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Who in the midmarket is using Enterprise 2.0 and Web 2.0 applications?

Wikis, social media and RSS may be used most at larger companies -- but midsized firms may have the most to gain from the communication and collaboration tools.

Enterprise 2.0 is generally understood to be the business application of collaborative Web 2.0 technologies, including wikis, social media, blogs and Real Simple Syndication (RSS). But how popular are such tools?

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Forrester Research Inc. analyst G. Oliver Young wrote last spring that Enterprise 2.0 adoption is strongest in larger companies, with 51% of Global 2,000 companies planning to buy software in 2008. Compare that with 41% of companies with 1,000 to 4,999 employees, 33% of companies with 500 to 999 employees and 26% of companies with 100 to 499 employees.

"In many ways, Enterprise 2.0 software is better suited for SMBs than it is for large enterprise, but the irony is that SMBs or midmarket [companies] tend to be slower to adopt," said Joshua Holbrook, director of enterprise research at Yankee Group Research Inc. in Boston.

Holbrook said he expects midmarket adoption to pick up as "bleeding-edge" companies demonstrate Enterprise 2.0 deployments with good results. Steve Wylie, general manager for this year's Enterprise 2.0 conference in Boston, agreed. The conference's case studies from large companies like FedEx Corp. and Pfizer Inc. could be instructive, he said.

Pfizer launched an enterprise RSS project and corporate deployment of its own Facebook-like application this year.

If you can do what we're describing at Pfizer, then man, the rest of us should be able to figure this out.
Joshua Holbrook
director of enterprise researchYankee Research Group Inc.
In fact, those two types of Enterprise 2.0 applications have been among the most popular, according to Forrester. Spending on social networking software by enterprise-sized companies in 2007 was nearly twice that of the next most popular type of Enterprise 2.0 software, RSS.

Spending was also strong for blog and wiki software, with mashups, podcasting and widgets less popular. Still, Forrester expects the entire Enterprise 2.0 software market to triple between 2007 and 2009 and triple again by 2012. The spending projections did not include small and midmarket companies, and were made before the real recession set in.

Companies trying Enterprise 2.0 software will most likely use social networking programs from companies like Awareness Inc., Jive Software and Communispace Corp., according to Forrester. The analyst firm calls the Enterprise 2.0 market "small but growing."

Though barriers to Enterprise 2.0, such as security and reliability, haven't gone away, Holbrook said the technology is maturing as an enterprise play.

"I've seen a big shift over the last year or so where [Web 2.0] is becoming much more enterprise focused. It's no longer kind of a phenomenon. It's a trend that has legs and is not just buzz."

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