might as well go all in and grab an undisputed #1. I don’t expect to ever get into arguments with Steelers fans, Patriots fans, or Giants fans over the best teams and franchises in NFL history, but I do expect to get into plenty of arguments with Raiders fans, Cardinals fans, and Seahawks fans over the worst.

So here is to the trump card. Here is to embracing the misery. And here is to the Red Wings and the Pistons; thank god for small miracles — I could have grown up in Cleveland.

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There has been a lot of interest in social networking for the enterprise over the past 12 months. Many vendors are now bringing a people-centric view of content and data to previously document-centric apps and the smaller Enterprise 2.0 vendors like Jive, MindTouch, NewsGator, Telligent, and a host of others are making employee social networks their bread and butter. Forrester is bullish on the idea, and cited social networking as one of two Enterprise 2.0 feature that will have a significant impact on the enterprise (wikis were the other — see ZDNet for a thorough writeup).

At the same time though there is reason for caution, and there is no better example why than the “Add to My Colleagues” feature in SharePoint (see screenshot at left). I think I can guess what Microsoft had in mind — allowing employees to declare who they work with and thus keep better track of them through the MOSS 2007 MySites functionality — but the execution is exactly what is wrong with social networking in the enterprise. Look, this is not Facebook or LinkedIn where I need to tell the network who of the millions of users I know. This is a group of employees within in company and, despite the fact that I haven’t hit the link, everyone is my colleague. We already have a damn good reason to talk to each other: we are working for the same company and towards the same goals! I don’t need to gently approach you by “colleaging” you first, I can just pick up the phone or send an IM or email. Declaring this affiliation over and over again just wastes time and hurts the credibility of social networking in general. Facebook is about collecting friends. LinkedIn is about building a professional network. Social networking in the enterprise is about getting work done and features like this give both users and execs the impression that these apps are ab0ut wasting time.

Now maybe I’m being too harsh on Microsoft; other social networking vendors have similar features, and the next rev of SharePoint should (I hope) have this sort of stupidity taken out of the product. But Microsoft, for all its deficiencies in this space, is looked to as a leader by most businesses. The precedent and impression that Microsoft sets is a tough thing to break. And in the meantime “Add to My Colleagues” keeps the focus for social networking in all the wrong places and hurts the credibility of both SharePoint and the enterprise social networking category at large. Frankly if I were an exec presented with the great idea that my employees could create networks of colleagues I would kick both the sponsor and the vendor out of my office, never to return.

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The other day I was perusing former colleague Pete Kim’s master list of social media marketing examples and noticed that the Detroit Pistons was listed as a Twitter user. Naturally, as a Pistons fan, I had to find out what was up, so I clicked in and what did I find? Why an “official” Twitter feed pushing box scores, game highlights, promotions and other run of the mill fare. I kept poking through and ran into this tweet:

Hmmm . . . Well either one of two things is happening here. Either the Piston’s marketing department has gone off the deep end — remember this is the team who’s most far reaching recent national news was the Malice at the Palace — or Warren Skukernek, the guy who added it to the list, got taken for a ride. Considering a search of the Pistons site for “twitter” returns no results I have to believe this is less than official.

That said, it begs the question, with this much trash out there why would any actual brand even bother? Other than because you read the Comcast Cares case study and set up your own, of course.

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Next up: RSS demand will grow substantially

Last year I wrote: “In 2007, interest in the RSS “publish and subscribe” architecture grew as firms sought to syndicate internal content such as RFP requests, blog postings, wiki changes, and CRM data. While this demand growth was enough to keep RSS vendors like KnowNow and NewsGator Technologies busy, Forrester expects 2008 to be a banner year for RSS and specifically enterprise RSS. Why the optimism? In 2007, many firms discovered the value of blogs and wikis for knowledge workers, and a healthy number of firms made initial investments. However, for these tools to truly fulfill their potential, an RSS deployment becomes a must-have, otherwise new content goes unnoticed and most blogs and wikis will fall out of daily view of their users. As an RSS technology strategist, you must pursue tight partnerships with as many blog and wiki vendors as possible. Each vendor adds value to your existing deployments by sending you qualified prospects. While 9% of enterprise firms expect to consider the use of RSS in 2008, we believe that number will be close to 20% by year-end.”

