Enterprise Collaboration Software Market Trends

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Enterprise Collaboration Software
Market Trends

by Rochelle Shaw

Docid: 00018770

Publication Date: 1807

Report Type: MARKET


Because of the expanding global marketplace and an increasingly geographically
dispersed and mobile workforce, enterprises need to become more interconnected
both internally and externally to succeed. Virtual offices and mobility are prevalent,
so collaboration technologies have become a business necessity for
accessing and sharing information and applications, often in real-time. The need exists to pool and mine employee, partner,
and customer knowledge and to manage today’s abundance of information efficiently
and effectively in more and more virtual environments. Enterprise collaboration
software can help. This report analyzes the current market, identifies the key
players and trends, and provides guidance to organizations that are evaluating
collaboration software solutions.

Report Contents:

Executive Summary

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With the expanding global marketplace and an
increasingly geographically dispersed and mobile workforce, businesses need
enterprise collaboration software to stay connected and maximize productivity. 

Enterprise collaboration software
comprises many tools, but social networking has
made the largest impact on enterprises; many vendors, including Facebook, have released business
versions of such software. 

Faulkner Reports
Conferencing Market Trends

Vendors need to
educate users more clearly on how "social" software can have business
applications. Businesses also need to determine which Enterprise Collaboration
software best suits their strategic objectives and have IT support what many of
their employees have found to be useful already.


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Enterprise collaboration software came into being in the mid-1980s when Ray
Ozzie, one of the personal computer’s first "wunderkinds," created
the software that would come to be known as Lotus Notes. Ozzie’s storied
career included stints at Software Arts, Iris Associates, Lotus
Development Corp. (later acquired by IBM), and Groove Networks, and chief software
architect at Microsoft, a role he took over from Bill
Gates in 2006. However, Ozzie stepped down from his role at
Microsoft in 2010. He then started a new company called Talko, which in 2015 was
purchased by none other than Microsoft.

This market is growing, but analysts differ in their estimations of current
and future market size. While they seem to agree on a growth rate of between 12
percent and 13
percent during the next four to eight years, some analysts estimate that the
market size will exceed US$8.5 billion by 2024; others predict the market will
grow from US$34.57 billion in 2018 to US$59.86 billion by 2023. 

According to Synergy Research Group, the worldwide market for enterprise
collaboration software hit a new all-time high in the fourth quarter of 2017,
growing by just under 10 percent for the year. Synergy also states that their
research shows strong growth in cloud-hosted collaboration solutions, which saw
revenue rise by 26 percent in the quarter from a year ago, while revenue from
on-premises collaboration software declined 4 percent.

Because of the expanding global marketplace and an increasingly geographically
dispersed and mobile workforce, enterprises need to become more interconnected
both internally and externally to succeed. Yankee Group indicates that
over 40 percent of the workforce is now mobile, and IDC predicts that the world’s mobile
worker population will exceed
million by 2020 – that’s nearly
three-quarters of the entire workforce.

Enterprise collaboration software is occasionally referred to as Enterprise 2.0.
Andrew McAfee, author of Enterprise 2.0 and Associate Professor, Harvard Business School, defines Enterprise
2.0 as "the use of emergent social software platforms within companies, or
between companies and their partners or customers." Forrester Research
likewise describes it as collaboration and productivity tools based on the
concepts of Web 2.0, but designed for the enterprise. Forrester
refined the definition by stating that Enterprise 2.0 does not include consumer
applications, such as Facebook, which is supported by ads. Enterprise
collaboration software is sometimes unfortunately called social software, which
is misleading. After all, enterprise collaboration software enables business
productivity and communication. However, a segment of this genre does, indeed,
focus on social networking, albeit on a strictly business basis, and new
products are emerging.

Nowadays, enterprise collaboration software goes far beyond the early
groupware versions and can comprise not only e-mail and calendaring, but also
instant messaging, as well as office productivity tools and collaborative
applications, such as wikis, blogs, widgets, and RSS feeds. Furthermore, today’s
collaboration is not PC-dependent, thanks to the prevalence of smart phones. The ability to have
multiple sources of information all in one place is compelling; witness the
explosion of true social sites.

