Which Vendors Dominate Enterprise Collaboration?

The largest enterprise social software vendors still control only a slice of the market.

According to IDC, the enterprise social software market was just shy of $800 million in 2011, which represented 40% growth compared to 2010 and 100% growth compared to 2009. IDC's definition included companies that "bring enhanced social collaboration capabilities to users who are either inside or outside an organization's firewall." That is, they included the vendors of both employee-facing and customer-facing collaboration software.

Considering that 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 than 20% of that 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 that sounds about right.

IDC also looked at how much market share various vendors have in the enterprise social software space. Again, keep in mind this includes vendors that offer software for employees and/or customers. Before reading on though, who do you think has the largest 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 -- 132% compared to last year. Another thing I noticed is that Microsoft wasn't included in the list. If memory serves me right, Microsoft has around 40 million paying customers, which should put it near the top of this list. (Remember, Microsoft now owns Yammer, as well.) However, its omission may be because at the time it was written Microsoft didn't offer a set of capabilities to be considered an "enterprise social software" vendor. Another interesting thing I noticed is that Salesforce.com is at the very bottom of the totem pole, with just 0.1% market share.

Here is how the overall market share breaks down:

Jacob Morgan's The Collaboration Organization is a comprehensive strategy guide on how to use emerging collaboration strategies and technologies to solve business problems in the enterprise. It has been endorsed by the former CIO of the USA, CMO of SAP, CMO of Dell, CEO of TELUS, CEO of Unisys, and dozens of other business leaders from around the world.

More by Jacob Morgan

What's particularly interesting about this chart is that, currently, the vast majority of the enterprise social software space is not dominated by big players. Instead, it's led by the smaller and perhaps lesser-known players such as MangoApps, Igloo and others. 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.

This tells me a couple of things. First, 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. Many companies are still exploring these solutions and strategies and have not made investments yet. Second, we can expect to see plenty of other acquisitions from the larger companies who are looking to grow market share in this space.

Many companies that I and Chess Media Group work and speak with today are either investing or strongly considering investing in collaborative strategies and tools today. Enterprise social software has already received quite a lot of attention, and executives around the world are considering it as a top priority. 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.

Social media make the customer more powerful than ever. Here's how to listen and react. Also in the new, all-digital The Customer Really Comes First issue of The BrainYard: The right tools can help smooth over the rough edges in your social business architecture. (Free registration required.)