OK, this one hurt.

In my defense the logic of the argument still feel sound, however the facts blow all sorts of holes in my prediction. 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. In other words, all is not well in the enterprise RSS space. Even the RSS marketing space has not had a terribly productive year, though Pheedo recently told me they have been doing 1 billion RSS impressions a month this year, compared to 2.1 billion in all of 2007.

Last week I spoke with Brian Kellner, NewsGator Vice President of Products, and he said that in 2008 there was “a lot of RSS activity and need for customers, but many did not buy directly against that need.” In other words many businesses have yet to realize they have an RSS problem. They know they have a problem, but instead of investing in RSS many bought other products like wikis, blogs, and social networking tools. Its a nice story, and Charlie Davidson, CEO at Attensa, told me much the same thing. But frankly I’m concerned there is something more fundamental going wrong here. At the end of the day enterprise RSS is predicated on the notion that shoving all communications through email is too inefficient and must be augmented with other communications channels. Is it possible that people simply don’t feel that pain strongly enough to invest the time and effort to learn to use RSS?* And that every wiki feed will eventually dump right into email because that is what people really want? KnowNow tried to take a plumbing approach to RSS and failed, so my guess is if you are not providing an end-user tool you won’t survive.

So we may be stuck between a rock and hard place here — a set of end users who are not interested in a new inbox, and a set of technologists who have better ways to move bits around the enterprise. It looks like NewsGator may have struck on the best solution: sell an end-user tool people actually want and use your own RSS tool as the plumbing. So is it possible there is no long term viable market for enterprise RSS? My gut says this is not the case, but if things don’t pick up in 2009 I will have a hard time concluding otherwise. So, since I still (mostly) believe in the fundamental argument of last year’s prediction, do I go on the limb and AGAIN predict a big year for RSS? What do you think? Would you pull the trigger two years in a row?

Score: Oliver -2, Market – 1

Up next: Mashups will mature and eat into other major markets

*Sidebar: this is most of the reason I think Yammer and other microblogging for the enterprise tools are doomed. Another inbox just has not yet caught on, and I have a hard time seeing a case were microblogging is successful and RSS is not.

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Next up on the prediction recap list: IT departments will take their heads out of the sand and embrace Web 2.0 technologies

Last year I wrote: “To date, most IT departments have resisted Web 2.0 tools, often viewing them as consumer grade — of secondary concern to other major IT investments — or simply frivolous. But in 2008, Forrester expects at least half of the 42% of enterprises that say Web 2.0 is not on their priority list to add it by year’s end. Why? First, the IT shops that began experimenting with enterprise Web 2.0 tools for their own use in 2007 — for tasks like help desk ticket resolution, standards and documentation tracking, and IT project management — will begin rolling out these tools more broadly to lines of business as they pass IT muster. Second, CIOs will concede that they cannot quell passionate employees’ use of consumer-oriented or SaaS Web 2.0 tools and will mitigate risk by deploying enterprise-class tools in their stead. Finally, for IT departments aspiring to be more relevant to the business, enterprise Web 2.0 tools will be a high-impact, low-cost method to show leadership and innovation. Tech strategists should focus feature development on IT in 2008 and keep a sharp eye on integration and deployment. For many vendors, this means offering the previously unthinkable: on-premise software.”

The result? Again, so far so good. When I looked back at this prediction in July I concluded that if anything I was too timid. We saw a LOT of inquiries and other activity from IT departments that were trying to take an active role in Web 2.0. Granted, some were more reactive than proactive, but on balance the interest was strong and genuine.

In addition to looking in general at the activity of IT departments I conducted a small survey of 262 IT professionals to get more detail. In that survey we found that IT staffers are very knowledgeable about Web 2.0, though there are still major gaps in knowledge, most notably with regards to mashups and prediction markets.

