Recession Tech

It seems pretty clear that the US economy is in the middle of a slowdown. Its depth, reach, and length are not yet obvious, and some folk still resist using ‘the R word,’ but leaner times are here, and might last a while.

During such times companies often throttle back their IT investments and hold off on big technology products. Some business leaders think this is the wrong thing to do —  during the last recession, in 2001, Jack Welch said that "this is the moment to widen the gap" between GE and its competitors. "We are driving the hell out of IT spending… It’s the lifeblood of the company." But the fact remains that technology budgets typically get pared when times get tight.

Which make Enterprise 2.0 technologies and deployments all the more attractive, for three reasons. First, the tools themselves are ridiculously cheap compared to other enterprise-level applications. Some, like WordPress and Mediawiki, are even free. And even the commercial E2.0 tools aren’t going to break the bank. Last week Awareness CEO John Bruce and co-founder David Carter came to my MBA class. The students looked at Bruce a bit quizzically when he revealed his company’s pricing: $4k/month, regardless of company size, # of users, etc. Bruce is not running a charity, of course, and his approach to increasing revenue with each customer is clever. Awareness charges an additional monthly fee for each neighborhood that a customer establishes. A customer will only go to the trouble of setting up a neighborhood if the Awareness platform is valuable to them, so Bruce can plausibly argue that he’s charging for value delivered. Even if a customer sets up a Manhattan’s worth of neighborhoods, though, the monthly tab from Awareness is not going to be painful. I once heard the total spending on Intellipedia and the US Intelligence Community’s other E2.0 tools described as ’rounding error’ in any single agency’s technology budget. The tools of emergent, as opposed to imposed, collaboration are just not very expensive to purchase and install.

They also don’t need to be configured up front. The second reason that Enterprise 2.0 looks good during lean times is that its component technologies don’t need to be populated with data and business logic then extensively tested before they go live. The whole point of emergence is to start with something close to a blank slate, then see what…  emerges. It makes sense, of course, to seed the platforms with initial content that will be compelling, draw in users, and encourage contribution, but this is entirely different than setting up CRM, ERP, SCM, and the other technologies that impose structure on collaborative activities. It takes a great deal of time and money to get these structuring technologies ready to go live. Here again, E2.0 looks like rounding error in comparison.

Third and finally, as business slows down workers often have more slack in their weeks. When this is the case it’s easier for them to find time and energy to participate in Enterprise 2.0. So lean economic times might be the right times to launch an effort to build an emergent social software platform. 

Leave a comment and tell us what you think, and what you’re seeing. Is this the right time to proceed with Enterprise 2.0?  Why or why not?