Which Vendors Own the Enterprise Social Software Market?

JacobMorgan
Jacob Morgan Principal, Chess Media Group

Posted on December 15th 2012

Which Vendors Own the Enterprise Social Software Market?
Big hat tip to Patrick Allman from Mango Apps for getting my attention to this!

According to IDC the enterprise social software market was just shy of $800 million in 2011 which represented a growth of 40% when compare to the previous year and a growth of 100% when compared to 2009.  In this case, enterprise social software offerings were referred to as companies that: “bring enhanced social collaboration capabilities to users who are either inside or outside an organization’s firewall.”  Meaning this included vendors who offer both employee and customer facing collaboration solutions.

Considering annual revenues are predicted to break $4.5 billion by 2016 (even higher by some estimates) this really shows how early we are in this industry.  We’re looking at less then 20% (around 17-18%) of revenue today.  It’s interesting to compare this to the Innovation/Technology Adoption Cycle below which puts us just around the “early adopters” category (based on revenue).  I spend a lot of time in the world of collaboration and based on what I’m seeing I’d say that this sounds about right

IDC also looked at how much market share various vendors have in the enterprise social software space, now again keep in mind this includes vendors that offer solutions for either/both employees and customers.  Before reading on though, who do you think has the most market share?

The top 3 vendors based on market share are:

  1. IBM (13.7%)
  2. Jive Software (8.5%)
  3. Communispace (7.8%)
However, Yammer saw the strongest overall growth when compared to last year of around 132%  One things I also noticed is that Microsoft wasn’t included in the list which if memory serves me right, has around 40 million paying customers and would most likely put it right near the top of this list (remember Microsoft now owns Yammer as well).  Another interesting thing I noticed is that Salesforce is at the very bottom of the totem poll with just 0.1% market share.
 
Here is how the overall market share breaks down:
 

What’s particularly interesting about this chart is that currently, the vast majority of the enterprise social software space is not being dominated by big players, instead it’s being dominated by the smaller and perhaps lesser known players.  We haven’t broken the billion dollar mark yet so we’re not exactly talking about large sums of money here but around $340 million dollars is sitting with the smaller guys.

When I look at something like this I see a few things.  The first s that there is still a tremendous amount of opportunity in the enterprise social software space, we haven’t even cracked 20% of where we are going to be in just 3-4 short years.  The second things this tells me is that we can expect to see plenty of other acquisitions from the larger companies who are looking to grow their market share in this space.

Many companies that I and Chess Media Group work with and speak with today are either investing or strongly considering investing in collaborative strategies and tools today.  In fact enterprise social software has already received quite a lot of attention and is already being considered as a top priority for executives around the world.  I look at that and think of what things will be like in 2016 and it gets me very excited for the future.

The future of work and management is changing forever and it’s going to be an exciting ride…for the smart and innovative companies.

 
 
 

JacobMorgan

Jacob Morgan

Principal, Chess Media Group

Principal and co-founder of Chess Media Group, a management consulting and strategic advisory firm on employee, customer, and partner collaboration. Author of "The Collaborative Organization," the first comprehensive strategy guide to emergent collaboration in the workplace- endorsed by executives such as the former CIO of the USA, CMO of SAP, CEO of Unisys, CMO of Dell, and dozens of others, available wherever books are sold!  On Twitter @JacobM.

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Comments

woutbucker
Posted on December 16th 2012 at 1:42PM

Confirms my opinion that IBM is market leader with Connections. Version 4.0 will strengthen their position. Enterprise Social Software should be availeble on every platform and device. That should be the primairy focus of Jive. Interesting that Microsoft seems to miss the train here, integration with Yammer will take too much time to catch up with the market leaders.

Jason Stone
Posted on March 6th 2013 at 4:25PM

Jacob- 

Do you know what the $800 million represents? Is this solely license sales or does the figure also include supplemental revenues (from integration / implementation)? I expect the latter, but thought it better to ask.

Jason

AStephen
Posted on March 8th 2013 at 4:04PM

My prediction is, that there will be a great shift to systems that are integrated or can be integrated in existing systems like CRM, ERP or Intranet. Most companies don't want just another isolated application that creates new system gaps.

jobrownes
Posted on April 9th 2013 at 8:52AM

The market seems to still be very fragmented and there's a lot of new arrivals and smaller companies arriving. I've been testing many of the smaller vendors as they seem to have more innovativity in them. They do lack some features of course, but for organizations less than 1000 people they might be better. I last week found this newcomer called eee.do, http://eee.do which seems to be very promising with its tag cloud based navigation.