The following short paper examines the growing Enterprise 2.0 market and the main shortcomings that currently prevent it from achieving its full potential.

1. 2010‫‏‬
The Enterprise 2.0 Market – current
trends and market failures
A White Paper by IncrediCube
Composed by
Eyal Engelhardt Ari, PhD.
Co-founder and VP product, IncrediCube
IncrediCube Ltd.
‫‏‬

2. Copyright
Copyright © 2010 IncrediCube. All Rights Reserved.
Restricted Rights Legend
This document may not, in whole or in part, be photocopied, reproduced, translated, or
reduced to any electronic medium or machine readable form without prior consent, in
writing, from IncrediCube. Information in this document is subject to change without
notice and does not represent a commitment on the part of IncrediCube.
Trademarks
IncrediCube is a trademark of IncrediCube. All other company and product names are
trademarks of their respective owners.

3. Table of Contents
Executive Summary ................................................................................................... 4
Introduction............................................................................................................. 5
The market push factors ......................................................................................... 5
The market main failure points ................................................................................ 5
The Enterprise 2.0 Market.......................................................................................... 6
Market Overview................................................................................................... 6
Existing approaches and their shortcomings .............................................................. 7
The 'Enterprise Social Network software' approach ................................................. 7
The Wiki approach ............................................................................................. 8
The Innovative Approach ............................................ Error! Bookmark not defined.
Summary................................................................................................................. 9
About IncrediCube .................................................................................................. 10

4. Executive Summary
Although still at its very early stages, the infiltration of the new internet technologies
(Web 2.0) into the business world is a fact. In the past two years the demand for web-
based business solutions has been on the rise, and is expected to increase.
Under the relatively new area dubbed 'Enterprise 2.0', the new internet technologies
(Web 2.0), and especially the concepts surrounding social networking and user-
generated content, are breathing new life into the lucrative Enterprise Content
Management (ECM) market. This process is currently fueled by large organizations. With
hundreds of millions of potential customers using Web 2.0 services and applications on a
daily basis, these organizations are desperately seeking new ideas that may allow them
to “monetize” on these developments. Huge and large firms that were once satisfied
with custom-made legacy or 'homegrown' systems are now acutely aware of the risk
that they might miss out on opportunities created by the Web 2.0 explosion if they don’t
act now. Their actions are leading to an influx of revenue into commercial software that
is more adept at leveraging Web 2.0 capabilities.
As of today, however, there is a stark disparity between the growing desire of these
organizations to integrate new web technologies to enhance their business processes
and cut in IM expenses, and the ability of vendors to supply integrated solutions that
meet their needs and expectations.
The following short paper will examine this growing market and the main shortcomings
that currently prevent it from achieving its full potential.

5. Introduction
Although still at its very early stages, the infiltration of the new internet technologies
(Web 2.0) into the business world is a fact. In the past two years the demand for web-
based business solutions has been on the rise, and is expected to increase.
Under the relatively new area dubbed 'Enterprise 2.0', the new internet technologies
(Web 2.0), and especially the concepts surrounding social networking and user-
generated content, are breathing new life into the lucrative Enterprise Content
Management (ECM) market. This process is currently fueled by large organizations. With
hundreds of millions of potential customers using Web 2.0 services and applications on a
daily basis, these organizations are desperately seeking new ideas that may allow them
to “monetize” on these developments. Huge and large firms that were once satisfied
with custom-made legacy or 'homegrown' systems are now acutely aware of the risk
that they might miss out on opportunities created by the Web 2.0 explosion if they don’t
act now. Their actions are leading to an influx of revenue into commercial software that
is more adept at leveraging Web 2.0 capabilities.
As of today, however, there is a stark disparity between the growing desire of these
organizations to integrate new web technologies to enhance their business processes
and cut in IM expenses, and the ability of vendors to supply integrated solutions that
meet their needs and expectations.
The market push factors
The growing interest of the business sector in the new internet technologies is the result
of a culmination of several ongoing processes:
 The change in the nature of the work environment – a growing number of people
work outside the traditional office environment. For these home-based workers
and telecommuters the PC, laptop, Smartphone and web services are the main
tools of their trade.
 The gradual shift to web-based work environments – cloud computing is the
future (perhaps the most pertinent indicator of this is the fact that Microsoft's
Office 2010 suite will also become available as a cloud-based service).
 A generation shift – the paper/desktop generation out, the web generation in.
 A growing focus on improving business performance by encouraging collaboration.
 The desire of organizations to capitalize on their existing web presence by using
new Web 2.0 concepts such as social networking, microblogging, RSS, mashups,
etc.
The market main failure points
Currently, there is a stark disparity between the growing desire of organizations to
integrate new web technologies to enhance their business processes and cut in IM
expenses, and the ability of vendors to supply integrated solutions that meet their needs
and expectations. Most web-based business solutions offered today are simply
enterprise level versions of existing Web 2.0 applications, such as web-page builders
(WCM), social networking, wikis, microblogs, RSS, chat-rooms, mash-ups, etc. Fearing to

