Enterprise Web 2.0 Spending to Reach $4.6 Billion

On the eve of the Web 2.0 Expo in San Francisco, Forrester Research released a report stating that enterprise spending on Web 2.0 technologies will continue to rise over the next five years, growing 43 percent each year to reach $4.6 billion globally by 2013.

The five-year forecast from Forrester, released April 21, features a breakdown of future business spending on technologies such as social networking, RSS, blogs, wikis, mashups, podcasting and widgets, as well as an analysis of enterprise Web 2.0 spending across North America, Europe and Asia Pacific. The report forecasts that enterprise spending on Web 2.0 technology will "get hot" in Europe and the Asia Pacific region in 2009.

The report notes that large businesses, including General Motors, McDonald’s, Northwestern Mutual Life Insurance and Wells Fargo, all use Web 2.0 tools extensively and that 56 percent of North American and European enterprises say Web 2.0 will be a priority this year.

“Software firms can make money selling enterprise Web 2.0 software, but it will not be an easy road to hundred-million-dollar run rates,” Forrester analyst G. Oliver Young, the lead author of the report, said in a statement. “The market for enterprise Web 2.0 tools will be defined by commoditization, eroding prices, and incorporation into enterprise collaboration software over the next five years. It will eventually disappear into the fabric of the enterprise, despite the major effects the technology will have on how businesses market their products and optimize their workforces.”

The report indicates that the current enterprise Web 2.0 market is small but growing. The spending by enterprises—those companies with 1,000 or more employees—will reach $764 million in 2008, but grow quickly over the next five years, representing an additional $3.8 billion in spending.