I’ve spent a few weeks now playing with Google Wave, and like most people who first encounter the service I started out deeply confused (see below for my exploratory exchange with Forrester RA extraordinaire Zack Reiss-Davis). As I got further into the tool I began to get a much better feel for the value it brings to the table. For a comprehensive write up see Daniel Tenner.

So what is the biggest frustration with Wave? It’s not integrated with my email. I now have two inboxes — three if you count Google Reader. Thanks Google. I have no idea when new Wave messages come in. Now admittedly this is a pretty minor quibble, but what I quickly came to realize, however, is that this problem of integration is a MUCH bigger problem than just two inboxes. What it means is that Wave will never take off as an email a stand-alone collaboration client.

Lets start with the assumption that Wave is the next paradigm in corporate email, IM, and collaboration. How will the tool be adopted? Presumably corporate IT will either proactively decide it has value or (more likely) cave to pressure from a subset of the business and start offering Wave or a Wave-like tool for employees. So what happens when the team that desperately wants Wave needs to collaborate with a coworker that doesn’t have Wave? That other employee is either SOL or he has to get his butt on Wave. That’s right, there is no clear way to use Wave in a mixed-modal environment — either EVERYONE is on or it’s simply not going to work. Having closely followed the enterprise software space for quite a while now I can assure you that no matter how much people dislike email you’ll have to pry Outlook out of their cold dead hands. To make matters worse its not like one single company can easily make the cutover either; if you abandon a traditional email client in favor of Wave you’ll constantly interact with customers, partners, and vendors who can’t make use of the Wave construct. Not too bad if you can mix traditional email and Waves into one inbox (which is undoubtedly coming) but how on earth do you invite someone into an in-progress Wave if they only have a traditional email client? (To see exactly why this is a problem take a look at Daniel Tenner’s writeup).

I have faith in Google’s ability to engineer themselves out of major computing problems, but I have yet to see them truly commit to a user experience and see it through to the end. Maybe Wave will be different, but I’m not holding my breath.

That all said, I do believe that Wave can be extremely valuable, but not as an email or IM client. Instead Wave should be applied to a collaboration environment like SharePoint or Jive. In this scenario we would abandon the Wave inbox almost completely and instead focus on creating and embedding individual Waves in workspaces and projects. Anyone with adequate permissions would be able to navigate to the Wave, comment, add value, hit replay, and quickly collaborate with colleagues. Here Wave is simply another content type. However even more likely is a scenario much like what SAP has already shown with its own Wave integration. Here Wave is simply the user experience on top of another artifact — in this case a business process modeling tool.

The Wave interaction model is very cool, and definitely groundbreaking. Advances like an appstore and federation will surely help push it along. But it will not kill your corporate email or IM; lets see what we can do with it elsewhere . . .

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One of the more interesting parts of the analyst gig is that clients have the opportunity to ask pretty much any question they like through the inquiry process. Sometimes the results in aggregate are pretty fascinating, but by and large I find myself answering the same general questions over and over again.

This was not the case a few weeks ago when I took what I expected to be a typical inquiry asking about how to kick-start an Enterprise 2.0 initiative. Instead of run-of-the-mill questions about staffing, content management, governance, and employee participation the client asked a very pointed question: how do we keep employees from unionizing with our Enterprise 2.0 platform.

All things considered I’m surprised I don’t get this question more often. The popular perception is that Enterprise 2.0 software is about revolution, and flinging open the gates to creative chaos. Possible, but not necessary. And for many companies, unproductive. So what should you do to make sure that the conversation in your Enterprise 2.0 system is to your liking? Here are few simple steps:

