It’s with a heavy heart and a sense of bewilderment that we conclude that the market for enterprise-specific RSS readers appears to be dead. Two years ago there were three major players offering software that delivered information to the computers of business users via RSS. Today it looks to us like the demand simply never arose and that market is over.

A smattering of employees in big companies are using the free consumer app Google Reader, a paltry substitute for a business class RSS reader, and the rest of the business world is apparently satisfied to get information whenever they happen to stumble over it. It’s insane – a solid RSS strategy can be a huge competitive advantage in any field. We have no idea why so relatively few people see that.

We love RSS and this makes us really sad. If much of the rest of the world wants to ignore this technology, though, it’s their loss. It’s our bread and butter. Neglecting RSS at work seems to us like pure insanity.

Update: Some readers have said that “RSS” is too technical and won’t be adopted by people until we call it something else. As a person with no technical background, I don’t buy that. Here’s my comment in response to that discussion.

Update 2: Newsgator investor Brad Feld is one of the most respected VCs among data driven startups and says I’m totally wrong about the state of the company. I’m going to look into it more and will update this post if my thoughts on the topic change.

The Market Doesn’t Look Good

Newsgator, one of those three companies, announced today that it has closed another round of funding, unbelievably it’s the 6th time the company has required an infusion of cash. Years after Newsgator launched, it appears to us that the funding is a life-support line for a company that has largely left enterprise RSS behind and has been humbled into selling advertising widgets. After acquiring Mac and Windows RSS readers that are still the best products in their class, NetNewsWire and FeedDemon, and after launching the best mobile RSS reader on the market – Newsgator almost never talks about its RSS products anymore.

KnowNow, the second of the three companies that used to be discussed in this market, remade itself as an enterprise RSS vendor, talked up a big customer list and then quietly ceased to exist last year. Even that company’s website doesn’t exist anymore.

Attensa, the third of the three, offers a sophisticated “attention data” based option, but has been dealing with strange investor and executive issues for some time. We hear about a handful of people in the business world using Attensa’s powerful Outlook plug-in, but not very many. We hear about next to no one using the company’s feed server product. These vendors frequently say their customer lists can’t be disclosed, but we don’t hear people talking about using Attensa, either.

What Are People Using?

Almost everyone we talked to said they are using Google Reader to read their feeds for work. Using Google Reader at work is not a serious use of RSS. The program doesn’t support password protected feeds, something any company using RSS internally would require, and feeds with very few subscribers are checked for updates very infrequently. The mobile version of Google Reader is suitable for hobbyists, not enterprise users.

Update: Several readers have objected to this section and asked “what makes an RSS reader a business class product? To that I answered elsewhere and will repost here:

A solid enterprise RSS strategy is subscribing to key news sources in your field, your competitors’ blogs and search results, keyword searches, thought leaders and in the enterprise, internal company announcements, requests for assistance, financial, inventory or other information.

Features that make a reader business class = support for authenticated (pw protected) feeds, a good mobile version, local/offline caching, displaying diffs when items in feed have been changed, administrative control over dynamic OPML files, etc. being able to manage the subscriptions given to new members of a team.

Other users are reading feeds inside their email programs. Maybe that works well. We suspect that many people who combine email and RSS don’t know how to use either, but we are totally open to being convinced otherwise. It seems to us that in order to effectively manage feeds they should live outside of email, as the two mediums are very different.

What Does it Mean?

A market without enterprise use of business class RSS readers is like a flock of sitting ducks. Any company that steps up to make serious strategic use of such software should be at an immediate advantage in terms of early and efficient access to information.

These three vendors all served the US market primarily, the situation may be different in other parts of the world. If international competitors start to know more, faster, than your company and running circles around you – they may be using syndication technology that you’re not. Feeling comfortable in a competitive economy without being skilled in the use of pull-type information gathering strikes us as really decadent.

Forrester researcher Oliver Young came to a similar conclusion when he admitted that his prediction that 2008 would be a huge year for enterprise RSS was completely wrong.

But frankly I’m concerned there is something more fundamental going wrong here. At the end of the day enterprise RSS is predicated on the notion that shoving all communications through email is too inefficient and must be augmented with other communications channels. Is it possible that people simply don’t feel that pain strongly enough to invest the time and effort to learn to use RSS?

We are amazed that this software hasn’t caught on, but we presume it’s attributable to the radically new paradigm RSS represents, poor engineering on the part of the software makers, customer apathy and fear of acronyms (like R.S.S.).

We’re shaking our heads, but maybe there’s more and better enterprise RSS use going on than we see. What’s it like where you work?