Leaving aside the astronomical market growth rate of vendors like IBM, Salesforce or Jive, the market for standalone enterprise social software (ESS) between now and 2017 will be characterized by the evolution of ESS applications into enterprise social networks (ESN) and compound annual growth of 22.3% to a market value of US$ 2.7 billion in 2017.
The findings are contained in International Data Corporation’s (IDC) market update on the ESS market in its Worldwide Enterprise Social Software 2013 – 2015 Forecast and 2012 Vendors’ shares report (price: US$ 4,900).
ESS Market Slowing
While IBM and Jive are expected to grow over this period by 35% and 53% respectively, and hold 14% and 10% of the market, IDC says that it expects the deployment of standalone ESS applications to slow down significantly compared with previous forecasts as more and more companies integrate and embed social components into other primary enterprise systems.
As this process evolves over the coming 4 years, and there is more convergence across these systems, IDC also says that it expects that standalone enterprise social software will grow to become enterprise social networks (ESNs) and may not even be considered as separate market by the end of this period.
The driver behind this is the entry of more informal methods of communication into the enterprise, forcing companies to look to social solutions for decision support as well as ad hoc workflow facilitators to support existing workflows.
The result is a work that will grow in value from US$ 1.0 billion in 2012 to US$ 2.7 million by 2017.
IDC ESS Research
The study itself is the result of a survey of the current market as it has developed since 2008 and predicts how it will evolve between now and 2017.
It defines ESS as software that facilitates social collaboration between users on either side of an organization’s firewall. It is used, generally speaking, by workers in non-customer facing roles, although customer interaction is possible.
Common functionality includes activity streams, blogs, communities, recommendation engines, discussion forums and many other different collaboration and social tools. Vendors generally provide either a single type of social functionality, or a broad-based platform either as an on-premises or a SaaS deployment.
ESS in 2012
Over the course of 2012, the adoption of ESS has continued apace with 79% of enterprises in IDC’s February 2013 Social Business Survey, saying they had deployed a corporate-sponsored enterprise social network. Of those, 28% said they had more than one active network within the company, with growth reported across all verticals.
Almost all of the vendors reported at least double-digit growth with Salesforce reporting a record-breaking growth of 1,118.5% — one thousand, one hundred and eighteen — year-on-year.
IDC attributes Salesforce.com’s growth to its focus over the past year on evangelism of Chatter from late 2011 as well as the conversion of Chatter Free customers to Chatter Plus, its premium offering.
For the period covered by forecast IDC says there are 3 factors that will drive revenues:
- The move towards the integration of social workflow with existing content collaboration and enterprise applications
- The integration of analytics and data as social workflow reaches every corner of the organization.
- Enhanced social capabilities enabling social workflows, although this does not necessarily mean new applications.
But there are also inhibitors to growth during the same period. They include:
- Deployment of ESS is already high so increases in revenue here will be nominal
- The IT department will be increasingly involved in deployments and integration to ensure security and compliance
- Geographically, a large part of the revenues are coming from the Americas as both the EMEA (Europe, Middle East, Asia) have a longer timeframe for the move from standalone to ESN.
Global revenues will slow down significantly particularly in relation to IDC’s previous forecast, which was published in June 2012.
This slowdown will be a response to the fact that as the nature of enterprise communications change with the growing impact of online social interactions, the new dynamics that this produces will see an increased level of automation in enterprise social systems.
The result is that the processes inherent in ESS will become embedded in other enterprise applications rather that a function of standalone applications.
To enable this, open APIs will have to be developed to enable information assets to be syndicated and distributed as callable IP assets via API. This is only a summary of the main, detailed findings, which is available from IDC for US$ 4,900.
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