social business,Social Software Merger a Harbinger in Growing Market?The social and collaboration market is growing, and will continue to grow. Right now, Gartner has the market estimated at US$ 840 million and growing at a clip of 13.4% annual to arrive at US$ 1.4 billion by 2016. 

Industry Saw This Coming

So is it really shocking that social business software players Mindjet and Spigit announced a major merger this week, combining innovation management platforms capabilities (Spigit) with project-based collaboration software (Mindjet)?

We didn’t think so. In fact, we expect more acquisitions coming down the pike. It’s becoming continuously hard for vendors to distinguish themselves in the market from one another -- so why not join forces and become stronger?

"I think it’s a portent of what’s to come," Sarah Carter, general manager for social business at Actiance, told CMSWire. "Niche players and specialists merging to form a bigger entity that delivers more business value that will ultimately take on the 'big boys,' which will of course drive innovation everywhere -- and further M&A activity. I think it also shows that it's not necessary for one solution to deliver everything, but that what we’ll see in the future is the co-opetition of solutions and companies to drive ultimate collaboration."

Mergers like this can only be good for an already-growing industry, said Nathan Rawlins, vice president of product marketing for Jive Software, one of Gartner’s 2013 workplace social software leaders along with IBM, Salesforce and Microsoft. We reached out to Rawlins the day after the merger to catch up about the industry. 

Though he hasn’t invested much time into the details of the merger, he sees it as two companies joining forces to increase ideas and innovation platforms. 

“Ideas and innovation are a key part of the way people work,” Rawlins added. “… Overall in the market, I think it’s great when they are players coming together within a particular area. It strengths the market.”

Merger Details from Mindjet

Becoming stronger was the goal of Mindjet about three months ago when it began talks of acquiring Spigit, Mindjet CEO Scott Raskin said in an interview yesterday with CMSWire. 

Essentially, acquiring Spigit was about leveraging its capabilities to reach a large group of influential innovators. Providing the visual tools to brainstorm and make decisions about where, when and how organizations want to market their brand is Mindjet’s sweet spot.

And now, they say, that's enhanced with a customer reach into the 5 millions with the acquisition this week.

“You read every piece of research and what’s on the top of the minds for C-level executives -- how to make their businesses more innovative,” Raskin told us.

A few other details from the merger Raskin shared with us:

  • Mindjet will maintain the name, and Raskin remains CEO, while Spigit CEO Paul Pluschkell becomes the chief innovation officer
  • The company will keep the brand name Spigit Engage (the innovation platform) along with Mindjet ProjectDirector (social project manager) and Mindjet MindManager (brainstorming, mapping)
  • No layoffs were announced, and the company now has about 420 employees (300 Mindjet and 120 Spigit) 
  • Mindjet has had a 10-year compounded growth rate of more than 25 percent

Going Forward in Social Software 

When asked about competition in the social software market, Raskin said it’s exciting to be growing in an innovation software market he said is a forecast to reach US$ 6 billion. He’s keeping tabs on all the leaders from Gartner’s Magic Quadrant, he said.

“One I think about constantly is Jive Software,” he said. “They have a module called Ideas. And they have a social product management app. Then you look at folks in the space like Yammer, Microsoft, IBM and Salesforce.”

The top companies, Raskin said, are moving to solve problems for organizations through means other than generic software.

It’s a “dynamic market," Jive’s Rawlins said, “where you’ve got many players that have changed within the last year. Yammer is a prime example where the focus has changed.”

How so?

Change among these organizations, Rawlins said, depends “largely on the dynamic of the company.”

“Microsoft is moving because of real business needs at Microsoft,” Rawlins added. “We think there’s a great opportunity in the market, and we are solely focused on helping the end user get more work done.”