Other notable findings: IT departments strongly believe that Web 2.0 will have a major impact on their businesses; the availability of IT resources for deployment and customization is a major factor determining if Web 2.0 tools get off the ground; in one of three businesses IT developers have an active role in technology selection; and in many cases IT departments are still hoarding Web 2.0 technology, serving their own needs ahead of the rest of the business.

For 2009 I would expect this trend to continue, though not as quickly as it would have if we had not hit an economic downturn. Many of the projects IT departments would have spearheaded are in the realm of collaboration and productivity, and my belief is that those projects will be hard hit in 2009.

Score: Oliver -2, Market – 0

Up next: RSS demand will grow substantially.

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As an economist I find our current economic meltdown equal parts frightening and fascinating and, as of late, I have been thinking a lot about my macroeconomic courses from college. At the time I had a very tough professor — Dr. Louis Philippe Rochon. He was a post Keynesian, essentially economic nihilism, and as a result we read a lot of obscure original texts and papers. One of the papers we read was by Hyman Minsky.

In light of today’s economic meltdown a lot of researchers have been looking for clues from the past, and many have settled on Minsky’s “Financial Instability Hypothesis.” As I understand it — I never spent much time with Minsky as he is a bit of an obscure economist — the theory tries to bring speculative bubbles and their subsequent popping into the orthodoxy of market dynamics. This insight was likely pretty accurate for our meltdown in 2001, however it is the wrong theory for today.

Right economist, wrong theory!

If we are looking to understand today’s meltdown we instead need to look to Minsky’s theory of “Financial Innovation” (I’m trying to dig up my old notes and will post a link to the paper once I find it). The crux of Minsky’s argument — its worth noting that he was a bit of a pessimist — was that regulatory bodies, no matter how well meaning, cannot regulate as fast as financial institutions innovate. Therefore at a high enough interest rate banks and other lenders have the incentive to “create” money through financial innovation.

I would argue that the option ARMs and other exotic mortgages created in the last 10 years were just the financial innovations that Minsky was theorizing about and in essence built an infinite money supply. That money supply (in the guise of the housing market) was driving the economy most of the last 7 years.

What we are experiencing now is the crumbling of all that “innovation” upon which we built our economy, and the money supply is “correcting” back to a more realistic level. In the process a lot of wealth is getting destroyed. My guess is Minsky is happy he died well before his theories proved as prescient as they have.

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I’ve spent a lot of time this past year thinking and talking about mashups. As Dion Hinchcliffe pointed out after the Web 2.0 Expo earlier this year the market has really begun to mature. Of all the Web 2.0 tools and approaches, mashups are the most complex and as a consequence one of the more interesting from a strategy standpoint. In my May report, The Mashup Opportunity: How To Make Money In The Evolving Mashup Ecosystem, I discussed the three major mashup types: presentation, data, and logic. (A brief aside: its amazing how out of date the below graphic looks already, a mere 7 months later.)

When looking at the market opportunities my focus has been mostly on the later two types of mashups. This is where the mashup platform vendors — JackBe, IBM, Serena Software and newcomer Corizon — all play and, ultimately, where the most money will be made. It would be going to far to say I have ignored presentation layer mashups outright, but in all honesty the market there is not nearly as dynamic as in the other two categories and is in many ways indistinguishable from basic portals. The focus is on bringing content near other content, not data transformation or insight which we see in the most complex mashups.

That said, I was reminded this past week of exactly how much room there is to run in the presentation layer mashup and widget space by, of all things, ESPN. I was reading a game recap of the Michigan upset of Duke in Men’s college basketball and came across the simple game recap data presentation at right.

In one simple graphic I saw all I needed to see: it was a close game; there were lots of lead changes; Michigan pulled away with about 7 minutes to go in the second half and never gave the lead back. In other words, there was a ton of information wrapped up in one simple presentation.