1. Do not allow anonymous posting: The simplest way to ensure the conversation is on-topic and constructive is to associate each and every artifact with an individual. If an employee knows their boss, CEO, etc. may see the comments they will be a lot more careful about what they say. This is, however, a double edged sword; in many cases employees will resist saying anything at all for just the same reason.
2. Publish your rules of the road: If you expect employees to comport themselves in one way or another you have to make sure they know what is expected. You should already have rules developed so make sure they are in an obvious place on the site and remind people from time to time of what you expect.
3. Use the keyword flagging features aggressively: Since most Enterprise 2.0 platforms were developed out of customer facing community software they generally have robust keyword flagging and moderation features built right in. If you are based in Chicago you may decide to flag “Bears” and “Packers” to discourage discussion of the NFL. But be careful, posts that contain these keywords should be moderated, not outright banned, especially if you sell bear skin rugs, or work for a meat packing firm.
4. Work with your HR, Legal, and Labor Relations departments at the very onset: Be sure to have a plan in place to deal with inappropriate content and behavior before you get rolling — your existing communications policy will likely suffice. The last thing you want is to put the company in legal jeopardy by reacting too vigorously to an incident. Plus you’ll want to have any legal or union “peculiarities” in mind before you start sourcing technology.

Now, I should say that I wholeheartedly believe that an oversight strategy that treats employees like adults and takes an open stance to employee communications is the better approach. But many firms still restrict access to websites like ESPN, Hotmail, YouTube, and Facebook and for those firms the above steps should get you well on the way to an Enterprise 2.0 strategy that allows for more dynamic employee collaboration and productivity without flinging the gates wide open.

Note: The above picture comes from the “battle of the overpass,” one of the most infamous union clashes of Henry Ford’s rocky relationship with the UAW in my hometown of Detroit. It should in no way imply the inquiry came from Ford. For a fascinating look at the circumstances of the photos themselves check out the Iconic Photos blog.

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Well, dead may be a bit of an overstatement, but it is clear that the phrase “Web 2.0″ is dying.

This week my new report “Inquiry Insights: Web 2.0 And Social Media Technologies, Q1 2009” hit the Forrester Website. Throughout a given year, Forrester fields thousands of inquiries from clients and non-clients alike . Analyzing the nature and frequency of these inquiries — while not yielding statistically significant conclusions — provides a fascinating window into the minds of IT professionals, marketers, and technology vendors concerned with specific topics and often shows major trends in technology interest throughout the technologies’ life cycle.

So what have we seen for the Web 2.0/Social media market? Though the arguments about what to call the market — consisting of blogs, wikis, social networks, RSS, widgets, etc. — have mostly faded away, what people call the market is no more settled than it was 3 or 4 years ago. The big shift: a move away from “Web 2.0″ and a move towards “social media” or even more frustratingly towards “social networking” as a overarching category (not pictured below).

The change has been occurring slowly over the last year or so, with the phrase Web 2.0 hitting its peak among Forrester’s clients in Q2 2008, and falling off from there. From my point of view Tim O’Reilly and John Battelle’s effort to evolve the phrase into “Web Squared” is effort well spent; Web 2.0 had been getting stale and had lost its cachet.

One final note for the Enterprise 2.0 enthusiasts out there, that phrase has clearly not caught on with Forrester’s clients yet at all. Partly this is due to the fact that — for reasons I don’t want to get into  — Forrester resisted using the phrase for the last couple of years, and partly because Forrester clients interested in Enterprise 2.0 topics also use the phrase social media. It makes life mighty confusing for our inquiry team whose job it is to route the questions to the right analysts.

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I’m loath to use this blog to just complain about things that annoy me, but this is one that REALLY annoys me. For some reason in the last couple of weeks the Wall Street Journal has taken to publishing a new RSS entry every time an article is updated. This has been bearable so far, but this morning I was faced with at least 20 different entries pointing to the same Yahoo!/Microsoft search deal (see below). I have yet to unsubscribe completely, but am thinking very hard about it.

For marketers there is a clear lesson: RSS, and social media in general, have a very low switching cost for users. A simple click and I’m gone. If you spam users, get too “salesy”, or get too far off topic users can easily move on to something else. The reward of an engaged audience can be high, but the risk of alienating them, or tripping over your own feet is high as well. Experiment, but be careful.

For The Wall Street Journal, please, for the love of God, fix your RSS feeds!

