A recent report from Forrester Research predicts the Enterprise 2.0 market is about to see impending “price drops” on tools ranging from blogs to wikis to social networks. Forrester analysts cite three specific reasons for the price drops:

“Commoditization, bundling, and subsumption. Increased competition and slowing innovation means that there is less differentiation between blogging solutions. Further, many vendors, from Microsoft to Six Apart, now offer a complete, enterprise-oriented suites that bundle a mature set of essential tools, which drives down prices for individual tools and specialized solutions.”

The increasing ubiquity of SharePoint — which supports many Enterprise 2.0 features — also may help to drive down prices from many other vendors, Forrester predicts.

The only area that may see price increases is software for handling mashups, Forrester predicts. “IT departments will prioritize mashup technology as part of portal, business intelligence, and business process management software investments as well as a major component of SOA implementations.”

The Microsoft Search Server 2008 will be better suited for intranet searching with new federation capabilities and no preset document limits. It will be available in two versions including a free express version for a single server. Search will use mashups to include content form multiple sources in one result set. Currently, there is federation – search from other sources now. The next move will be to a combined mashuped set of results. Sharepoint will also allow for tagging and rating of content while maintaining the taxonomy.

The next release of Sharepoint, Microsoft will be investing for the paradigm shift to more web 2.0 capabilities. The consumer web is influencing the enterprise and search is getting bigger. Microsoft feels that software + services is the best of both worlds – combine SaaS and desktop apps. There are limits of Sharepoint online that can be handled by desktop apps. Social networking and social software are on the rise and success here is about building trust. Social networking is an important first step for collaboration and finding documents. Currently, knowledge is modern organizations isn’t just 80 undocumented, it is 95% invisible. The Sharepoint social networking capability, Knowledge Network, was not implemented in last version of Sharepoint but they are planning to implement it in next version.

Other new investments include making lists more relational and they will be the backbone of Sharepoint. Social networking will get more emphasis as mentioned above. Microsoft made a big investment in Facebook. The Sharepoint My Site profile will be seen as the hub of network. Knowledge Network integration is likely to happen as mentioned above. It indexes what’s on your system to determine your expertise (but you can turn it on and off). So the Knowledge Network will cover more than just what you put on your profile to My Site. It will look at how you are really working.

Finally she said they want to get beyond sequential collaboration. Influences from both the Groove acquisition and wikis will help them get past the limits of check in and out.

I asked about the announced commitment to integration with best of breed players who now offer some of the new directions she described for Sharepoint. Tara said Microsoft will continue its integration with best of breed players, especially in vertical market applications. Sharepoint is more of a platform and will not try to bring in all features into the product.

She closed with the announcement that Office 14 will be out soon and a new release of Sharepoint will come out at this time as well. Office 2007 separated language from function. It works so well they will be doing it from Sharepoint in next release. There is a Sharepoint blog to follow the latest moves.

Tim and Marcel said that the walls are collapsing between intranets and extranets and this change is reflected in applications. In addition, virtualization is now supported through many vendors. There is a move for Sharepoint to support non-Windows browsers such a Linux (this would shift one of Sadie’s points in part one). At the conference there was some mention of Sharepoint online – it does exist.

Search with Sharepoint is improving. It is important to remember that Web search and intranet search are different. It takes a while to get it set up with manual adjustments to the thesaurus, rank ordering, etc. You need to create a consistent taxonomy and single version of the truth. Also, ensure the taxonomy can be updated and create content types – (e.g. artists, album, track).

Sharepoint workflow is not ready for prime time as it requires a lot of expertise to get it right. I think this will be a critical feature. My experience has been with Sharepoint that if you have a very skilled developer that they can do almost anything but it becomes expensive in terms of implementation costs.

Companies are finding that the My Sites profile pages are starting to be used creatively. This is not surprising given all the practice many people have with sites like Facebook. They also cautioned to not replace the network drive with Sharepoint as these tools serve different functions. Be sure to do capacity planning and get sufficient hardware.

Do not assume front office administration staff can manage Sharepoint. It requires more IT skills than are usually found there. Devote the same time to training as you do to building Sharepoint. This is consistent with the Pam Conway’s session.

