Is Anybody Making Money on E2.0?
February 6th, 2008by Jeremy Thomas
Thought I’d throw a provocative question out there.
Is anybody actually making money on Enterprise 2.0? When I say “anybody”, I mean software vendors and professional services organizations. And when I say “make money”, I mean “making a profit”.
You see it seems to me that profitability might help substantiate the market. It would mean that Enterprise 2.0 isn’t a theory or a term upheld by a bunch of jaded ex-consultants turned corporate hippies. And, selfishly speaking, it just might make me feel better.
Comments welcome as always.
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February 6th, 2008 at 6:12 am
Doing it profitably for 7 years now (and still haven’t touched the Sequoia money we got this past August).
Making money? You could say that.
February 6th, 2008 at 7:32 am
Do http://hinchcliffeandcompany.com/ and http://www.headshift.com/ count? I think both are doing very well.
February 6th, 2008 at 10:41 am
Good stuff fellas. I knew that somebody had to be making a living on Enterprise 2.0, but wanted to throw the question out there to stir the pot.
February 6th, 2008 at 11:01 am
I think the point that was missed the most in my Enterprise 2.0 market post was that I wasn’t saying that you can’t make money in the Enterprise 2.0 market, the point is that you are significantly limiting your ability to build revenues by going deeper in to individual industries.
Sam seemed to disagree with me ( http://gobigalways.com/consumer-web-vs-the-old-fart-company/ ) but then later came around: http://gobigalways.com/re-delete-the-enterprise-20-wikipedia-entry/ it seems
February 6th, 2008 at 4:37 pm
I think Microsoft and IBM are squeezing some extra money out of existing customers via web 2.0 stuff that’s been added to SharePoint and Lotus. Smart web E2.0 vendors like Atlassian have a very long customer list and must be making money.
By and large Enterprise 2.0 software is meant to be cheap or open source so it’s never going to give the 80% margins and 100K+ license fees of most enterprise software and the 20% maintenance fees that come with it.
February 7th, 2008 at 8:55 am
I agree that MS is raking in on E2.0 with SharePoint. Not only does Confluence have a large constituency, but it is doing great extending SP-as is SocialText and NewsGator. It is hard for me to consider SP as true E2.0 just because it has blogs or wikis. The architecture is still very much 1.0, and you have to do a lot to make it behave like 2.0. (tool tips, tags, search, profiles, connectivity and navigation). What is great is that the development environment around SP has come leaps and bounds in a very short time. Despite many development extensions being free, others that offer support will do very well.
February 7th, 2008 at 3:16 pm
Natalie,
I’m not sure I’d categorize SharePoint as E2.0 either. It certainly has a social element to it, but it’s certainly not marketed as social software. It is instead marketed as a content management system (I used to talk to companies about SharePoint as a consultant).
It will be very interesting to track Clearspace and Lotus Connections over the next few months to see how those products do with uptake (although I know Clearspace has over 200 customers).
February 7th, 2008 at 4:51 pm
My hats are given to IBM personally for jumping onto this space wagon very early. Their Lotus Suite is Web 2.0-enabled, and it just makes it much easier for corporations who have used their Suite of products all the time to adopt their products.
Having said that, I love CLEARSPACE!!!!
February 7th, 2008 at 6:14 pm
The point about SharePoint is that Microsoft are grafting Enterprise 2.0 onto it and that’s giving them some extra software revenue – and it helps SharePoint break out of department/team implementations. Once you blog or wiki on SharePoint a lot more people can find your content than just the small team you intended it for!
February 7th, 2008 at 8:24 pm
Lotus Connections has put together a fantastic set of different social productivity tools. Google should do some cool stuff, too.
On the revenue note, I’ve heard through the Lotus grapevine that Connections has sold $17M to-date. That puts us heads and shoulders above them and #2 to Sharepoint. Would be cool for IBM to confirm those numbers, though.
February 7th, 2008 at 9:18 pm
I wouldn’t dismiss SharePoint. I have seen some killer “skins” of SharePoint in the past few weeks. I would throw it into the mix on e2.0 “solutions.” By definition (SLATES or otherwise), it has all the ingredients of an e2.0 product. And you can’t dismiss the market penetration or MSFT’s interest in moving into this arena.
Yes, Atlassian is making money, and they’ve accepted zero investment. Of course, not all that revenue is tied to Confluence.
February 8th, 2008 at 2:19 am
I used to loathe SharePoint but I’m coming round. It can be E2.0 if you use it in the right way. But that’s the thing, out of the box and for most users it just isn’t anything more than a bunch of lists in a silo. It’s the non-MSFT people who know how to facilitate online collaboration that will push the boundaries of SP.
February 8th, 2008 at 9:29 pm
Susan and I had an interesting discussion today about SharePoint and how valuable an intuitive UI is. As Scott points out, the “E2.0″ SharePoint skins are developed by non Microsoft people. I think that positive user experience is a key ingredient to Enterprise 2.0, and it’d be ideal to have an E2.0-like interface by default on SharePoint. This might help Microsoft gain market acceptance that SharePoint is an Enterprise 2.0 solution. At this point I’m not convinced they view it as such.
February 15th, 2008 at 3:24 pm
We (GroupSwim) are just getting started, but we are seeing a strong market with great receptivity. IMHO – the hardest part is finding the right person in an enterprise to sponsor the E 2.0 effort, and more importantly, who controls the budget.