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[After a couple of years attending the Enterprise 2.0 show in Boston I decided to save myself the hassle of traveling cross-country and skipped the show this year. Turns out it was the best Enterprise 2.0 conference to date. My colleague TJ Keitt thankfully did attend and sent along the following impressions.]

Being Boston-based typically isn’t convenient for an analyst covering companies that congregate in Silicon Valley, which explains why this blog’s regular author decided to pull up his stakes and head West. But last week’s Enterprise 2.0 Conference happened to be held in my fair city, allowing me to drive 15 minutes to meet with vendors that would ordinarily require a six-hour plane ride. After spending two days cruising the pavilion where vendors showed off their wares to a business world at once fascinated with and wary of social technology, Oliver asked me to share my impressions.

Going to this conference, what I really wanted to hear from vendors was how you go about convincing end users to take up your blog, wiki, social network, etc. This is a question that has been coming up more and more as companies shell out money for solutions that will ostensibly make their employees more collaborative, only to find that just a small sub-segment of the workforce is actively participating. It is particularly troubling for companies trying to move their workers off of social technologies that they do not control, like Yammer, and onto solutions that they do, like the vendors on display at Enterprise 2.0.

Coming into the show I didn’t feel that the vendors had a particularly good answer. Walking away I was left with much the same impression. There wasn’t a clear sense among the vendors as to how to spur adoption, and some of the answers they provided were wanting. For vendors who target lines of business in a bottom-up manner, their schemes for viral adoption work so long as users actually take to it and the IT department doesn’t eventually shut them down in favor of an enterprise-wide solution. For those with a more traditional IT-centric selling scheme, their reliance on corporate standardization on their offering works only so long as end users accept it and don’t have workarounds that they prefer. What I did not hear from these groups are the three things that I think are crucial to encouraging use amongst the rank and file:

1. Helping business leaders map out what specific business problem the tool will solve. What we typically hear from information and knowledge management professionals is that there is some corporate mandate to “be more collaborative.” So, someone is put in charge of finding tools to make this happen. But without a clear sense of what “be more collaborative” means in the context of the business, there is no clear vision of who will be affected by the tool, what issues they face in their work and where a solution can begin to help the workers. [Oliver: I could not agree more. I hear from WAY too many businesses who's stated goal is to "collaborate better"]
2. Providing assistance in re-engineering the business process that will be served by the tool. When bringing in any new technology and telling workers to use them in their job, you are mandating that they fundamentally change the way they work. This can be especially hard for someone who has become accustomed to doing something one way over the last ten years. A vendor could play a significant role here if they are willing to provide the professional services to help a client figure out how to tune the business process to naturally route people to the tool without completely disrupting their work.
3. Embedding the tool within areas that the information workers live. Going hand-in-hand with the business process re-engineering is having the tool attached to the applications that the workers use in the course of their job. This is what makes offerings like EMC’s CenterStage and Microsoft SharePoint so compelling – the social tools are linked to the content that information workers are using in their daily job. This makes the experience natural and part and parcel of the assigned task.

Now, I am not saying that I did not see any of these things in the tools that I viewed at Enterprise 2.0. Most of the vendors had a story around the third point, but I did not see the complete vision – tying all three of these things together. For the point solution vendors, this combination of smart sales, consulting and product design can go a long way toward making them relevant as we race toward Oliver’s “Day of Reckoning.” And what could create excitement among those of us somewhat jaded from hearing the same pitch over and over is vendors coming up with innovative ways to address those three issues to drive end user adoption.

[Give TJ a piece of your mind in the comments or at tkeitt [AT] forrester [DOT] com]

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Chris Lynch over at CIO Magazine has a nice write-up on the Enterprise 2.0 market that is likely to ruffle a few feathers — Microsoft Sharepoint vs. Enterprise 2.0 Start-ups: Day of Reckoning Arrives. All in all the article does a very nice job of aggregating a diverse set of viewpoints and there are a few quotes from me personally (turns out I was the one to call Sharepoint 2010 a “day of reckoning”).