Sharepoint is an application that needs training. As Sadie mentioned in the first session, most obstacles are change management issues, new workflow, new policies, cultural change, and the shift to tighter collaboration. You need to show how current problems are solved by Sharepoint – users will feel excited if they feel their problems are being addressed. Your training plan should cover all the features of training above. It should be business role based training, not tool based training. Sharepoint provides an e-learning add-on. You can use it as a supplement to custom ILT. It is also necessary to provide documentation in the form of custom job aids, quick reference cards that are role based.

This is the first of four posts on the event. The session was led by Sadie Van Buren of KMA, who also writes the blog, A Matter of Degree. Here is a related post from her blog, Eleven ways to make your SharePoint implementation more user-friendly. The session, Dispatches from the Front Lines, drew on 19 Sharepoint implementations that Sadie has been involved with and on feedback from these clients. They are mainly small to mid size businesses.

First – what Sharepoint is: A Swiss Army knife – best of breed solutions are available but they have a more limited range. In addition, it is a development platform – not an out of the box application. It is also securable, provides personalization, is email-enabled, and integrated with MS Office

Second – Sharepoint is not (except with work arounds) relational, transactional, anonymous (everything tagged), or Blackberry friendly. It is also not a cross-browser platform – not Firefox and Safari friendly. There is no rating ability and no granular backed up at this point.

Sadie found the frequent starting points for clients were team collaboration and intranet management. Some clients use blogs, wikis and social bookmarking because they are baked in but these tools are not a starting point. Sharepoint is seen as more effective than other tools for team collaboration but less for wikis and blogs

The main challenges for Sharepoint success are cultural: the clean up of existing files is too steep; there is not a culture of sharing (people see their work outputs as their own and not the company’s); management wants change but will not hire for it; they underestimate the need for change management, there is no governance established, unplanned demands are placed on IT, the organization strategy is not aligned with the intranet. I have seen all of the above myself. There are some technology challenges with multiple versions of hardware and software but cultural challenges are biggest.

Some success factors include: the need to obtain executive buy-in and sponsorship, the need to develop useful applications, the need to not call systems by the tool name, as well as the need to create community and provide training and support. All of these are often underestimated or overlooked.

Microsoft announced at the Enterprise 2.0 conference its integration capabilities with a number of best of breed applications by third parties such as Connectbeam and Worklight. Sadie said that in her experience clients are not asking for this best in breed integration. They do not seem ready for it. But remember these are mostly small to midsize businesses. I think the large enterprises will be the more likely drivers of this integration.

The net of this is that the FAST team moves intact into a much-expanded Microsoft Enterprise Search Group (MESG, for those collecting new acronyms). We are particularly excited about the charter for this new group, which is to invest to be the industry leader developing the most innovative technologies for the widest range of customers and greatly expanding what has traditionally been viewed as the “search space.”

This direction is one that long-time analysts of the search space (myself included) have pointed to as the most likely development as search becomes more and more central to all of our online activities. We are still just at the beginning of the changes we see coming, which we see accelerating on the foundation of three core elements of the Microsoft search vision:

Search will be everywhere.
Search will enable unique user experiences.
Search will change the way people do business.

I wanted to share with FASTforward Blog readers what Kirk Koenigsbauer, Microsoft Sharepoint General Manager and the business executive behind the acquisition had to say today on Microsoft’s Enterprise Search blog. Kirk’s post:

FAST Tender Offer Complete!

Well, it has been a while since I last posted – but for good reason. Aside from our usual day-to-day efforts to deliver great enterprise search solutions for our customers, we’ve also been feverishly working on the acquisition of FAST Search & Transfer that we originally announced on January 8. Today, I’m excited to share that the tender offer is complete!

As I mentioned in January, FAST has an incredibly talented team of folks who bring great customer focus and tremendous expertise in the category – more than 60% of their people are engineers and close to 50 of them have PhDs in relevant fields. One of their true visionaries, John Markus Lervik, who has been FAST CEO, will transition to become Microsoft’s Corporate Vice President of Enterprise Search. John’s leadership will have an immediate impact on the development across our comprehensive portfolio of enterprise search offerings – including Microsoft Search Server 2008 Express , search for Microsoft Office SharePoint Server 2007 and FAST ESP – and will result in the future delivery of a single enterprise search platform. I’m thrilled to welcome our new team members on board and am eager for them to get started!