6. be left behind, many large organizations opt to try these often untested solutions, thus
driving the current demand. However, it is increasingly becoming apparent that such
solutions are difficult to align with existing business practices and organizational culture.
This reality suggests that the current Enterprise 2.0 offerings fail to provide viable
solutions to the market needs. This supposition is supported by the fact that in a
market that is potentially worth many billions of dollars, the market leaders only
manage to turn 20-40 million USD each in gross revenues at the most.
The Enterprise 2.0 Market
Enterprise 2.0 is a real market with real customers and real issues that warrant
innovative technological solutions. Enterprise 2.0 may be defined as the use of cloud
computing technologies and Web 2.0 concepts for use in two organizational fronts:
 The Internal – the use of cloud computing and Web 2.0 concepts to provide
savings on infrastructure costs, offer new web-based business process solutions,
and improve internal communication.
 The External – the use of Web 2.0 tools and applications to extend reach into the
huge pool of potential customers now using Web 2.0 services, such as social
networks, user-generated content sites, and media streaming sites.
Market Overview
As Enterprise 2.0 offerings strive to target two major organizational concerns –
improving internal communication and reaching new markets - many large organizations
perceive the adoption of such offerings as part of their long-term strategic corporate
strategy. According to Forrester Research the spending on enterprise Web 2.0
technologies is going to increase dramatically over the next five years, reaching a global
enterprise market of $4.6 billion USD by the year 2013. The top spending categories are:
Internal social networking tools, Blogs and wikis, and Mashups. Forrester predicts that
by 2013 spending in the external domain will surpass those in the internal domain by a
billion USD.1
In an attempt to size up this growing trend, many Global 2000’s and very large
organizations have invested in access of 700 million USD in 2008 in Enterprise Web 2.0
solutions.2 However, studies show that the current mode in which Web 2.0 technologies
are implemented in organizational settings does not enable organizations to reap the
full benefit from such. Such studies reveal that, as of today, there is a stark disparity
between the willingness of organizations to invest in enterprise Web 2.0 technologies,
1
See: Sarah Perez, "Enterprise 2.0 To Become a $4.6 Billion Industry By 2013",
http://www.readwriteweb.com/archives/enterprise_20_to_become_a_46_billion_industry.php; see also: McKinsey
and Company, "How businesses are using Web 2.0: A McKinsey Global Survey",
http://www.mckinseyquarterly.com/information_technology/management/how_businesses_are_using_web_20_a_
mckinsey_global_survey_1913
2
Perez, "Enterprise 2.0 To Become a $4.6 Billion Industry By 2013".

