Should Midsize Software Vendors Sell Raw Web 2.0?

Web 2.0 is coming to the enterprise in a big way over the next several years. All the excitement has vendor strategists at midsize software firms eyeing the Web 2.0 market longingly. Unfortunately for them, few midsize software vendors will make money selling raw Web 2.0 functionality — i.e., functionality devoted to enabling Web 2.0 directly, such as RSS, wikis, and mashup platforms. Why? Because that will likely be the domain of collaboration platforms like those from IBM and Microsoft or a few small pure-play Web 2.0 vendors that survive the shakeout. Despite this setback, cagey vendor strategists will still make money with Web 2.0. How? By integrating Web 2.0 functionality to enhance existing apps, drive user and license growth, and ultimately create stickier products.