Now, lets compare the Michigan/Duke game to another on the same night, Vermont at Pitt. Same chart, new data and we see a very different game. Here we can see that Pitt went on a quick run to start the game and never looked back, shellacking Vermont by nearly 30 points.

These simple graphics — widgets or presentation mashups if you like — provided a ton of information in a very neat package, saving me the trouble of reading the specifics for anything more than details.

In a business context this style of data and content presentation can be tremendously valuable, despite the relative simplicity of the application. Think of this same graphic with sales data versus plan, feature burn down rate, or project milestones over time. This information is available today, of course, however the presentation of that data is not nearly as elegant or accessible. Business intelligence software — which this application most closely resembles — is not yet focused on these simple, business-friendly applications, and thus far no mashup or widget vendors have focused on this type of solution for the enterprise.

It seems to me there there is a market gap here: basic presentation mashups and widgets for the lines of business, surfacing these types of simple data presentations on desktops, intranet pages, and in SharePoint. I would be shocked if Clearspring or Widgetbox couldn’t easily do this today, but neither company seems to focus much attention on the enterprise. And the mashup vendors like JackBe, IBM, and Serena seem much more focused on the lower volume, higher margin business of data and process mashups. Even Lotus Mashups, the business friendly mashup environment from IBM feels a bit too heavy for something this simple but useful.

Don’t get me wrong, the mashup platform vendors are right to look elsewhere when committing development and marketing resources; this would have to be a volume business and a tough one at that. But at the same time there is real value here for either the widget vendors, a start-up, or (more likely) the BI vendors who will use this kind of presentation mashup to drive license use and application stickiness.

What do you think? Has anyone seen these sorts of simple presentation mashups and widgets in action in a business context? Are the BI vendors farther along this path than I am giving them credit for?

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I find it hard these days not to glaze over when I see article after article about the death of the newspaper industry. It’s an industry in what looks like a death spiral, and has been for quite some time. Surprisingly though the news seems to get worse nearly every day.

So it was with much sadness that I read today (in the Wall Street Journal online edition delivered via RSS) that the Detroit News and Detroit Free Press, the two remaining daily newspapers in Detroit, are expecting to stop delivering physical newspapers all but three days a week. My normal response would have been to note this as yet another sign of the death of the industry — as I imagine most everyone else has — but this one struck close to home; literally.

Though I live in San Francisco now I was born and raised in the Detroit suburb of Grosse Pointe — where my grandmother, parents, brother, and extended family mostly still live — and grew up reading the Free Press. My parents have subscribed to the paper for as long as I can remember and it was my first introduction to newspapers, current events, and becoming an informed citizen. My mother worked for both the Free Press and the News as an art director, and many of my parent’s closest friends still work in the industry. It would be fair to say the the paper was a constant presence in my life, though in many cases it went unnoticed, only remarkable when there was a protracted labor dispute in the 90’s, a frame worthy front page when the Red Wings or Tigers won a title, and when Mitch Albom stopped writing a daily sports column.

But like most newspapers those in Detroit have been hit hard by the systemic changes in the industry, namely the Internet, and more accurately Craigslist. It has been hard not to notice the impact. A couple of years ago I had the pleasure of coming downstairs one morning around Christmas to see my father — who is 6′4″ — sitting in his usual chair straining to read a paper the size of a comic book. And now the companies are planning to stop delivery of those comic books all together, save Thursday, Friday, and Sunday, the most lucrative of days. Though I believe strongly in the power of the Internet, business efficiency, and progress, its hard not to feel disappointed.

From a strategy standpoint the newspaper industry is serving as a stark reminder of how nasty the innovators dilemma truly is — though calling the News and Free Press “great companies” may be a tad hyperbolic. Its clearly difficult to walk away from profitable businesses in favor of the inevitable future. But what I find more interesting here is not the destruction of long standing institutions but the lack of a viable economic alternative to take its place. While Craigslist is wildly popular it does not come close to matching the revenues of the newspapers it is leaving in its wake. Yes, Craigslist doesn’t even try, but I have a hard time believing it could if it wanted to.

