Thursday, August 14, 2008

Web 2.0 needs time to grow

Emerging technologies will take two years to demonstrate their worth

Janie Davies
Ambrose McNevin
13 Aug 2008

Adoption of the latest technologies such as green IT, cloud computing and Web 2.0 applications including social computing platforms for business transformation, are two years from having a major impact on business.

Two separate sets of research this week revealed that adoption of the latest technologies has some way to go.

Analyst Gartner highlighted 27 technologies in its 2008 Hype Cycle for Emerging Technologies while McKinsey’s Building the Web 2.0 Enterprise examined the adoption of tools such as wikis, blogs, social networks and mash-ups.

According to McKinsey’s research, businesses are finding that effective use of Web 2.0 tools such as social networking, wikis and blogs can be short lived, and some are abandoning them altogether.

Despite an increase in take-up since 2007, 22 per cent of executives at global companies are dissatisfied with Web 2.0 tools and only 21 per cent are happy, the survey found.

And while just a quarter of respondents said nothing was holding back their Web 2.0 initiatives, 28 per cent cited a lack of understanding about the potential financial benefits as a key barrier, and 37 per cent said their company culture or leadership team did not encourage Web 2.0 use.
Other problems included a lack of sufficient incentives and skills to implement technologies, and the view that potential legal and HR risks would outweigh the benefits.

Web 2.0 use for internal purposes has increased by one per cent between 2007 and 2008, but interfacing with customers dropped four per cent and connecting with partners and suppliers fell eight per cent ­ see The growth of Web 2.0, below.

Knowledge management was the most common use for Web 2.0 for internal purposes, cited by 83 per cent of respondents, and 78 per cent said the tools supported collaboration across the company.

When used to interface with customers, 73 per cent said customer service was improved and 71 per cent said Web 2.0 helped them acquire new customers in existing markets.

Gartner’s annual Hype Cycle research said that following the phenomenal success of consumer-oriented social networking sites, companies are examing the role that enterprise sites using networking elements will play. Key areas for development will include the notion of social platforms for developers to build on basic social networking applications.

“Although Web 2.0 is entering the trough of disillusionment, it will emerge within two years to have transformational impact, as companies steadily gain more experience and success with both the technologies and the cultural implications,” said Jackie Fenn, Gartner vice president.
“Later, in between two and five years, cloud computing and service-oriented architecture will deliver transformation by driving deep changes in the role and capabilities of IT.”

Cloud computing is drawing interest, but, said Gartner: “Many types of technology providers are aligning themselves with this trend, with the result that confusion and hype will continue for at least another year before distinct submarkets and market leaders emerge.”

Gartner believes that the next two to five years will also see video telepresence and microblogging begin to affect the day-to-day corporate world. Currently the high cost of entry is stopping mass adoption of video telepresence.

“Other technologies that have begun to be interesting to business include 3D printing, surface computing, augmented reality and mobile robots,” said Fenn. “We expect early adopters to start applying these in novel ways and driving new classes of applications.”

How analysts view the growth of Web 2.0

Although Gartner’s Hype Cycle places Web 2.0 as now entering the trough of disillusionment, it says that it will emerge within two years as having a transformational impact as companies gain more experience using the technology.

What McKinsey’s research says about how Web 2.0 tools are being used both internally and externally:

Internally Web 2.0 tools are being used to managed knowledge, foster collaboration across the company, enhance company culture and for training.

Externally they are used for improving customer service, finding new customers in existing markets, engaging customers in product development, and letting customers interact with each other.

For managing partners and suppliers, Web 2.0 is being used to achieve better integration, tapping networks of experts, lowering purchasing costs and getting supplier participation.

Computing is the UK's leading business technology publication. We are an advocate for the critical role that technology plays in business and government, and aim to help our readers understand how IT can improve company profits and deliver better public services.

© Incisive Media Ltd. 2008


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