By 2014, social networking services will replace e-mail as the primary vehicle for interpersonal communications for 20 percent of business users.

Greater availability of social networking services both inside and outside the firewall, coupled with changing demographics and work styles will lead 20 percent of users to make a social network the hub of their business communications.

Not sure: it will depends of the specific business context of every organization. Sure, teens are using more heavily texts and messaging functions in social networks over email, but keep in mind they’re not inside an organization yet. The business realities can make emails really attractive as a tool: offline use and accessibility in low-connectivity areas are examples of email strengths in some industries. So, 20 percent is too high for employees of large organizations.

During the next several years, most companies will be building out internal social networks and/or allowing business use of personal social network accounts.

To allow, officially and formally, business use of personal social networks accounts is still a long shot, as it will depend on the platforms themselves investing into compliance capabilities. Unlikely in my opinion.

Social networking will prove to be more effective than e-mail for certain business activities such as status updates and expertise location.

“The rigid distinction between e-mail and social networks will erode. E-mail will take on many social attributes, such as contact brokering while social networks will develop richer e-mail capabilities,” said Matt Cain, research vice president at Gartner. “While e-mail is already almost fully penetrated in the corporate space, we expect to see steep growth rates for sales of premises– and cloud-based social networking services. “

No news here.

Gartner recommends that organizations develop a long-term strategy for provisioning and consuming a rich set of collaboration and social software services, and develop policies governing the use of consumer services for business purposes. Companies should also solicit input from the business community on what collaboration tools would be most helpful.

How is this not obvious? ;)

By 2012, over 50 percent of enterprises will use activity streams that include microblogging, but stand-alone enterprise microblogging will have less than 5 percent penetration.

The huge popularity of the consumer-microblogging service Twitter, has led many organizations to look for an “enterprise Twitter,” that provides microblogging functionality with more control and security features to support internal use between employees. Enterprise users want to use microblogging for many of the same reasons that consumers do to share quick insights, to keep up with what colleagues are doing, to get quick answers to questions and so on.

“However, it will be very difficult for microblogging as a stand-alone function to achieve widespread adoption within the enterprise. Twitter’s scale is one of the reasons for its popularity,” said Jeffrey Mann, research vice president for Gartner. “When limited to a single enterprise, that same scale is unachievable, reducing the number of users who will find it valuable. Mainstream enterprises are unlikely to adopt standalone, single-purpose microblogging products.

Seriously disappointed by Gartner here, although there is no question activity streams will be used by even more than 50 percent of enterprises (more like 80% for me).

First, while having a hub that aggregates activities across all applications, social or not, will be a must, actually integrating all capabilities into one tool may not be the best way for the majority of organizations to increase the signal to noise ratio for their knowledge workers. In other words, keeping micromessaging (much better name than “microblogging”, which is misleading) as a separate application, with its UI, clients, etc. may be the most effective deployment at the user level – though not being sexy for analysts or some IT folks, but who really cares if they are not happy?

Second, Gartner seems to be making the same mistake as most top execs when considering an application like microblogging: though its deployment will surely be global, with one infrastructure open to all employees (like email), its use and value will be extremely localized and formalized in business workflows.

Think of micromessaging as, purely, a communication infrastructure that:

• is real-time while being useful when accessed asynchronously
• can be tapped through web access, desktop client, mobile client, SMS
• allows specific group uses with security features (must-have for all respecting “Twitter for the enterprise” applications)

You won’t get a big platform where everyone converse with everyone like the actual Twitter platform. You will get a platform where everyone can converse with colleagues and groups based on business realities. Some groups will be very big, producing a behavior similar to Twitter (for example groups based on communities of practice with several thousands members), but most will be small, with a life based on the duration of a project or task, and between all the players involved (from 3–4 to 20–30).

For corporate social networking platforms: deployment is global, but use and value are localized.



Through 2012, over 70 percent of IT-dominated social media initiatives will fail.

When it comes to collaboration, IT organizations are accustomed to providing a technology platform (such as, e-mail, IM, Web conferencing) rather than delivering a social solution that targets specific business value.

Through 2013, IT organizations will struggle with shifting from providing a platform to delivering a solution. This will result in over a 70 percent failure rate in IT-driven social media initiatives. Fifty percent of business-led social media initiatives will succeed, versus 20 percent of IT-driven initiatives.

Enterprises will need to develop entirely new skill sets around designing and delivering social media solutions. Until this happens, failure rates will remain high. A dearth of methods, technologies and tools will impede the design and delivery of social media solutions in the near term. But long term, enterprises will realize that social media is not a “hit or miss” activity naturally prone to high failure rates, and that a calculated approach to social media solution delivery must be an IT competency. At that point, post 2012, the social software market growth will accelerate as will the overall impact of social media on business and society.