If we were to be perfectly honest though newspapers have always been a strange beast: a forced bundle of journalism people were willing to pay a bit of money for and classified ads which pulled in the real cash. All with advertisements tossed in on top for good measure. The Internet has blown that bundle to pieces — as it has done with the musical anomaly called the “album” — and they have all been sold off at the lowest possible prices; reporting is free (with ads of course) and classified are mostly free (save a few select ads and a few select markets that subsidize the rest of us; thank you San Francisco job postings and erotic services).

I’m all for killing off inefficient industries, but in this case we don’t seem to be taking inefficient resources and capital and moving them to more efficient uses. Maybe its because I think citizen journalism is a sham, but real journalism practiced by newspapers is a critical part of how our society stays on track and nothing seems to be coming up to take its place. This despite the fact that it is an incredibly valuable service. Just this week we’ve seen a corrupt governor go down in no small part because of intrepid reporting from the Chicago Tribune. Ironically The Tribune Company filed for chapter 11 at exactly the same moment they filed the story; its hard to believe the governor would be on his ass today if the Tribune was already gone.

The simple problem is that We The People have been conditioned to think of journalism as a free good. This is not a new development; over the last hundred years the price we pay for journalism has been slowly coming down as it was subsidized by classifieds and advertising. Mostly what people pay for in a newspaper subscription is the convenience of delivery and the pleasure of holding a physical object. Now the News and Free Press are left with just the reporting as a viable offering but have priced themselves out of a business model. Further, nothing short of ‘free’ will work for anyone else trying to provide journalism. We’re not even willing to pay to remove the ads!

Frankly, I don’t see an easy way out. We’re in a situation which, in economics, we call path dependent. The newspaper industry started down this road years ago making rational choices, but now is unlikely to survive as more than a shell of its former self because of those very choices. And the rest of us appear to be screwed, as we have been trained to expect free journalism so no viable replacement business model is apparent. There are a lot of very smart folks looking at how to save journalism and it appears the numbers just don’t crunch.

So, consider this a warning to other industries: bundling is a thing of the past. You must assume hyper efficiency in the future and prepare for it today. Its the only way to stop yourselves from becoming path dependent.

As for this post, consider it a love letter to my hometown newspapers, or at least what is left of them. And a recommendation that they buy a few more servers; at least make it a fair fight.

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In late 2007 I took a long look into my crystal ball and wrote out nine specific predictions for the enterprise Web 2.0 market for the coming year. Well, its that time of year again — I will be writing up another series of predictions in a Forrester report over the next 2 weeks — and it felt like a good chance to look back at my 2008 predictions and see how I did.

So, in that vein, lets start with the easy ones: Trial deployments in 2007 will deepen in 2008

Last year I wrote “Forrester has seen the adoption of enterprise Web 2.0 tools consistently follow a tried-and-true pattern: technology investigation, experimentation, roll-out to small groups or teams, and finally widespread adoption. The vast majority of deployments followed this pattern in 2007, but as of yet very few have hit the point of pan-enterprise adoption. While we don’t expect every deployment to balloon to its full potential in 2008, we expect that enough will grow to provide solid revenue growth within existing installed bases.”

So how did I do? Well this was an easy one: Yes, deployments in 2007 deepened in 2008. Unfortunately our Business Data Services data on the topic is not yet out of field — be on the lookout for that data in a few weeks here and in a full blown report — but the anecdotal evidence makes this one a foregone conclusion. Even despite the soft economy for most of the second half of 2008 I consistently dealt with firms that were expanding their deployments, either to more employees, more customers, or more products and features.

In other words, Web 2.0 is here to stay. In late 2007 I actually had discussions with CIOs, CMOs, and others where this was not yet a foregone conclusion — hence the prediction. In 2008 I can’t remember the last time I had that discussion.

Score: Oliver – 1, Market – 0

Up next, IT departments will take their heads out of the sand and embrace Web 2.0 technologies. 

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