The Enterprise Social Intranet & Team Collaboration Software market grew by 40% in 2011 with total sales of $767.4 million. This represents a 100% increase since 2009, and according to respected research firm IDC, the enterprise social software market is expected to continue its strong growth, with annual revenues projected to exceed $4.5 Billion by 2016. The best enterprise social software vendors are seeing their revenues double year over year.
Who has a whopping 44% majority of the market share, leading the best enterprise social software vendors? Hint: It’s not IBM, they have 14% market share. Hint#2: It’s not Jive, they only have 8%. Hint #3: It’s not Yammer, they have less than 3%.
The top enterprise social software provider with a 44% market share is… the smaller aggressive start-ups. A collection of many small firms (MangoApps, Huddle, BlueKiwi and more) accounted for an incredible $340 million in revenue in 2011.
How the Start Ups are Winning
How and why are the smaller firms claiming the lion’s share of revenue? The answer is simple. The smaller firms cater to the SMB and mid-market space, and these customers out number the Fortune 500 companies targeted by larger vendors.
SMB and mid-market companies are now requiring the enterprise-grade security, customization, and integration usually reserved for larger Fortune 500 accounts.
While IBM & Jive’s of the world are happy to perform custom work for Fortune 500 accounts, they expect SMB and mid-market customers to accept their solution as is out-of-the-box.
Since significant value is gained by integrating existing business applications with the new enterprise social network, custom work is essential. Smaller providers of enterprise social networks are often happy to customize a solution for SMB and mid-market customers. The best enterprise social software provider may vary depending on the customer’s needs.
Finding the Best Enterprise Social Software Vendor
When Solera Networks, a big data security intelligence and analytics company in Utah, wanted to implement a social collaboration network, they looked at all vendors. Solera is a mid-sized company, yet they had specific “must have” needs that would require any vendor to customize their offering. Solera demanded the higher security of a single-tenant private cloud deployment, plus Solera also needed customization to accomplish the specific capabilities they had in mind.
Solera found most vendors expected small-mid size firms to accept their offering “as is.” Vendors that agreed to perform customization quoted the cost so high it was not economically feasible.
Solera then found MangoApps, a Gartner “Cool Vendor” specializing in the SMB and mid-market space. After reviewing Solera’s requirements list, MangoApps quickly agreed to customize a private cloud solution. Less than 30 days later, Solera was up and running with their new enterprise social network which matched their needs exactly.
The Future is Social
The writing is on the wall. Enterprise social networks are replacing email for communication, collaboration, and file sharing at work. Most will even allow you to invite in external “guests” so you can collaborate with partners, suppliers, and customers as well.
What do you think? Will the best enterprise social software become the next business tool you wonder how you ever lived without? Before you answer too quickly, think back to when you questioned the need for email (I have a phone), cell phones (I already have a desk and home phone!), and more recently Facebook (I already have email why do I need another thing to check!).