end of the road

Does Microsoft’s recent layoff of 40 Yammer Customer Success Managers spell the end of social business? I think the answer is yes … and no.

These specific layoffs were probably related to a consolidation of the Microsoft customer support team more than a statement about Yammer, but there have been other telltale signs that the world of social business is changing.

A Brief History of Social Business

You remember Social Business, don’t you? It was a way to harness the power of people working together using new collaborative technology to advance the way business gets done. It defined how businesses connect with customers and how “workers create, share, communicate and organize information … find experts, brainstorm, find answers to questions, learn, transfer knowledge, and make decisions that ultimately improve the way work is done.” 

Customer-facing solutions and internal collaboration software have long since diverged into two separate markets, but use of the term social business has (confusingly) remained for both. Eventually, the aspect of social business associated with internal collaboration came to be known as “social software for the workplace” by Gartner, and it is in this playground that Microsoft’s Yammer plays.

Not that Yammer is alone in this market. When Gartner started to track these tools in 2008, there were over 30 companies in its Magic Quadrant for Social Software for the Workplace, 2008. By 2015, only 14 products remained. While some attrition can be attributed to market consolidation, part of the shakeout is surely due to "opposition of these solutions by enterprises.”

Is Social Business Dead?

As we have seen, only half the original Social Business providers remain in the market. During this same period, Google Trends show a 50 percent drop in interest in "Social Business," from a peak in early 2012. 

Is Social Business dying? Hardly. A recent Gartner report estimated the size of the enterprise social software market to be $860 million in worldwide software revenue in 2014, a growth rate of approximately 6 percent from 2013. During the same period, the broader collaboration suite market (which also includes unified communications tools) was estimated to be $1.4 billion in worldwide software revenue, a growth rate of approximately 16 percent from 2013. 

So, how can we reconcile a decrease in interest in social business with the strong market growth in social business software?

Social Business is Maturing

The need for social business is not waning, but the way these solutions are perceived has changed. Here are some of the reasons that the first generation of social software solutions fizzled:

  • Originally conceived as standalone products, the solutions were disconnected from existing day-to-day business processes
  • The tools required individuals to work differently and people don’t like change
  • Social and collaborative software only work when there is a critical mass of participants the collaborative circle. Even early adopters stopped using the tools when they saw they were alone online …
  • With few workers using the tools, there was a dearth of valuable information available for use
  • The tools were proprietary, making it hard for workers to communicate with individuals who were not using the same software
  • ‘What’s wrong with email?’ — the tools didn’t offer much beyond what everyone was already using to share information — email

And herein lies the rub. With all these difficulties, standalone social software and collaboration products like Yammer, Jive and IBM Connections have proven difficult to institute.

Gartner noted in its most recent Social Software for the Workplace Magic Quadrant that “the thorniest issues that IT leaders face when choosing between products …increasingly have to do with embedding collaboration and social capabilities in the context of work, wherever that happens to be.” So, it’s not surprising that those companies left in the social business market are adapting.

The Future of Social Business

For social software to succeed, the next generation of solutions need to become an integral part of the business and become embedded in important work contexts. So how are vendors doing this? As usual, different vendors are taking different approaches.

IBM is focusing on email as a work context, by embedding Connections collaboration capabilities in its new Verse email offering.

Salesforce is taking a different tack, focusing on CRM business processes as a work context, by offering Chatter as a collaborative tool to enhance salespeople’s ability to work with prospects and customers.

And Microsoft is firing on all cylinders. It developed new collaboration capabilities in email with Office 365 Groups. It also continues to promote SharePoint social and collaboration features, which is often used in conjunction with document-intensive business contexts, such as managing records, projects, cases or clients. And lastly, it continues to promote the standalone social software tool, Yammer, bringing it into the Office 365 tool suite.

But these vendors are not alone. New entrants, coming from other segments, are beginning to converge on the social business market.

New Players

New players in the social business market are taking pages from the IBM, Microsoft and Salesforce playbooks. 

For example, Facebook, the newest entrant to the market with its Facebook at Work, is taking the "email" approach. It is banking on the considerable amount of time people already spend in the Facebook consumer app as a viable context that will carry over to the workplace. Slack, on the other hand, wants to become part of an existing business context by integrating "the tools you use," so that "you get all your notifications directly within Slack." 

While these are not the only new contenders, they represent two approaches to driving social business software adoption in the enterprise.

Ultimately, as organic workgroups select their own social business tools, a solution will be needed to provide a unified view of all the scattered information, without requiring complex integration. This genre of product, which Gartner is calling the Activity Hub, will be the topic of a future article.

In the meantime, rest assured, Yammer isn’t going anywhere and neither are the other remaining players, who will continue to vie for the $1.4 billion in potential software revenue.

Title image "The End" (CC BY 2.0) by  ewen and donabel