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3/8/2004
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The Current State of Collaboration

"Collaboration" is a term that is on everyone's lips, and there is hardly a software vendor out there that has not included collaborative functionality into their product.  That is the good news.  The bad news is that in doing a number of interviews and case studies over the last few months where we are looking at the "persception of value for collaboration technologies."  What we found is that the adoption and depolyment of these technologies is not occuring in any type of organized manner, and consequently is not at at the level we expected in most organizations.

There is good new and bad news. Although there are more vendors offering collaborative functionality than ever before, the adoption or uptake of these technologies is not as strong or as organized as we were hoping tot see!

"Collaboration" is a term that is on everyone's lips, and there is hardly a software vendor out there that has not included collaborative functionality into their product.  That is the good news.  The bad news is that in doing a number of interviews and case studies over the last few months where we are looking at the "persception of value for collaboration technologies."  What we found is that the adoption and depolyment of these technologies is not occuring in any type of organized manner, and consequently is not at at the level we expected in most organizations.

The State of Real Time Collaboration

RTC tools including IM, EIM, web conferenceing, e-meetings, etc. is actually doing pretty well. We see the growth rate in this market segment at almost 30% CGAR, and are seeing some indications of enterprise adoption of these technologies. Oracle with it's RTC suite, Microsoft with LiveMeeting, IBM/Lotus SameTime and WebEx, the big 4 vendors in this area are all focused on the enterprise.  Oracle, after using its self as a guinea pig, is now rolling out its RTC suite to it's customers. Microsoft is making a big push with LiveMeeting and will be embedding a 10-user license into many of Microsoft's collaboration servers starting this Summer. In addition, they are adding in VoIP and telephony through a project code-named Istanbul.  You can be sure that the next version of Office (2005, 2006 ?) will have even more collaborative functionality integrated into it, and not only work more with MSN but with Live Meeting Server.  Lotus SameTime offers good presence functionality, have integrated with Lotus Workspace and also they are doing some interesting work in the expertise location area.  WebEx, the market leader in the web conferencing space has focused on the ASP model, but will now be moving to not only a premesis-based offering, but they are also offering a free service for small groups to use their tool (2-3 people) and meet for limited periods.

Using The Tools

There are a few reasons for RTC technologies not to have penitrated into the organization further and faster:

  • Education- some people are still don't know about these tools, or if the do are often scared to use them
  • Perception of Cost- Some RTC tools are still seen as very expensive and so only to be used for special events, like a presentation from the CEO
  • Ease of use- WebEx's new version goes a long way to address this particular issue, but complex tools with lots of functionality are not usually what first time users need, they need the basics, and it has to be easy to use and bullet proof

Despite these reasons holding back the adoption of RTC technologies, we still see a healthy rate of growth and adoption of RTC tools, especially in the e-meeting area (small meetings of up to 6 people that are highly interactive and secure). We still see over 90% of online meetings falling into this category, and see this area as the largest growth area for RTC over the next few years. Online learning (virtual classroom) is growing but at no where the rate of e-meetings. The third segment of RTC, larger meetings or ePresentation as we call them at CS, is also growing but again not as fast as the eMeeting segment. We recently talked with Vcall (they acquired Linktivity last Fall) and they are focused in the ePresentation area (which they define as web conferneces that have 15 or more people), which is an interesting strategy, since we think most of the other vendors will focus on the high growth eMeeetings area.

Consolidation as Elephants Dance

There are 3-4 large vendors in the RTC space that dominate the space, with about 6-8 players in the second tier and 60-80 other smaller players in the third tier.  Over the last 6 months we have seen at least one merger/acquisition a month. Usually, between second and third tier players or two third tier players trying to move up through aggregation to a second tier player.  We expect to see this type of consolidation to continue for the next year or two, as this segment does not need 80 vendors, but could easily support 8-10 players in the first and second tier with an additional 10 players that are smaller, more nimble innovative and vertically focused in the third tier.

Asynchronous Collaboration

One of the trends we have seen over the last few years is that of convergence. Nowhere is convergence more prevelent then in the asynchronous space. Sherpa Project and eRoom are both good examples of this trend. Sherpa integrates good basic project and team functionality with IM and presence detection.  eRoom, one of the early asynchronous team applications, has been moving in the real time direction for years, and offers some RTC functionality (you can detect the presence of and chat with others in your eRoom). But we hear that eRoom has actually given up in building their own RTC functionality and will be partnering with an RTC vendor in the near future to add even more RTC functionality througout the Documentum/eRoom product line. Many ofthe DPM (distributed project management) vendors which comprise the majority of this space today (along with the virtual team tool vendors) are moving up the food chain and going after the enterprise. In a recent briefing with PlanView, their new focus is on enterprise IT makes them a direct competitor with Primavera and ChangePoint (now owned by Compuware) who have also targeted the same space.

Collaboration Trends
  • Moving from technologies to solutions. This is not only a sign of a maturing market, but also a sign that collaboration technologies has crossed the chasm (to quote Geoffrey Moore) in many area, and is becomming more of the normal business environment.
  • Moving from presentation to interacton.  We are getting fewer people telling us that reciprocal data access is collaboration, and more and more people are understanding that it is the interaction (as well as the contant) that create value. Those at the head of the curve also understand that the business process (context) within which the interaction occurs is also critical.
  • Pushing Functions into Infrastructure.  Cisco, Microsoft, IBM and some of the other elephants now in the collaboration market segment are trying to push collaborative functionality down into the infrastructure layer and make "presence" or IM available to any application. We are not against this, we just think that the infrastructure for collaboration is not quite there yet, and that the collaborative functions that are pushed into the infrastructure need to be dead easy to use as well as bullet proof.
  • Verticalization of the Collaboration Market.  When a bunch of big elephants jump into the pool, that is the cue for everyone else to jump out. Many of the smaller collaboration vendors are doing just that, and focusing on adding value in a variety of verticals, either through in-house expertise or through partnerships. The master at this is OpenText, who over the last 2 years has not only partnered on specific verticals, but on specific processes in specific verticals making a strong case for the value they are adding.
  • Lack of Standards. For such a large (CS estimates the collaboration market value for 2005 is over $32 billion) market, it is amazing how few standards there are in this segment.  Most of the standards that were created are pre-web standards that work great on a LAN, but are not always appropriate for today's browser-based collaborative environments. A variety of end-user organizations have started to look at and drive standards for collaboration in specific verticals (financial), but there still do not seem to be any standards other then a few technology standards, some of which, like SIP/SIMPLE are de facto. However, standards are also a sign of a maturing market, which means that the collaboration space has a long way to go before it meets the level of maturity that most vendors think it is at today.
Summary

The state of collaboration today can be summed up as, progressing nicley, but not as fast as we would have liked. Some of this is due to issues around education, lack of standards, or the inability to identify a role/title/position in most organizations to champion collaboration. The challenge for most collaboration vendors today is to do more than just sell technology, but rather help their prospects understand how that technology is a solution to a specific problem they have.  The challenge for the end-user is to understand that many of the challenges they see today in sales/marketing, new product development (R&D), or customer and supply chain managment (exception handling) are really collaboration problems and could benefit from the prudent application of collaborative technologies.I believe that by this time next year, both groups will have made significant progress, and my "State of Collaboration" will be more optimistic.

{mosimage}David Coleman is the Founder and Managing Director of Collaborative Strategies CS). He is the author of two books on groupware, and is the editor and writes the “Guru's Corner” column for this newsletter. He can be reached at davidc@collaborate.com or 415-282-9197.

  

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