Web 2.0 spending predicted to fall

13:00 13th October 2008

Spending on Enterprise 2.0 messaging and collaboration technologies is set to fall, amid increasing competition and a weak economy, according to Forrester Research.

The research company believes that consumers could soon witness much lower prices for common web-based applications, as the number of enterprise web service companies grows and their products become more similar.

Oliver Young, Forrester Research analyst, has predicted that the average contract sizes for most Web 2.0 tools will fall over the next five years, with some deal sizes predicted to drop by more than half.

Mr Young specifically forecasts that the markets for traditional Web 2.0 products such as podcasting, RSS, blogs, Wiki and social networking services will fall, while only Mashups are expected to increase.

He said: "Overall, Forrester expects that the price premiums that vendors have been able to command will disappear.

Last week, Gartner technology suggested that the private sector will need to engage with social media to attract customers in the future."