There are few things that do need a little clarification:

• The day of reckoning is at least a year off. SharePoint 2010 won’t be out this year, and it will take 4-6 months before a mass of companies actually complete their rollout. That said the SharePoint marketing machine will likely start working overtime in the next few months, so the impact will start to be felt before then. Then again I was speaking at the Gilbane Conference last week and noticed the Microsoft booth was still pushing SharePoint 2007.
• Existing Enterprise 2.0 customers will be unlikely to sink a lot of resources into switching. For companies like Jive, Telligent, NewsGator, and Atlassian the problems with SharePoint 2010 are going to crop up with new deal flow. It is unlikely that existing customers will jump at the first opportunity to take on a major transition that will require major IT resources, content migration, and (most importantly) user training.
• The market will be defined by incremental innovation for the foreseeable future. In the article Ross Mayfield, president and chairman at Socialtext, makes the important point that Microsoft is on a much longer development cycle than its smaller competitors: “A year ago, the idea of having micro-blogging and activity streams for the enterprise was a new concept. Well, that’s around the time they probably froze the spec for SharePoint 2010. Overnight, the demand for social software changed, and it will change again.” These innovations will have an impact on the usefulness and fidelity of Enterprise 2.0 tools, but I would not characterize these as major innovations; it seems unlikely that many companies will make a decision based on these incremental innovations.

Now, while I do believe that there is a base level of collaboration that will become a commodity (the broad collaboration that Microsoft and IBM will provide) there are some very important ways that the smaller vendors can stay relevant.

• Focus on the customer facing market. The customer facing side of enterprise Web 2.0 — the use of these tools by marketing departments — is going to remain hot, and differentiated, for quite a while longer. There is big business here and most vendors in this space already play in both camps.
• Tie the internal and external market together. Customer facing communities are great, but few thus far are having a real material impact on the business. Why? It’s a long manual process to take insight from the community and bring it into the business. Those vendors that can best tie these external marketing communities to internal productivity and collaboration communities will help their customers truly realize the value promised.
• Provide customer and partner communities. The extranet has long been the red-headed stepchild of enterprise collaboration because, frankly, its costly to get customers and partners working alongside employees and so far the tooling has been poor. That problem is rapidly disappearing and the vendors that can best equip their customers to get real work done with outside groups stands to make a lot of hay — and unless Microsoft changes its licensing model this is not a place it can compete.
• Get vertical specific or process specific. If the base level of collaboration is commodotized what is the next logical step? Get more relevant to the business. This will mean creating collaboration applications or modules specifically tuned to the industries and processes of the customer and providing a much improved out of the box experience for things like project management and innovation as well as a top shelf application for Law firms, doctor’s offices, and restaurants. NewsGator is already heading down this path with innovation and PbWorks is already heading down it for Law firms. Its a smart move and will save a lot of companies.

All told this market is set for a major change, and many of the vendors we know today will no longer exist — Microsoft is raising the bar and some vendors won’t get over it. But some will, and those that do should have solid businesses to show for it.

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A few months ago I went looking for technology vendor Facebook applications and found one from Microsoft that had just launched: Microphone. At the time there was not much activity, but I recently checked back in and was impressed with (at least parts) of what I found there. Now, I should admit that I am grading on a curve here; most of the apps I found were miserable, like this one from HP.

So what about the Microsoft app works?

First, the entire application has a gaming element to it and they award prizes to the most active users. Time and time again we see that these sorts of competitive games resonate with users and Microsoft has done a nice job of taking advantage — if you notice the leader board is monthly, so no one should feel completely frozen out.

Second, they have taken steps to incorporate other social networks and communications tools like Twitter. Microsoft has taken good advantage of a SocialEyes application to scrape Twitter and bring the conversation into Facebook (see below). I’ve actually never heard of this company but LOVE the approach; has anyone out there worked with them in the past?