7. and the ability of the existing vendors to supply solutions that provide real proven
value. 3
Existing approaches and their shortcomings
The current solutions in the Enterprise 2.0 market may be categorized under two main
different approaches:
The 'Enterprise Social Network software' approach
Currently the Enterprise 2.0 market is dominated by vendors offering 'Enterprise Social
Network software'. These solutions (e.g. SocialText, Jive Software, MindTouch, etc.)
regard the future work environment as a social network made up of employees.
Following the latest trends in Web 2.0 user experience, the basic model followed by
these platforms is Facebook and Twitter. Their basic reference point is the organization
as a social unit.
According to this approach the new internet technologies should be harnessed to
transform the workplace into a vast egalitarian network of knowledge workers who may
freely communicate with each other, regardless of hierarchies and/or departmental
boundaries, in any way possible. Although it is unclear what might be the value of such
an approach, they nonetheless compete amongst themselves on who will succeed in
implementing more web-based communication applications into the limited space of a
computer screen.
Shortcomings of the internal social networking approach
The social networking in the workplace approach has several major shortcomings that
are the main cause for the current market failure:
 Limited target market - since networking is their main concern, they mostly
target large companies that have enough employees to make the establishment
of an internal social network worthwhile. They offer no value whatsoever to tiny
and small businesses which comprise the majority of businesses in all western
economies.
 Limited internal focus - they provide a solution almost solely targeting the
internal aspects of the work environment, while offering only limited solutions to
the external ones. In doing so, a major strong point of Web 2.0 concepts for the
benefit of business processes is lost.
 Questionable value - The value of introducing Social Media into the internal
organizational front is highly controversial, and there are no credible surveys
that prove the viability and real value of such an approach. Dennis Howlett of
ZDNet, for instance, put it this way:
3 See, for example: Jakob Nielsen, "Social Networking on Intranets", http://www.useit.com/alertbox/social-
intranet-features.html; Gartner, "Magic Quadrant for Social Software in the Workplace", revised edition 24
November 2009, pp. 1-2 (for an online full text version, see: http://www.gartner.com/technology/media-
products/reprints/microsoft/vol10/article4/article4.html; See also: T.D. Wilson, "The nonsense of 'knowledge
management'", http://informationr.net/ir/8-1/paper144.html; Susan Scrupski, "State of the Enterprise Market: Slow
and Unsteady", http://www.readwriteweb.com/enterprise/2009/04/state-of-enterprise-market.php

8. "Like it or not, large enterprises - the big name brands - have to work in
structures and hierarchies that most E2.0 mavens ridicule but can’t come
up with alternatives that make any sort of corporate sense. Therein lies the
Big Lie. Enterprise 2.0 pre-supposes that you can upend hierarchies for the
benefit of all. Yet none of that thinking has a credible use case you can
generalize back to business types - except: knowledge based businesses
such as legal, accounting, architects etc. Even then - where are the use
cases? I’d like to know."4
The main point of criticism against the implementation of social media in the workplace
is that social networks, microblogging, chat rooms, rss feeds, mashups, social games,
and other recreational Web 2.0 concepts are oxymoronic to a normal, effective work
environment. They are segments of the current Web 2.0 experience which is wholly
recreational, externally oriented, and is geared toward breaking hierarchies, dispersing
effort, time and interests and diffusing concentration.
The Wiki approach
These solutions (PBworks, Huddle, Telligent, etc.) contend that the main focal point in
any work environment, currently or in the future, will remain the individual worker. They
strive to harness cloud computing and Web 2.0 concepts to offer this worker new and
improved ways to conduct his/her work individually or in collaboration with others on
the web. Their model is Wiki software that allows an individual to author and publish
content and grant others permission to view and/or edit it as well. They compete with
each other mainly on making the rather cumbersome and tech intensive basic Wiki
software into a more easy to use and intuitive software.
Shortcomings of the Wiki approach
Unlike the Social media oriented solutions, the wiki oriented ones target all types of
organizations from self-operated home businesses to huge cooperations. However, they
also have several major shortcomings:
 Thin technological basis - their main weakness is that the basic wiki concept on
which they lean is very thin and fails to take full advantage of newer more
advanced web-based content management abilities. For that reason they mostly
target people with very simple and basic needs.
 Limited internal focus - even more than the social media solutions, they provide
a solution almost solely to the internal aspects of the work environment, while
offering highly limited solutions to the external ones.
Cloud-based business process applications
A limited number of vendors such as 37Signals, CentralDesktop, and Sosius offer creative
and useful web-based solutions to real problems. Nonetheless, with the exception of a
few players such as HubSpot, the solutions offered in this category are mainly intended
to expedite internal work processes.
4
See: Dennis Howlett, "Enterprise 2.0: what a crock", http://www.zdnet.com/blog/howlett/enterprise-
20-what-a-crock/1228

