Web 2.0 Hits a Corporate Bump

Modern business on some level is about software. Web 2.0 is powerful for business because it's supposed to make software easy â€" take a piece of software, mash it together with another piece of software, and voila! You're going viral, your business is booming, you're flushed with success.

Not so fast. I talked recently with some of the folks involved with McKinsey's Technology Initiative, who have just finished up their latest Web 2.0 survey. They find great interest in Web 2.0 technologies, but also some real disaffection with the technology. In fact, 22 percent of the 1,988 survey respondents say they're dissatisfied with Web 2.0 technology, more than the 21 percent who expressed satisfaction with it. Michael Chui, a McKinsey consultant, told me that "it's not quite as easy as you might think to make this stuff successful â€" it requires some real skilled management."

McKinsey found that the Web 2.0 technology breaks down into what I'll call the cool kids, the fringe crowd, and the outcasts. Blogs, RSS and wikis are cool kids -- usage is up. Same with podcasts. But social networking is part of the fringe crowd, as usage has flattened, and peer-to-peer seems to have become an outcast. Web services are still the most popular Web 2.0 technology, with 58 percent of companies using them. But that's down from 70 percent in 2007's survey.

Mashups, meanwhile, aren't seeing much use in companies. Only 10 percent of respondents said their company was using the technique.

But dissatisfaction with Web 2.0 does not mean its demise. It's notable that those with the greatest dissatisfaction over it primarily blame company leaders for not getting how important Web 2.0 technologies are. The next highest complaint is about corporate culture stifling Web 2.0 efforts.

That's to be expected. As Chui notes, Web 2.0 threatens fiefdoms -- "it allows people to collaborate and communicate across both functional silos within an organization as well as across organizational boundaries. It's also changing the way people think about what it means to be an effective employee within the organization."

Web 2.0 may have some more bumps ahead of it, but it's inexorable that it will navigate them. Web 2.0 reduces the friction of business, and ultimately that makes the physics of it too attractive for companies to shun for long.