Third, they have focused on tangible business functions like market research. A lot of companies have made forays into Facebook, Twitter, and other communities over the last few years and thus far few have real tangible business value to show for it. With this implementation Microsoft has done a great job of keeping their feet firmly planted on solid ground, focusing on customer care and market research. I am likely a bit biased by the fact that I am a market researcher, but this aspect of the application is especially well thought out. For example we see Microsoft measuring customer reaction to recent television ads (see below). Admittedly this is not a substitute for real quantitative market research, since anyone adding the Microsoft Microphone application is likely a bit biased in the first place, but if done right it can provide solid directional data at almost no cost. The poll question about joining a programming competition is spot on — you already have a group likely to participate and this can be a great way to get their input.

Now, I would lose my analyst card if I didn’t lob at least one stone at Microsoft and this one (at least for me) is a doozy. Look closely at the Apple and PC TV ad questions. Notice anything? Oh yes, they inverted the scale from one to the other, starting the Apple ad scale at “Hate it” and forcing people to keep reading if they don’t hate it. For the PC ad they start at “Love it” and head back the other direction. Subtle, but a MAJOR problem if you are looking for objective research! Then again, maybe the marketing guys were looking to show some success to management, in which case, carry on gentlemen.

All things considered this is one of the best vendor Facebook applications I’ve seen and it should serve as a pretty good model for others, even those selling B2B — know your audience, provide them some value, provide them an engaging experience, and keep it grounded in real business needs.

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I’m currently at the Atlassian Summit catching all the updates to Confluence — one of the most popular enterprise wikis in the world — and generally taking in the scene of a small company that is amazingly open and customer focused.

This morning’s keynote was run by CEO Mike Cannon-Brookes and at the very beginning he ran through the corporate values for the audience of mostly customers and developers. He explained that the values had been set several years into the company’s existence when the management and employees got together to codify what the company was all about.

The results (censored for your protection, though they were out in all their glory in the session):

1. Open company. No bulls#!%.
2. Build with heart and balance.
3. Don’t f*!# the customer.
4. Play as a team.
5. Be the change you seek.

I spoke to a couple of Atlassian employees about the values and it turns out they are more than just vague corporate platitudes; they are often invoked to solve disputes internally, and to push employees to better performance.

Over the last few years customers have become increasingly demanding of their vendors, and are now expecting

• Visibility into the direction of your company
• Community that shares purpose and knowledge
• Influence in the future direction of products they care about
• Opportunity to learn from vendors and peer

The Atlassian corporate values do a nice job of mixing both increasingly demanding customer needs with corporate needs — customers for example don’t care about being the change you seek — and have lead a small technology vendor to an enviable growth rate, out-sized market position, and fantastically loyal customers. I’d say these corporate values are worth emulating; with or without the colorful language, depending on your audience.

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Tomorrow morning (8AM PST, register here) my colleague Laura Ramos and I will be hosting a Forrester Teleconference detailing some of the early findings from our recent business to business (B2B) social buying survey. In preparation I have had my head WAY down in the weeds of the data and, as I did a couple of weeks ago, I wanted to surface one of the gems I uncovered: how technology buyers look at forums and social networking sites.

Forums are in many ways the old warhorse of both social media and the Internet, so not surprisingly they are heavily featured in our survey of B2B social media. They are heavily used by technologists, especially those in a highly technical discipline like hardware virtualization or storage. And they are often the most fleshed out social media in any technology vendor’s toolbox. Further, they can serve as a fantastic jumping off point into more full-featured social networking, as Dell has already begun to show.

For marketers one of the big questions is how great an impact do these sorts of forums have on a purchase decision? We know they are used for technical problem solving, but do buyers check them out before making a decision? The answer, is most definitely yes, but not to the extent we might expect:

When we asked respondents to rate the extent to which they prefer visiting forums and social networking sites to gain information about a purchase we find that exactly half prefer not to. A little more than one-in-four buyers prefer to use these sites for information gathering, and only 11% strongly prefer them. Forums perform a bit better among members of the IT department, but not much.