9. Common shortcoming
All three approaches as described above also share an additional shortcoming – they all
use of linear hierarchies. In such linear hierarchies objects and pages on a website are
linearly interlinked to each other resulting in limited usability and obliging users to
navigate through multiple screens.
Summary
To sum up, the current Enterprise 2.0 market is occupied by either socially minded
solutions of questionable value, thin wiki-based solutions, or internally oriented
innovative solutions. All three types of solutions are focused mainly on the internal
aspects of the work environment. Almost all current vendors in this market disregard
almost completely the growing demand for innovative web-based solutions that will
succeed in combining sound internal individual and group work tools with Web 2.0
empowered external tools.
Currently, the Enterprise 2.0 market can be described as a classic situation where the tail
- recreational Web 2.0 applications and concepts - is wagging the dog – the enterprise.
In this respect the implementation of Web 2.0 and cloud computing concepts on the
enterprise level may be equated to the Chinese invention of gunpowder - initially used
to ignite fireworks for festivities and recreation, but later harnessed to advance tangible
political and strategic ends. Right now Enterprise 2.0 is all fireworks. However, the
potential to become a major strategic element in the way business is conducted exits
and is yet to be even remotely exploited.

10. About IncrediCube
IncrediCube Inc. is a startup developing IncrediCubeTM - a new type of information
workflow engine capable of powering, either manually or automatically, a wide array of
online applications from web browsers to Business Process Management tools.
IncrediCube powered web applications allow non-technical users to easily take
advantage of cloud-computing technologies and Web 2.0 concepts for both internal
(administrative) and external (dissemination) work processes.
IncrediCube introduces a new patent pending method for structuring and presenting
information on websites. Using a patent pending information architecture and UI
approach the Company offers three major advantages:
 Allowing a quicker, more efficient, and smoother execution of processes both in
the data access tier (business logic) and presentation tier.
 Allowing non-technical users to manage, share, and publish dozens of webpages
from a single-screen virtual workspace.
 Allowing the automatic generation of special Web 2.0 websites that are capable
of presenting multiple webpages within a one-screen UI.
 Providing a uniform look and feel to all IncrediCube powered applications.
The information workflow engine developed by the company can be used to power a
wide variety of Web 2.0 applications and websites (e.g. back office systems and CMSs,
digital libraries, online learning and tutorial systems, project management systems,
business intelligence systems, and many more).
The company is currently in the development phases of a set of specialized online
IncrediCube powered applications:
• IncrediSquare – a simple to use personal or collaborative authoring environment
for facilitating internal (back office) and external (web content publishing) work
processes (limited release Q4 2010).
• IncrediCubes – a new type of web application for creating, managing and
publishing various interactive Web 2.0 products such as interactive websites,
digital libraries, online tests and polls, online-stores, etc.
• IncrediFolder – a personal or collaborative online data and task management tool.
• IncrediGroups – an easy to use platform for creating and managing internal
workgroups to expedite collaborative work processes and allow for a more
efficient project communication management.
• IncrediHood – an easy to use platform for creating and managing external social
networks to enhance user engagement and reach new audiences.
All IncrediCube powered web applications will be optimized to work on smartphones as
well as tablet PCs.
For more information visit our site:
http://www.incredicube.com