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COMPETITIVE ANALYSIS Worldwide Enterprise Social Software 2011 Vendor Shares Michael Fauscette

Vanessa Thompson

2011 was a better year than 2010 for the software marketplace. A general economic recovery was broadly in evidence, although different market segments performed in different ways. The enterprise social software market showed significant gains. Specifically:  Worldwide revenue for the enterprise social software market was $767.4 million in 2011, representing growth of 39.8%.  The top 3 vendors in 2011 based on worldwide revenue were IBM, Jive Software, and Communispace, together accounting for 30% of the market total.  Enterprise adoption of social software has accelerated over the past few years as companies look for competitive advantage through productivity increases generated by the use of social tools in building a more collaborative and knowledge sharing environment.

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Filing Information: June 2012, IDC #235273, Volume: 1 Enterprise Collaboration and Social Solutions: Competitive Analysis


IN THIS STUDY This IDC study examines the enterprise social software market for the period from 2009 to 2011. Revenue and market share of the leading vendors are provided for 2011.

Methodology See the Methodology in the Learn More section for a description of the data collection and analysis employed in this study. In addition, please note the following:  The information contained in this study was derived from IDC's Software Market Forecaster database as of May 9, 2012.  All numbers in this document may not be exact due to rounding.  For more information on IDC's software definitions and methodology, see IDC's Software Taxonomy, 2011 (IDC #228020, July 2011).

Enterprise Social Software Market Definition Enterprise social software offerings bring enhanced social collaboration capabilities to users who are either inside or outside an organization's firewall. Those users primarily in non–customer facing roles are the focus of these solutions, but customer-facing interactions may also occur. Common Enterprise 2.0 functionality offered in enterprise social software solutions include, but are not limited to, activity streams, blogs, communities, discussion forums, groups (public or private), ideas, microblogging, profiles, recommendation engines (content or people), tagging, bookmarking, and wikis. Vendors tracked in the enterprise social software market can offer discrete solutions supporting one type of social functionality (such as community management, ideation, innovation management, or activity streams) or a broad-based platform that encompasses many functionality traits. A variety of deployment options (on-premise, SaaS, hosted application management, or software appliance) are made available.

SITUATION OVERVIEW The Enterprise Social Software Market in 2011 Table 1 displays 2009–2011 worldwide revenue and 2011 growth and market share for enterprise social software vendors. Enterprise social software adoption has accelerated significantly across almost all industry verticals and is becoming a critical decision support and worker productivity tool. Many companies are building and implementing an overall social business strategy and enterprise social software is a critical component of that strategy. Growth for 2010–2011 for almost all vendors in the market was double digit, with the top 2 vendors, IBM and Jive, seeing >70% growth, almost double the overall market average. The fastest-growing vendor in the top 20 was Yammer, with a growth rate of 132.3%.

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TABLE 1 Worldwide Enterprise Social Software Applications Revenue by Vendor, 2009–2011 ($M)

2009

2010

2011

2011 Share (%)

2010–2011 Growth (%)

IBM

47.2

60.2

105.4

13.7

75.1

Jive Software

24.3

37.8

65.3

8.5

72.8

Communispace

35.0

45.1

59.8

7.8

32.6

Telligent

25.0

32.1

42.7

5.6

33.0

Socialtext

20.0

25.9

34.5

4.5

33.2

Mzinga

16.0

24.0

31.7

4.1

32.1

Lithium

17.5

22.2

29.5

3.8

32.9

Yammer

1.2

9.6

22.3

2.9

132.3

12.0

18.5

2.4

54.2

VMware

7.0

10.0

17.6

2.3

76.0

Spigit

6.5

10.0

14.9

1.9

49.0

INgage Networks

7.5

9.7

12.9

1.7

33.0

Awareness

5.5

7.1

9.5

1.2

33.8

2.5

4.2

0.5

68.0

Cisco

1.0

1.5

2.0

0.3

33.3

Live World

2.0

1.4

1.5

0.2

7.1

Oracle

1.0

1.3

0.2

30.0

Attachmate

1.0

1.3

0.2

30.0

Salesforce.com

1.0

0.1

NA

EPiServer

0.9

0.1

NA

Saba Software Inc.