For marketers this should come as a relief. Few marketers have any sway whatsoever over support forums and communities and if buyers were making heavy use of them when vetting a product or vendor it would probably lead to some long political battles about how to manage, present, and even participate in these forums. For now, bullet dodged. That said, these forums have a ton of value for buyers, and while they may not be making use of them extensively today, many expect to going forward: When we asked respondents which emerging information sources they will look to over the next 12 months 60% cited forums and social networks, almost twice as much as the next most popular choice.

Marketers, start laying the political groundwork now. In the next one to two years your technical forums are likely to become a much bigger part of your social media strategy.

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[UPDATE:  Andrew McAfee has critiqued my post on his blog here. Valid points, all. My reply is below, and on his original post.]

My former colleague Pete Kim has been on a roll lately. A week ago he challenged the blogosphere to become more than just an echo chamber — he even challenged me personally to “really turn it on.” This weekend he clarified further to say that social business is business. And today he goes on to explain why he believes Web 2.0 still matters. Like any good colleague, Pete has pushed me to clarify my own thinking on the subject.

As an economist — and a micro-economist specifically — I look at Web 2.0 through the lens of Coase’s The Nature of the Firm and the eventual refinement and expansion of his theory over the last 80 years. So what do I see when I look at Web 2.0, social media, social software, and whatever else you want to call this thing? I see a fundamental rethinking of the definition and function of the firm; the single biggest change since the industrial revolution.

Yes, that is some over the top rhetoric, but consider the facts: Since the industrial revolution the basic creation of economic value has followed a pretty simple path. Firms acquire capital, labor, and resources, combine them into a valuable product or service, and sell the product or service to individuals or other businesses who consume that value. In this system is it incumbent on the firm to create value, and the role of the buyer is to consume value. End of story.

What Web 2.0 software has done is give firms the tools to blow the doors to value creation wide open and invite customers, partners, experts, and prospects into the process. Think of a social network like the ones run by Communispace; here businesses are opening the doors to the product development, marketing, packaging, and distribution process to customers who add value every step of the way with their preferences, ideas, and reactions. The firm is no longer creating value alone, it now has help.

Skeptics will argue that this sort of value has always been provided to the firm through focus groups and other market research. While it is true that these functions have brought in outside opinion and value in the past, they have never before operated at the scale that truly social software allows. Instead of a one-off focus group for 8 hours with 20 people, firms now have the ability to conduct perpetual focus groups with as many people as care to join. This, needless to say, is a big change.

Over the next 10 to 15 years, on the back of social software, we will go from a fundamentally closed value creation system to a fundamentally open one. The firms that get their first and with the greatest depth stand to profit wildly, while those that do not embrace this change will be stuck with a slower pace of innovation and industrial revolution-era economics and resource constraints. Firms that embrace the community will harness vast amounts of community value at almost no explicit cost. Again, this is a huge transformation.

If you have spent any time speaking with me or reading my research in the last two to three years you have likely heard some version of this before. My colleagues as well have been writing about this change — see Peter Burris’ Community Marketing report for a great marketing focused example. Over the next year my goal is to expand and deepen Forrester’s coverage of this shift, eventually providing firms with a road map of how the move towards open business will play out, and where they can take confident steps forward. First up is a report tentatively title “Community Evolution: How Loosely Coupled Communities Of Interest Will Mature Into The Tightly Bound Economic Actors Of Tomorrow.” The report will aim to answer:

• What types of products and services will communities provide in the future?
• What business models will facilitate those communities? Will they be for-profit?
• How will communities evolve over time?
• What should businesses do today to prepare for the change?

If you are interested in contributing to the research please let me know in the comments, or via email. Pete, expect a call for an interview shortly.

This, as you can probably tell, is something I get very excited about, and I am thrilled to share my findings with you, and the rest of the world. It may sound self-serving, but I don’t think there is a better job in the world right now than an economist focused on technology. It’s an exciting time to be in research!

(photo courtesy of hagit, via flickr)

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