Who pays anything for mash-ups or widgets?

Some of these companies really do have problems that "office 2.0" products can address- one CTO I spoke with at a firm with ~30,000 employees said that his middle managers spend 38 hours a week reading and responding to email. There are tools out there that can help with this kind of problem, but management too often sees inefficient work flow as "a cost of doing business", and the tools that can save significantly more money than they cost as "luxuries" that require time up-front to adopt in order to save staff time in the future.

This is unfortunate, because using the wrong tool for the job can give everyone a headache and ultimately cost a company dearly. I think part of the problem is that the problems new technologies solve are not always line-items within a corporate budget- they are often hidden in the form of small transaction costs, and it is this lack of intra-corporate transparency that makes it hard for companies to appreciate the real and compelling value propositions companies offer them. I think of the tool my company, reframeit.com, has created as offering companies a functionality that represents a fundamentally new category of enterprise collaboration software- private, internal communication about the external public web in context. But I think that if companies in our sector let themselves get boxed into old categories, they hasten the commoditization that will ultimately be the undoing of their revenue models if they are not careful.

Look at the diagram - AVERAGE deal size. What sort of measure is that? Where did they get the numbers from anyway?

And what is a 12% revenue drop over 6 years when the hardware and traffic costs get halved every 18 months if not faster? Add scale and efficiency improvements and everyone can drop 50% off the price in 6 years and still be better off.

"In 2007, Forrester estimates that the few enterprises with mashup deployments paid an average
of $76,500 per deployment, with the lion’s share earmarked for mashup platforms like those
from JackBe, IBM, and Serena Software. Forrester expects that price to nearly double to
$143,400 per engagement by 2013."

IT needs to get its act togther early and get involved to ensure the business gets the responsiveness it needs while ensuring professional applications are built and managed.

A likely scenario: given that software prices are already a small component of total cost of implementing and supporting enterprise 2.0 systems, total costs [for enterprise 2.0 system implementations] will continue to rise given the increasing proliferation of solutions that require integration and support. (The folks in the I.T. departments understand that already.)

Put simply, the downward pressure on Enterprise 2.0 platform pricing is something that we're aggressively driving at Six Apart, especially with Movable Type, and as a result, I think we'll be the biggest beneficiaries.

For example, the social features on top of the Movable Type platform were previously available as a higher end solution called the Community Solution. With our last release, we folded them all into MT Pro, which starts with simple commercial pricing and only ramps up if a client wants to purchase an Enterprise license for additional management features. That's a model we've followed for years, with innovative features falling down the price curve from the high end to the standard commercial license and then eventually into free or open source offerings.

At the same time, as you've outlined, we're providing deeper and deeper integration. Oracle's blogging community, for example, is powered by Movable Type because it offers integration with key platform pieces like Oracle's database layer. That's something unique among serious Enterprise 2.0 platforms and again drives adoption versus the less complete, more expense, more complicated Enterprise 2.0 suites offered by traditional enterprise vendors.

And that, perhaps is the biggest thing missing from your comparison of the factors driving down adoption costs for this tech: We can do this because Six Apart is a smaller company with less overhead than the traditional tech vendors, who are optimized for suite sales that cost millions of dollars for software licenses, and millions more for integration and deployment. Our typical engagements are a fraction of that cost, even when you factor in the increasing popularity of our professional services.

So we think it's fantastic news if the cost-per-seat for enterprise blogging software is dropping -- that's happening in large part because Movable Type dominates this space and lets you power an unlimited number of blogs. And it does so at a tiny fraction of what it would cost to build even a portion of this capability on, for example Sharepoint.

Finally, I'd argue that, with all due respect, Automattic and WordPress are almost entirely irrelevant to the conversation about Enterprise 2.0. Popular as they may be for tech geeks or individual bloggers, no serious enterprise would consider that platform. WordPress is consistently insecure, meaning an average of a constant two to three week upgrade cycle just for maintenance, without adding any new features. Worse, the vaunted partnership that you'd mentioned as "taking on Six Apart" less than two years ago has completely collapsed. Despite Automattic's own founder and CEO assuring your readers of their interest in this market, and despite KnowNow being the sole provider of enterprise support for WordPress, KnowNow has gone completely out of business and their site doesn't even redirect to any other options. Frankly, I don't fault Automattic for focusing on other markets, as the enterprise is a tough market to break into if you're not serious about it. But I think it's pretty clear that enterprises would never choose a platform with that kind of track record.

The good news is, there is still plenty of great competition in the enterprise 2.0 space, and nobody's further ahead in creating a great social publishing platform than we are at Six Apart. In a tough economy when businesses are running very tight budgets, we think that strongly favors Movable Type as the platform of choice for driving down the costs of collaboration.

We're a small vendor of Enterprise 2.0 tool, and from our point of view, the problem with different tools will be not in their availability inside an application, but in integration.

Customers should be able to use their beloved tools, but all the tools should have same aspects within Enterprise solution, like 'being searchable and permissions-aware'.

NetVibes has almost all mashups available, but it's not an enterprise tool. RSS means nothing if you haven't collected all the data in one entry point.
So, we suppose the price would be not per-feature actually, but per-result of integration of all features available.
That's just a thought right now, but our current experience supports this point fine:
"pay not for the tools, but for result"

And thanks for this:
however we think that startups still have a few tricks up their sleeves when competing against bulky and often hard to use products like SharePoint
:)

I also find it strange that mashups are going increase in price for enterprises... doesn't make much sense. The best apps will still continue to get the most attention and money, but I can see the overall price of web 2.0 apps falling.

Brian
http://www.konnects.com

I disagree (speaking for Automattic). Our growth and revenues are not dependent on enterprise blogging. We've seen (much more) rapid growth in other areas of blogging, so those are the ones we've been focusing on.

most of the google gears offline database API has been included in the HTML5 spec - which firefox and webkit have implemented ( the local db storage ) in the latest nightly builds. It should be trivial to 'switch' from the gears API to the html5 spec.

this is probably the only way to move the web forward - write proprietary extensions, but be open about it, then have other vendors implement the spec, and finally, retroactively include it in the html spec. google/firefox/apple/webkit/mozilla have been pushing in this same direction.

so ironically - to get the ball rolling, the best way is to use proprietary extensions! (and hope microsoft implements it )