Is There A Future in Enterprise Micro-Blogging?

I have been a BIG fan of enterprise micro-blogging for the enterprise. Think Twitter for businesses. We use enterprise micro-blogging tool Yammer at Avaya and it’s been a great tool for collaboration and interaction, especially for an international company with a large virtual workforce. I use it everyday. It’s part of my work flow.

I expect micro-blogging within enterprises will be as common place as IM and email with in the next 5 years. Companies won’t be able to run their businesses with out them. (why? is a different post) Micro-Blogging for business is here to stay.

Despite my optimistic outlook for the platform. I think the space is in trouble. There are too many players; Yammer, SocialText, SocialCast, Rypple, Obayoo and more. Here is a list of the top ten. Beyond there being too many players, the barrier to entry is too low. It’s too easy for new players to enter the space. This is evident based on the large number of existing players so early in the game. There isn’t enough room in the space to support so many companies. The business models are too similar. There is little differentiation.

Adding to the pressure to survive, the pricing model has been pushed to zero by SocialCast who announced a freemium model for unlimited users with full administrative control. Add all these up and it’s hard to see how anymore than one, and maybe two of the players can make it. Even then, I’m having trouble seeing anyone make it due to the freemium model with out a substantial paying option.

If this isn’t enough to crush this budding industry, then the launch of Microsoft’s Sharepoint 2010 due out the end of this year and Google Wave due out next year will be. Sharepoint 2010 is expected to have a substantial number of Web 2.0 tools attached, including a micro-blogging tool. Although not traditionally considered an enterprise software company, Google Wave, in conjunction with Google Docs, and Google Voice are a compelling suite of tools for small to midsized business. The introduction of Sharepoint 2010 and Google Wave make it difficult for IT departments to justify supporting a one off platform for one purpose. There isn’t a significant enough value in the current micro-blogging tools to support their one off use, when you have the same feature already integrated with your existing collaboration, communication tools.

Not too long ago I traded emails with Fred Wilson of Union Square Ventures about how Twitter could make money in the enterprise. He emphatically stated this was not a direction Twitter was going. I see why. Microsoft owns the desktop, companies like Cisco, Avaya and IBM could quickly add it to their Unified Communications platforms, Google Wave is attractive to small business, the business model has been pushed to free, and it’s a crowded field.

There is no future for the pioneers of enterprise micro-blogging. A lucky one or two will be bought within the next 18 months. The rest . . . RIP.

The good news, micro-blogging is here to stay and for that I am very excited.