0.2

0.8

0.1

300.0

0.3

0.4

0.4

0.1

NA

Subtotal

216.0

313.7

478.0

62.3

52.3

Other

190.5

235.3

289.4

37.7

23.0

Total

406.5

549.1

767.4

100.0

39.8

NewsGator

blueKiwi

Zoho

Source: IDC, June 2012

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IBM demonstrated the strongest 2011 market share of 13.7%, representing $971.2 million in revenue. IBM has seen one of the strongest growth rates in 2011, at 75%, second only to VMware (SocialCast). This growth is on the back of the IBM Integrated Collaborations Solutions group placing clear focus on the IBM Connections portfolio, as well as the promise of "Connections Next," or IBM Connections 4.0, expected to go to market in 2H12 initially in the United States. This next release has an emphasis on embedding social activity streams into the Lotus Notes client and encompasses OpenSocial 2.0 application integration standards. IBM has placed considerable focus on the user experience of Connections, with the primary goal associated with raising employee engagement in order to validate the investment in enterprise social software. Jive Software followed up strong growth in 2010 with an even better result in 2011, growing at 72.6% and increasing market share from 6.9% to 8.5%. The announcement of a strategic partnership with Polycom in September 2011 outlined the Jive focus on an enhanced and blended user experience combining video and audio with social capabilities as customers increasingly look to social to complement traditional collaborative tools. Since 2010, Jive has been consistently adding new features and functions to complement existing solutions, from the basic API level right up to the user experience. Expanding the ISV ecosystem through the Jive Apps Market has been a strong pillar of growth, with the focus continuing through 2012 with the launch of Jive !App Experiences, to integrate applications into business workflow processes.

FUTURE OUTLOOK Businesses are turning to social software in increasing numbers as companies look for ways to increase collaboration, manage a growing deluge of content and information, and increase productivity and innovation. Employees insist on social tools that are similar to consumer social tools they use in their personal lives. Social software provides the experience and functionality of consumer tools but is built to scale and provide enterprise security. IDC's Social Business Surveys have shown that the top reasons for using social software was to acquire or share knowledge and communicate with colleagues, signaling the intent of businesses to adopt a more social workflow. Businesses are embedding social capabilities into work process, tying together people, data, content, and systems as well as facilitating the connection to ad hoc tasks. Companies are expanding the use of social software tools to provide a collaborative framework internally, and IDC expects that this framework will extend to partners, suppliers, and customers, building a networked business. As the use of social software increases, the operational dynamics of a business change. The ripple effect is a change in the nature of business relationships, and organizations will increasingly look to measure this impact. Socialytic applications that analyze the social interaction data of topics, ideas, locations, or other people will increase in line with the uptake in social software. Key metrics such as participation rate and level of engagement will be measured, along with the leading business indicators of ideation and innovation that have emerged through the change in business dynamics.

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The next stages of the social software market will see rapid change as new features are being defined and incorporated to meet emerging business needs. Increasingly, companies will want to integrate and even embed social software into all enterprise applications, so it is essential for vendors to provide open APIs and capabilities to put social software into the enterprise workflow.

ESSENTIAL GUIDANCE For Vendors For vendors providing social software or contemplating entering the market, IDC offers the following considerations:  Social software covers a broad range of features and functions; companies are looking for ways to integrate collaboration and communication, with social software forming the backbone of the network.  Increasingly, companies are thinking of social solutions as decision support and ad hoc work facilitators and are looking for richer features that integrate analytics and data with people and systems.  Social software can operate as a distinct layer, but increasingly, companies need social solutions that can also be embedded into the workflow and into other existing enterprise systems.  Social software is growing into enterprise social networks (ESNs) that include key functionality like profiles, activity streams, blogs, and wikis. Whether these ESNs are from a single vendor or an integrated set of services is less important than providing the integrated capabilities and connecting to other key social systems including external customer-facing solutions.

For End Users For end users/companies evaluating social software, IDC offers the following advice:  Social software should provide the foundation for building an enterprise social network, connecting employees to each other, to data, content, and other systems, and to external constituents.  Social software can't successfully exist in the long term in a standalone approach but instead should bring together other enterprise communication tools, either by aggregating into a new user experience (UX) or by embedding into existing tools like email systems.  Social software should provide the ability to intelligently filter information so that employees can, with system help, surface important information in the work context.

