Buyers are finding it increasingly difficult to distinguish one vendor's products from the products of other vendors in the social software market. According to Gartner's latest magic quadrant for social software, competition between vendors is no longer about product functionality, but about the vendors themselves.
Researched and developed by Nikos Drakos, Jeffrey Mann and Mike Gotta, this year’s Magic Quadrant for Workplace Social Software points to a market that is mature, well developed, and crammed with competing companies offering -- well offering much the same product when all the marketing literature is brushed aside.
Market Definition of Social Software
To be clear about what is being discussed here, Gartner defines social software for the workplaces as software that is used principally for enterprise collaboration by putting individuals, teams, communities and networks in contact with each other. The principal gains in using this software and which Gartner sees as key includes:
- Making professional contacts.
- Accessing contact lists of those that can offer advice, reference and referrals.
- Team formation and collaboration on tasks.
The current social and collaboration market is worth an estimated US$ 840 million but, unlike some other software sectors, is growing strongly. Gartner estimates that between now and 2016, the market will grow 13.4% annually and will be worth US$ 1.4 billion.
That said, the business objectives of social enterprise software remain the same. Those that are responsible for developing enterprise strategies around social software are still looking to:
- Enhance enterprise information sharing and increase productivity.
- Support teams across the enterprise by offering learning possibilities and insights into best business practice.
Functionality Alone, Is Not Enough to Compete
While there is still room for technological development within the market in areas like social analytics and gamification, Gartner argues that the market has developed so much that it is now extremely difficult for vendors to compete with each other on the basis of functionality alone.
Functions that were once exclusive to market leaders are now present in even the most limited products, offering features such as activity streams, profiles, embedded messages, and dynamic profiles.
Because of this, Gartner says it was obliged to look beyond core capabilities in order to provide any kind of meaningful distinction between products. It did this by breaking products up into three different categories.
1. Social software in horizontal platform
These are social capabilities that come out-of-the-box with other kinds of related capabilities like content management, unified communications, or enterprise portals. They are favored by IT buyers that are looking for products that work straight away with their information access and management systems.
2. Social software in another application
These are social capabilities that are already embedded in another applications and generally target specific user roles. Gartner says the attraction here is the pulling-together of collaboration activities inside applications that carry out other functions too.
3. Social software for end users
These are products that offer superior user experiences, frequent, or automatic updates, or cloud-based delivery, making it easy to access information from outside the firewall. They aim to appeal directly to end-users who then pressurize IT, or enterprise buyers, to legitimize the choices. Gartner says this category of products is the fastest growing category and will continue to grow rapidly as more enterprises take to SaaS.
However, the market is changing as vendors start to realize that merely providing the same set of functions under a different banner is not going to work anymore. Vendors, Gartner says, need to take into account:
- Specific business requirements, or the context in which collaboration is happening
- Provide for any changes in routines, or habits of individuals that actually using the products.
Finally, as a result of all this, Gartner says that the market will remain extremely volatile for the coming years and that potential buyers should look not at functionally, but should consider their needs as social-enabled businesses..
There are only 4 vendors that made it into the Leaders’ Quadrant this year, which given the number of vendors in the space is surprising. To make it into the Quadrant in the first place, vendors must be able to provide the following functions at least:
- User profiles
- Group spaces
- Content sharing
- Activity streams
From a quantitative perspective they must have:
- At least 60 employees worldwide and an organization dedicated to supporting the product
- Generated US$ 9 million in the past year
- Have recorded 10% growth in revenue year-on-year
- Have at least 15 organizations with at least 5000 users on its books
- A presence in 3 geographic regions
This year in alphabetical order the Leaders are:
From the very beginning, IBM has been present in the social software with Connections, then with Sametime, IBM Notes, IBM Domino, FileNet Content Manager and WebSphere Portal Server. Its longevity in the market combined with its varied products have gained it a place in the Leaders’ Quadrant.
- Strengths: One of the most viable vendors in the space, IBM has well developed relationships with organizations and partners. It has identified social business as an important part of its overall strategy and has the technology and services to help clients develop social business strategies and social technologies. Connections continues to make headway in large organizations and has been cited favorably for its straightforward implementation.
- Cautions:While IBM continues to invest in Connections and adds new, or improved functionality, on a regular basis, its user base has been very slow to accept the idea of cloud collaboration through Cloud First, or SmartCloud. Gartner says that despite rationalization of the Connections product portfolio, more could be done to improve the user experience when using Connections with other IBM products in larger bundles.
This year marks the 5th consecutive year that Jive has made it into the Leaders’ Quadrant largely, Gartner says, because of its broad product capabilities and high visibility.
- Strengths: Jive is changing focus now after leading the pack with its social media platform that was picked up by early adopters. It is still in place in many of those companies. It is now focusing on large enterprises and promising accelerated adoption and acceptance. Jive also has a well-developed partnership program that includes companies like Logica and Accenture.
- Cautions: Gartner says that Jive owes much of its current success to the fact that it established itself early in the fast growing market. The market, as a result, is likely to become more challenging as more vendors reach “good-enough” status. It also lacks the breadth of adjacent abilities like document management, portal, or business intelligence. Jive is a small organization that needs to manage its evolution carefully.
Two of the best known products on the market at the moment -- Yammer and SharePoint -- have placed Microsoft in the Leaders’ Quadrant. While the two are often mentioned in the same breath, SharePoint has a much wider set of capabilities than Yammer, ranging from document management to application development and beyond. There are signs, though, that the two are increasingly becoming part of a single solution.
- Strengths: Enterprises usually buy SharePoint for the breadth of its capabilities and Yammer for its alignment with specific use cases. Pre-integration between the two is improving, Gartner says, with Yammer becoming the social layer across other Microsoft products. SharePoint 2013 brings full, multi-user document editing and sharing while there has also been noticeable improvements in its social capabilities. SharePoint’s reach is almost incontestable.
- Cautions: Microsoft needs to be clearer about the distinction between SharePoint and Yammer and needs to remove the overlaps. Over the next 12 to 24 months Microsoft will probably start offering a rationalized cloud-based version of the two. That said, many of Microsoft’s customers who are not ready to move to the cloud face a long transition period between the two.
Another giant in the Leaders’ Quadrant, Salesforce.com is there because of its social networking tool, Chatter, which is used for enterprise networking and sharing, as well as communications and capturing discussion ideas.
- Strengths: According to Garter, Salesforce has a strong vision of its social platform as a mobile, universally available and flexible working environment that is in sync with transactional applications. It works on a pure SaaS model in a mature environment that already offers a wide range of CRM applications. It can be used independently, but its value is augmented when used with other Salesforce.com products.
- Cautions: Although it has always supported collaboration in the CRM space, it is relatively new to the general collaboration space. Chatter is still evolving in terms of core functionality although this is due to be resolved by the end of this year. There are gaps in integration with third-party repositories, and needs better co-editing.
That’s the list of Leaders’ for this year. In a second part, we will take a look at the Challengers and, perhaps more importantly, the list of companies that didn’t make it into the Quadrant.