Spending on Web-based enterprise technologies, including social networking, RSS (really simple syndication), blogs, wikis, mashups, podcasting and widgets, will grow by 43 percent each year within the next five years, Forrester reports, pointing to Web 2.0 technologies representing a fundamentally new way to connect with customers and prospects while harnessing the collaborative power of employees.

An Enormous Effect

There are challenges moving forward, as companies adopt this technology, Young commented. One is the companies' own IT personnel being apprehensive about technology that they may feel is less secure.

"If we think about who implements technology with these enterprises, it's almost always IT, and IT guys can be very persnickety about what they consider safe and secure," he noted. "Making sure IT has brought in its own tools becomes a big part of it."

In addition, technology providers will be under price pressure, thanks to Web 2.0 tools that often are free to consumers. "The ability to get free, open source technology is going to have a big downward price pressure," Young added.

Another challenge is that enterprises will want to maintain control. "They want complete control and be able integrate some of it, while being able to decide which technology they want or don't want to use," he said.

By 2013, investment in customer-facing Web 2.0 technology will dwarf spending on internal collaboration software by nearly $1 billion.

"Social computing and Web 2.0 marketing are still in their infancy; and in general, the market is still in an experimentation phase," Young said. "In the long run, the effect of Web 2.0 will be enormous."