Pretty much agree here. The skills needed in IT: internal management consulting based on strong knowledge of both the new workflows enabled by innovative technologies, and deep knowledge of the enterprise’s business context. Those internal consulting group should sit outside of both IT and the business, justify their value by measured improvement in business KPIs and have direct executive access and support. They could rely on external consultants to assist as needed, but manage every engagement.



Within five years, 70 percent of collaboration and communications applications designed on PCs will be modeled after user experience lessons from smartphone collaboration applications.

As we move toward three billion phones in the world serving the main purpose of providing communications and collaboration anytime anywhere, Gartner expects more end users to spend significant time experiencing the collaborative tools on these devices. For some of the world, these will be the first or the only applications they use. The experience with these tools for all who use them will enable the user to handle far more conversations within a given amount of time than their PCs simply because they are easier to use. Just as the iPhone impacted user interface design on the desktop, the lessons in the mobile phone collaboration space will dramatically affect PC applications, many of which are derivatives of decades-old platforms based on the PBX or other older collaboration paradigm.

“IT organizations should continue to procure leading-edge smartphones for testing and to accumulate knowledge on how the collaboration applications on such devices accomplish business tasks,” said Ken Dulaney, vice president and distinguished analyst at Gartner. “As more organizations consider replacing deskphones with cell phones, they may wish to anchor their collaboration tools also on the cell phone.”

Agree but weak: in 5 years, the hardware options available for mobile computing will be far better than what we call smartphone today. Real valid comparison here is versus consumer web/mobile applications, that’s what will provide (much needed) inspiration for the design of enterprise applications.



Through 2015, only 25 percent of enterprises will routinely utilize social network analysis to improve performance and productivity.



Social network analysis is a useful methodology for examining the interaction patterns and information flows that occur among the people and groups in an organization, as well as among business partners and customers. However, when surveys are used for data collection, users may be reluctant to provide accurate responses. When automated tools perform the analysis, users may resent knowing that software is analyzing their behavior. For these reasons, social network analysis will remain an untapped source of insight in most organizations.

Before undertaking a social network analysis, Gartner recommends that the organization ensure that it has the trust and buy-in of the people it hopes to include in the analysis in advance. Issues of privacy and confidentiality must be addressed and a determination needs to be made regarding how the information will be used and communicated. Establishing the ground rules upfront will encourage more open and honest participation and reduce the resistance to ongoing relationship monitoring.

Same old argument here: surveys will be lied to, and automatic collection of interactions need to be exhaustive across all channels to be useful (yes, even phone calls (and conf calls with that!) would need to be logged and analyzed, or you miss a good chunk of interactions). I’ve not yet seen a SNA application or solution that could work across 100% of even generic channels, not even speaking of in-house applications that could be the main interaction firehoses internally.

SNA is a good sell for analyst firms and consultants, because it is sexy and has a few good examples that are used as demonstrators, but in practice the tools are not there yet to collect the data needed (the analysis is easy).

Innovation is obvious in the Enterprise Social Computing field. Features are invented and combined in novel ways; ever changing suites of products are built and marketed. Innovation is very real, even if not of the scale signaled by the hype around it. It’s not in pricing however. Even worse: pricing is often structured contrary to the value offered and hinders both pilot and full deployments.

Look at the metrics, fences, and whole pricing strategies of your favorite vendors. Strategy may even be too strong of a word, as they often are a combination of classic scale metrics (per user per month), setup and deployment fees that are pure cost pricing, bland and rigid Volume-Discount price structure.

Vendors should exploit the principles of value pricing on a much wider and deeper scale than they currently attempt to. Value pricing is obviously nothing new, yet it seems strangely ignored by both vendors and their clients. Practiced in the emerging IT field, it will have deep impacts for both vendors and clients and will spur a much more productive collaboration between the two.

Value and cost are not matching

Every product bearing what is usually dubbed a “social component” has significant network effect and peer production dynamics. The more employees actively use the application, the more they — and so their organization — extract value out of its use. Marginal benefit per user, and hence total value, thus increases with the number of active users. Yet, most pricing structure are degressive, Volume-Discount schemes: price per user decreases with the number of users. Price and value varies in opposite ways:

What happens here is a total reversal of what should be aligned: the more employees use the system, the more value you get out of it per user, the less you pay. And the less users you have, the less value you get, the more you pay. This explains both the refusal of lots of companies to pilot new technologies, and the difficulty to transition from pilots to full deployment: if you can’t do it in one shot, the economics will be much less in your favor to do it in a phased way.