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 Successfully implementing social software requires more than simply executing the IT project; it must include behavioral change management efforts to facilitate the accompanying culture shift. Approaches can include using community managers and champions to promote adoption as well as having visible executive support to encourage use.  Social software projects can provide significant value and should be tied to key business metrics like increasing revenue, increasing profits, increasing productivity, raising product/service quality, and increasing innovation.

LEARN MORE Related Research  Lotusphere 2012: A Social Business Evolution (IDC #233222, February 2012)  Worldwide Software Business Solutions 2012 Top 10 Predictions (IDC #233104, February 2012)  Bringing Social Media Controls to Financial Services: Actiance Announces the General Availability of Socialite Engage (IDC #232868, January 2012)  IGN Entertainment Yammers for Collaboration (IDC #230895, October 2011)  The State of Social Software Adoption: A Consumer View (IDC #230892, October 2011)  Enterasys User Salesforce Chatter to Fuel Collaboration Among Employees and Create Socially Aware Applications (IDC #230621, October 2011)  IDC's Social Business Taxonomy, 2011 (IDC #230541, October 2011)  The State of Social Software Adoption: An Enterprise View (IDC #229775, August 2011)  Social Business Maturity Model (IDC #229292, July 2011)  IDC's Software Taxonomy, 2011 (IDC #228020, July 2011)

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Methodology The IDC software market sizing and forecasts are presented in terms of packaged software revenue. IDC uses the term packaged software to distinguish commercially available software from custom software, not to imply that the software must be shrink-wrapped or otherwise provided via physical media. Packaged software is programs or codesets of any type commercially available through sale, lease, rental, or as a service. Packaged software revenue typically includes fees for initial and continued right-to-use packaged software licenses. These fees may include, as part of the license contract, access to product support and/or other services that are inseparable from the right-to-use license fee structure, or this support may be priced separately. Upgrades may be included in the continuing right of use or may be priced separately. All of these are counted by IDC as packaged software revenue. Packaged software revenue excludes service revenue derived from training, consulting, and system integration that is separate (or unbundled) from the right-touse license but does include the implicit value of software included in a service that offers software functionality by a different pricing scheme. It is the total packaged software revenue that is further allocated to markets, geographic areas, and operating environments. The market forecast and analysis methodology incorporates information from five different but interrelated sources, as follows:  Reported and observed trends and financial activity. This study incorporates reported and observed trends and financial activity in 2011 as of the end of February 2012, including reported revenue data for public companies trading on North American stock exchanges (CY 1Q11–4Q11 in nearly all cases).  IDC's Software Census interviews. IDC interviews all significant market participants to determine product revenue, revenue demographics, pricing, and other relevant information.  Product briefings, press releases, and other publicly available information. IDC's software analysts around the world meet with hundreds of software vendors each year. These briefings provide an opportunity to review current and future business and product strategies, revenue, shipments, customer bases, target markets, and other key product and competitive information.  Vendor financial statements and related filings. Although many software vendors are privately held and choose to limit financial disclosures, information from publicly held companies provides a significant benchmark for assessing informal market estimates from private companies. IDC also builds detailed information related to private companies through in-depth analyst relationships and maintains an extensive library of financial and corporate information focused on the IT industry. We further maintain detailed revenue by product area models on more than 1,000 worldwide vendors.

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ď š IDC demand-side research. This includes interviews with business users of software solutions annually and provides a powerful fifth perspective for assessing competitive performance and market dynamics. Direct conversations with technology buyers provide an invaluable complement to the broader surveybased results. Ultimately, the data presented in this study represents IDC's best estimates based on these data sources as well as reported and observed activity by vendors and further modeling of data that we believe to be true to fill in any information gaps.

Synopsis This IDC study examines the social software applications market from 2009 to 2011. Revenue and market share for the leading vendors are provided for 2011. "Social software is gaining in momentum in the enterprise," says Michael Fauscette, group vice president for IDC's Software Business Solutions Group. "Companies are seeing significant gain in productivity and increasing value from successfully deployed social software solutions including supporting ad hoc work by bringing people, data, content, and systems together in real time and making more effective critical business decisions by providing the 'right information' in the work context."

Copyright Notice This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit www.idc.com to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit www.idc.com/offices. Please contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights. Copyright 2012 IDC. Reproduction is forbidden unless authorized. All rights reserved.

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