By bringing together our two companies, customers will no longer have to compromise when evaluating the enterprise search solution that’s best for them. We can now meet all their needs no matter how basic or complex: Search Server Express available as a free download; SharePoint offers search integrated with other business productivity tools; and for those with highly sophisticated needs, FAST ESP provides best-in-class capabilities for the most demanding search applications in both internal and customer-facing scenarios. And, you can be assured that with our expanded team in place, we’ll be in an even better position to continue innovation across all three products, including FAST ESP on Linux and UNIX.

Speaking of Linux and UNIX, some people may be (mis)interpreting our continued support and investment in these platforms as a broader change for Microsoft – so here’s some color. We’re making a pragmatic decision to continue to delight a core part of FAST’s customer base that has chosen the Linux/UNIX OS. You can bet that we’ll innovate on Windows, too, and over time we hope customers will see .NET as a preferred platform choice.

Net, our approach doesn’t imply any kind of broader change for our company in its strategy (so conspiracy theorists can stand down ) and you shouldn’t expect to see SharePoint running on UNIX. We’re making a business decision for enterprise search and feel great about what it means for our FAST search customers.

Getting to this point has been quite a journey, but the most exciting part about it for me is that we are only just getting started. Whether it’s ensuring customers continue to get great service from the people and support teams they know or building on the span of our product portfolio, I’m confident that the combination of Microsoft and FAST will serve customers’ needs more broadly and help make enterprise search become a truly ubiquitous tool that is central to how workers find and use information.

I look forward to sharing more with you as the journey continues.

Kirk Koenigsbauer
General Manager,
SharePoint Business Group

To facilitate timeliness I’m covering this in 2 parts: Part 1 is a general recap of the meeting; Part 2 covers the industry response.

From a financial perspective the Microsoft offer put a 42% premium on FAST’s stock price, but is equal to the fully diluted equity value of the company. The offer needs 90% stockholder approval, but already has board approval and support from key stockholders. As with most deals such as this, trading of the stock was suspended during negotiation. As trade resumed, Microsoft displayed their confidence by buying 10.1% of FAST’s stock base.

In a letter to customers, FAST expressed their excitement and commitment to the offer: “The acquisition not only validates FAST’s vision and long-held leadership in the search marketplace, but it also opens a new chapter in the ongoing evolution of search. We are now moving toward enabling customers to fuse cutting-edge search technologies with leading business productivity capabilities”

The Microsoft Strategy
The primary focus of the acquisition is toward bolstering SharePoint’s search capability. While the FAST team will be aligned to SharePoint development, the company will exist as a wholly-owned subsidiary. FAST will continue to service its existing markets, including sales to LINIX shops.

If you’d been paying attention (apparently I wasn’t), you’d have noted that Microsoft and FAST had already been working to bring the two technologies together. Back in July 2007 Microsoft released federated search connectors to FAST ESP.

When SharePoint is competing for corporate sales, a primary decision disqualifyer is search. The addition of the enterprise-class performance of FAST ESP gives Microsoft greater leverage in major deals for which search is an important criterion. Many are saying this fills a big hole in the SharePoint offering. This acquisition will also decrease the complexity of dealing with two different companies to obtain key enterprise workplace functions.

Technology aside, this deal will immediately increase Microsoft’s European presence. Microsoft will acquire a major research footprint in Europe and takes an increased posture as a pro-European company.

The Future
This deal reinforces FAST’s ongoing commitment to innovate the enterprise workspace. While search is part of Enterprise 2.0 it is not all of it. This deal is a critical step to put the user in control and positions Microsoft to better compete in a user-reactive market. This radically changes the search marketplace and puts the working-class in a better position to participate in the benefits of 2.0. It definitely increases the potential to ‘shorten the distance’ between the individual and critical information.

There is a lot to be decided over the next several weeks and months — no roadmap for product development has been decided. With FASTforward ’08 just a few weeks away, the conference will swell with conversations around the latest news, as it progresses (and an increased Microsoft presence will be evident). Zia reiterated a commitment to the unique experience I was appreciative of last year: the FASTforward event in Orlando will be the place to engage in deep discussions between Customer/Partner/ISV/analyst. It will be THE event to participate in truly industry-significant discourse around the future of the enterprise workspace.

Come be a part of it (or you’ll have to just read about it).