Forrester Research, Inc. has released a new report, entitled “What Web Sites Cost,” that finds the cost of Web development rising sharply. Citing the costs associated with new technologies like Java, Shockwave, and RealAudio, Forrester indicates that corporate Web site budgets will rise between 52 percent and 231 percent in the next two years. The study claims corporate Web budgets today range from US$304,000 (for relatively content-free promotional sites) to US$3.4 million (for content-rich sites that support transactions). Those budgets will grow to between US$681,000 and US$4.2 million respectively by the end of 1997.
By far the largest single expense—up to US$1 million per year—is associated with acquiring rights for content that was developed externally.
A graphical representation of the Forrester Research data is shown below.
Chart of Forrester Research data: “What Web Sites Cost.”
While the report has already been harshly criticized by many within the Internet community, Forrester senior analyst and author of the report, Josh Bernoff, interviewed more than 50 corporate Web project managers who launched their sites in 1995 and attracted several thousand visitors each month. The study avoided directories, small “brochure” sites, and corporate megasites:
Promotional site first year expenses:
US$304,000 (1995) - US$681,000 (1997)
Launch = US$98,000 (32%); Operation = US$206,000 (68%)
Content site first year expenses:
US$1.3 million (1995) - US$1.8 million (1997)
Launch = US$419,000 (32%); Operation = US$893,000 (68%)
Transaction site first year expenses:
US$3.4 million (1995) - US$4.2 million (1997)
Launch = US$593,000 (18%); Operation = US$2.8 million (82%)
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