Buy Web 2.0 while the price is right, firms told

Firms should be ready to take advantage of falling prices for enterprise Web 2.0 applications as the market becomes increasingly crowded.

A report from analyst Forrester says the enterprise Web 2.0 market is "experiencing an explosion of activity among enterprises seeking collaboration and productivity improvements".

Forrester analyst Oliver Young, however, says prices are expected to fall for the services and apps offered by Web 2.0 suppliers.

He said, "Whilst the explosion is placing Web 2.0 technology in the hands of millions of knowledge workers, cut-throat competition, commoditisation, bundling, and subsumption are all offsetting the associated licence revenue growth."

Forrester expects that most Web 2.0 tools will experience falling average deal sizes over the next five years, with some deal sizes dropping by more than half.

Young warned suppliers, "Product managers must take steps today to manage increasingly competitive times ahead."