Aligning value and cost decreases risks for large clients

When companies are looking to pilot innovative technologies, they consider both the pilot itself and the full deployment — of which the pilot is just the first step — if it ever happens. But they also evaluate half-successes: what happens if they need to deploy only across half their planned user base? Companies will do a pilot, agreeing beforehand to a price structure that sees the price decrease as the number of users increases. ROI calculations will more often than not be based on optimistic expectations towards the adoption rate, overestimating the price discount. So what happens if you planned on deploying the piloted technology across 10,000 users and find out you have to start with 1,000 and demonstrate the value over time? Well, your price per user will likely shot up significantly.

This means that, with classic Volume-Discount pricing structures, companies will usually have the choice between a full deployment or no deployment. Deploying on a smaller scale would decrease the ROI significantly as it lowers the value and increases the costs. Unfortunately, what this means is that disruptive innovations, where the value is by definition not obvious for stakeholders, and where it usually emerges from early adopters experience, are very difficult to successfully transition from pilots to production. They would need a phased deployment, starting small and scaling up progressively, that is not profitable with a Volume-Discount price scale.

By pricing their software closer to the actual value delivered and perceived by their clients, vendors will get pilot deployments accepted much more easily, and most importantly will see more of them succeed.

Replace Volume-Discount pricing by Volume-Increasing pricing

Pricing is both a significant obstacle and opportunity for savvy vendors and clients. Developing a pricing strategy that better aligns value with price will help both to provide and benefit from innovative IT applications.

So how should vendors approach a newly defined pricing strategy? We’ll take the social media example: price it with activity metrics coupled with increasing, not degressive, scale metrics. In practice, you would charge a price per user that actually increases with the number of active users inside the client’s organization. Looks wrong? Adopt your client’s point of view: if your deployment is very successful, they will pay an expensive price but derive lots of value from it. Additionally, if the deployment needs to be phased to convince stakeholders of the value potential, they will also pay a matching price that will enable them to scale its use. Reversing the price structure lowers significantly the risk for the client, increasing the chances of a pilot happening.

A positive externality of such a pricing strategy, at its peak for Enterprise Social Computing offerings, is the credibility and confidence about their product projected by vendors. Nearly all are using arguments about how easy it is to engage employees, how they will want to use it, collaborate with each other, etc. So don’t limit yourself to the market pitch, embed this in your pricing and demonstrate your confidence.

Redefining pricing habits is not easy but the rewards can be great

Vendors can do this by working with their clients and defining targets for user activity or user adoption. This will be easier when your product is replacing a legacy application, and more difficult when it is truly innovative.

A good case study are the applications providing microblogging (or microsharing, in a word Twitter-like like Yammer (which just announced a on-premise version) or Present.ly) features for the enterprise. The more users will use it, the more value the client organization will get out of it. In most organizations however, the value of a Twitter-like for corporate use will not be obvious, and will slowly build up with time, as it spreads internally.

Yet, pricing is desperately of a Volume-Discount type, making an after-pilot deployment with a small group of early-adopters look very expensive per user (large companies will compare it to the price per user for fully deployed applications like email or IM). Smart vendors will reverse the price structure, offer organizations the opportunity to try out the new technology, experience its value over time after a pilot, and scale up accordingly. They have to forgo immediate but short-term benefits, in order to get a chance to demonstrate their value added and reap the benefits as the client scales up its use.

Defining the correct strategy is not easy and will require time and efforts. Each side has of course opposite incentives for the definition of the ranges. Compounded with this, setting the target in terms of active users for a successful deployment in terms of user adoption will not be easy for truly innovative technologies. But there are many ways to implement a good pricing strategy. Defining ranges of user number will likely be difficult in many case: what should be a target of active users, for Twitter-like applications, to define a successful deployment? This can be mitigated by setting targets on user adoption rates. Stating that the user base should grow by at least 10% from quarter to quarter or 3% from month to month would align clients and vendors very well. Incorporating in the contract that, say, a successful deployment is 30% of all employees, would enable to define a reward fee to the vendor if deployment reaches 50% of active users. This will again match the value to the price and most companies shouldn’t have a problem with this.

The possibilities are truly infinite and have to be explored on a case by case basis, taking into account the complete characteristics of a product. Let me dismiss right away the most common counter argument for using Volume-Increasing price structures instead of Volume-Degressive: vendors will lose a lot of value to small companies that will never require to scale up. This is true, if no fences are in place. But it’s very easy to define at least 2 structures based on the total size of the organization. For organizations with less than 1,000 employees, you apply Volume-Discount pricing. For more, Volume-Increasing. That may not be right for your product, but the point here is that you need to segment your market, and then use this segmentation to apply different structures.

In any case, pricing a product based on the number of active users instead of seats, is the least a vendor can do, especially if the software is delivered as a service.

