Consolidating before the corporate market's cracked

Mar 20, 2007 17:15 · 389 words · 2 minute read

Robert Scoble is wondering whether there’s another consolidation due, this time in the Web 2.0 industry. It’s a persuasive argument - more and more startups with business models based on advertising, all chasing a static pool of advertising dollars. Eventually, something’s got to give.

This got me thinking about how many of the current breed of Web 2.0 startups are going to be able to make the transition into the corporate market. Certainly there’s a significant number where there are corporate applications for the services they’re providing - a project I’m working on the moment is looking at the software catalogue that’s available to end users, and there are a huge number of what are currently desktop-based commercial applications that could be replicated very easily with a pick-and-mix of online start-up providers.

The problem with this is the lag between Web 2.0 startup, and corporate adoption. Early adopting geeks such as myself are happy to jump into the early alpha versions with both feet, and live with the occasional glitchy consequences. But when you’re talking about rolling a tool out to thousands of users in tens of countries, that sort of thing takes time - and lots of it. There’s no guarantee that company X providing the perfect online solution is going to still be around by the end of a corporate adoption cycle, as the venture capital runs out well before the corporate revenue streams start to kick in.

And to add to this, there’s also the internal FUD factor of corporate IT functions - in the old days no-one got fired for buying IBM - these days, it seems no-one is fired for sticking with the Wintel status quo, even though there is nothing - nothing - that my organisation uses on the desktop that couldn’t be replaced with online or open-source equivalents, resulting in potentially megabucks of savings.

The same tired old TCO arguments get trotted out of course , but I do wonder if Microsoft haven’t handed themselves a poisoned chalice with the redesign of the new Office environment. After all, if you’re replacing a well-trodden and familiar interface with a new one - which means training - is there so much difference in re-training from MS to Google or Open Office or whatever, particularly when you take the cost of upgrade licenses into account.