In a recent post, entitled The 100% guaranteed easiest way to do Enterprise 2.0? Euan Semple asserts:
“…which can be as simple as sticking in some low cost or free tools…”
I have problems with this post generally because regardless of what Euan says, a formula expressed in 148 words is not credible. OK – so Euan enjoyed success at the BBC and he has a compelling story. That does not mean that success will ever be replicated. Don’t get me wrong. I admire Euan’s no nonsense approach to social computing and how management should adopt as light a touch as possible. But for many organisations, the idea that something can be done for nothing is not credible.
Take Ning. Jerry Bowles is gushing about this to the point that if I didn’t know better I’d swear he was looking for a PR gig. Jerry describes Ning as a ‘game changer’ and then talks about pricing:
It’s infinitely customizable and the Ning “premium†offer is: $9.95 per every additional 5GB of storage, 100GB of bandwidth. For another $19.95 a month you can run your own ads. $4.95 a month to use your own domain name. $7.95 to take away the Ning label.
Assuming you need 50GB storage for video and podcast material – not unreasonable for a community of say 100 people then your cost will be about $1,585 pa. Not an unreasonable figure.
But if Om Malik is to be believed, then:
This social software thing – it is too marginal, doesn’t make money and can’t make you cool.
If that’s true then those of us who believe there is a future and place for social computing technologies might as well pack up and go home. Now.
I have no idea whether Ning will be successful. What I do know is that it will need an awful lot of paying customers to recoup the $9 million Mike Arrington asserts was put into the company. 5,700 at the figure i’ve posited. Much higher if bandwidth is consumed at lower rates and even more if certain features, like the Ning button, are left in situ.
It is the economics that worries me. Ning pricing’s may be great for the consumer market but that doesn’t mean it works for the business market. Sounds crazy from someone like me who is sooooo buy side invested. But vendor viability is high on their tick list of requirements. Most services I look at are in fledgling stage so even assuming fitness for purpose, they have to be seen to be making money.
I’d argue that even the mighty Google may not be a great choice. Apart from its flaky spreadsheet, Google has no real business model to support its burgeoning stable of business applications other than Adsense/Adwords and I don’t see that flying in a business context. $50 a year may seem incredibly reasonable when compared with Microsoft Office but how many paying business customers will it need to make that viable without the applications being polluted with adverts?
I hope I’m not being too pessimistic but with all the hype around X2.0 and especially around the emerging $5/month pricing benchmark, I have to wonder which will be the right horses to back for services aimed at the business user.