Deeply segmenting your total market then using innovative metrics and fences to match price and value as closely as possible is the single biggest opportunity available for both vendors and clients alike. Let’s use it.

You can also use the following slide deck to go further along this path:

How to price social enterprises applications? Value and utility pricing through increasing price structures

When Yammer won the TC50, we witnessed two sequential waves of reactions. The first was laudatory and praised a company that found how to monetize a service like Twitter, where it had hitherto failed. The second denounced its pernicious business model. I fit squarely in this last camp. Here’s why:

Yammer lets anyone with a company email address create a network open exclusively to the other persons with a valid email address on the same domain. Yammer advertises heavily this: anyone can open a secure and safe private network to benefit from twitter-like features inside your business. Oh, and it’s free, so why don’t you go ahead and benefit from all this greatness ? Well, in fact you do and Yammer has had a good growth (but not quite like the impressive expectations it had). But the twist gets you at this point and it hurts.

The twist here is in the business model. If your company wants to manage the network, then it has to pay. And the price is per user: the more users, the higher the price. So essentially, it is bait and wait: bait for the employees to create a network and use it, wait for corporate IT to come, want to manage it and spit out the cash.

But even when paying, what you can get in terms of control is very low. For the majority of large companies, what you want is not a system based on email address, but one based on your SSO system. Mainly for one reason: you want to control which ones of your alumni keep their access to the network, if any. Yammer doesn’t offer that, so you take a large risk by assuming you will manually do it. They also offer IP restrictions, but that doesn’t solve the problem either.

The only workaround offered is for employees to signal a former employee when they spot them. Trust me, it won’t work. As worrying is the content ownership issue which belongs to the user up until the point where the company is paying for it and claims the network. Even if covered by the T&Cs, I imagine the potential legal issues arising from a change of ownership without express consent of the users. What does this all mean?

The main consequence for me is a loss of confidence in the “web 2.0″ applications as a whole, as they are viewed by a lot of people. Let me explain. It’s already difficult to convince corporations to use innovative applications from small companies, especially delivered as a service. You combine the risk of dealing with small players that can go bust in the short term and the risk of trusting them on their SAAS implementation (yes, even with due diligence). We try to mitigate that by explaining reputation is a significant asset in this area as well, and companies not playing by the rules have more to lose than to win.

But with business models like Yammer emerging, then the loss of confidence is not just for them, but for all the other applications as well. So this is bad for insiders within companies trying to push for these applications, and bad for a whole bunch of other companies. Because it raises the difficulties to move them within the enterprise. Bernard Lunn is not saying something else in his review:

The reason Yammer was considered brilliant was that it had a “cunning revenue model”. Let me see if I’ve got this right. You use Yammer rather than Twitter to restrict the Followers to your colleagues. So you can discuss company secrets really securely. (That, by the way, was a joke!) You use your corporate email ID (Gmail, Yahoo etc not allowed). All that is free, so massive viral adoption. Then companies want to claim/control the conversation. So they pay for all users on Yammer with a corporate email ID. Yep that is cunning all right. Other words come to mind as well.

What the bottom line? Small companies can probably use them, but in their place I would use one of the numerous alternatives available and not trust a company like that. Big companies should avoid Yammer at all cost and go with regular alternatives (as innovative and SAAS). And that is probably the first and only application I would support the ban of on corporate networks.

UPDATED – 12/21/08 : Included full quote of Bernard Lunn’s article on RRW instead of just a link.

Normally, a relationship goes through the following stages: introduction, first chats, a relationship is developing, intimacy, trust, friendship. By using social tools, like twitter, you skip directly past intimacy, and have a shot at developing trust quickly. That’s because you already know the person in front of you, and if all is well, she likely knows you.

When you first meet someone, before developing a relationship, you have to go through the following phases: lowering each other’s defenses, get to know a bit on each other, informally agree to continue talking. That’s why it’s tough – but not impossible, and certainly quite easy with good practice – to develop a relationship with a stranger in less than 5 mins.

But if you know the person’s number of children, what she thinks when she’s traveling, when she’s thinking about deep issues, etc… Then you jump right to the relationship developing stage. Blogs allow that, twitter allows it on another level, more mundane, but at least as important regarding relationships.

Since there’s increasing evidence (see Eszter Hargittai‘s Webuse research project) that twitter isn’t taking off among teenagers or event students, if you belong to one of these two groups, think of twitter this way: it’s the wall on your Facebook profile, but a bit more complex, for adults say… JP Rangaswami puts very nicely in this short video interview.

Social media a la twitter, sharing micro-bits of stuff, can be viewed in 2 ways. Useless broken tools to exchange banalities without value. Or intimacy catalysts. The majority of large corporations will of course jump on the first. But the smart ones don’t need help linking intimacy and bottom-line.