A number of large and small companies are making big bets on social business through acquisitions like Microsft’s purchase of Yammer and IBM’s extensive acquisition strategy (see IBM's Mike Rhodin on the Convergence of Social Business, Analytics and Commerce). Many firms are also investing in product enhancements and product integrations. Predictions by IDC support the moves as it expects compound annual growth to exceed 40 percent between 2011 and 2016.
Michael Fauscette, lead author of two IDC reports, is quoted, "We're seeing good strong growth from the major players in this market and that'll continue for quite a while." Customers spent $767.4 million on the products globally in 2011, and will spend almost $4.5 billion in 2016, according to IDC's "Worldwide Enterprise Social Software 2012-2016 Forecast." Because of their potential for sharpening employee communication they're becoming important tools for "decision support" and productivity across most industry verticals, according to Fauscette.
However, there are factors that will work to slow down the momentum. These include: concerns about return-on-investment, security, regulatory compliance and intellectual property protection, as well as the involvement needed from IT departments to deploy and integrate the software. The latter one is a key concern in my opinion.
For social software to really work and provide value, the integration with enterprise apps is critical. Some firms are building in this integration into their products (see ). Others, such as AppFusions, are building connectors to enable these necessary integrations without heavy lifting from IT.
IDC also ranked the top vendors from a revenue perspective in a different study, "Worldwide Enterprise Social Software 2011 Vendor Shares." Tops by far was IBM with $105.4 million, followed by Jive Software ($65.3 million), Communispace ($60 million), Telligent ($42.7 million), and Socialtext ($34.5 million). Rounding out the top 10 were Mzinga, Lithium, Yammer, NewsGator, and VMware. I guess Microsoft was feeling left out so they picked up Yammer. It is also smart of IDC to not count SharePoint as social software.
It will be interesting to see where this market goes but I predict that integration will be a major theme over the coming years.
Comments