In addition to traditional team collaboration software such as e-mail and
calendars and the current explosion in the use of social networking, today’s collaboration products generally fall into one of the
categories below:

  • Web Conferencing – As its name suggests, Web conferencing is used to
    conduct live meetings or presentations over the Internet, or, sometimes, over
    another network. Web conferencing has been around for over a decade now, and
    it continues to enjoy acceptance in the workplace. 
  • Instant Messaging – This type of software is a prime example of how
    tools used for social purposes on the Web work their way into the enterprise.
    Now Instant Messaging (IM) is a feature in many leading enterprise
    collaboration tools, including those by IBM/Lotus and Microsoft. These
    Enterprise IM (EIM) systems are generally able to communicate with
    consumer-based IM systems from AOL, MSN, and Yahoo!, plus they provide the
    security of running behind a company’s firewall. Additionally, some vendors,
    such as Symantec, provide IM "hygiene" services to ensure contact
    with public IM systems remains secure.
  • Message Boards – Early message boards were known as Bulletin Board
    Systems (BBSs) and came into being in the early 1980s, where they were started
    by hobbyists and turned into places for socializing or holding discussions. On
    the Web, as technology capabilities increased, they took on the familiar look
    that many share today. Whoever is or becomes a member of a particular message
    board or forum can contribute to, view, or revisit the messages (also called
    "threads" or "posts") in it at any time. These messages
    are usually sorted into discussion categories or topics. Thus, when a key
    person is out of the office, critical information is organized clearly and can
    still be accessed. Like IM, message boards soon became a feature of many
    enterprise collaboration products and most team-oriented systems today include
    this functionality.

  • Blogs –
    These took their name from the term "Web log," which
    started as a method of personal journaling. Their popularity soon took off,
    and once that happened, the business community decided to put this sort of
    technology to use as well. Businesses of all sorts now have blogs that they
    hope will attract customers. Corporate blogging typically consists of two
    levels. Internal blogs are directed at employees and cannot be accessed beyond
    the corporate network. External blogs, however, take the company message
    beyond office workers, allowing customers and others to become readers.
  • Wikis – The word "wiki" comes from the Hawaiian word for
    "quick." Wikis were invented about 10 years ago as a server-based
    application that enables multiple users to make changes to a Web or intranet
    site without having an IT expert’s knowledge of development or design. Wiki
    software is useful for intranet sites that are cooperatively managed by an
    entire project team or department. 

  • RSS Feeds
    – RSS stands for Really Simple Syndication. When users
    subscribe to a feed, they get either a summary of content from an associated
    Web site or the full text, so they can keep up with information from blogs,
    wikis, and portals in an automated and efficient manner.
  • Mashups – A mashup is a Web application that takes
    data from multiple sources and combines it into an integrated tool to create new
    functionality. For example, a mashup could consolidate information from various
    RSS feeds to organize data.
  • Widgets – A widget is a portable piece of code that can be added by a
    user to an existing HTML page without the need to recompile the page. In other
    words, anyone can add a widget to a Web page to create a customized capability,
    such as retrieving real-time flight information. It is also called a gadget,
    plug-in, or snippet.
  • Business Networking – While arguably, many technologies can be (and are)
    used for social networking, not unexpectedly, this phenomenon is moving to the
    enterprise in the form of the successful Jive Software, as well as others.
  • Telepresence – In an effort to make long-distance
    meetings and training sessions more intimate and, therefore, more productive, many enterprises are
    turning from video and/or Web conferencing to a technology called "telepresence."
    Telepresence may be loosely described as a group version of virtual reality,
    more akin to the concept of a Star Trek-style holodeck than any conventional
    video conferencing arrangement.

Although these products differ in functionality, they all offer the following
capabilities to some degree: 

  • Enabling real-time group communications.
  • Allowing several project team members to work simultaneously on the same
    files or documents, thus increasing productivity.
  • Providing context for and ease of use of information.
  • Improving the efficiency of communication and hence collaboration.
  • Making shared data easier to search, organize, and manage.

Technology changes and
shifts in corporate culture are combining to shape the collaboration tools
market, as described in Table 1.

Table 1. Enterprise Collaboration Tools Market Drivers

Corporate Cultural Drivers

 Technology Drivers

Comfort with Web-based Learning
and Communication

Much of today’s
workforce has made personal use of blogs, instant messaging, digital video,
Web-based training tools, and other new communications technologies. The
comfort levels that people subsequently developed with these forms of
communication have set the foundation for the technologies’ introduction
into the business world.

Improvements in Audio/Video

The quality of IP-based
audio and video technology has grown drastically from the days of slow
downloads and choppy streaming. Web-based multimedia is now reliable enough
to be effective for demonstrating products, delivering presentations, and
remotely controlling applications.

Workforce Dispersion

With telecommuters,
traveling workers, and de-centralized corporate facilities, workforces are
increasingly dispersed. As a result, it is often impractical to use
projectors, physical whiteboards, and other technologies that assume all
participants are located in the same room.

Increased Bandwidth to Homes and
Small Offices

Cable and DSL Internet
services have been widely-available and affordable for several years,
enabling telecommuters and workers in small, remote offices to take
advantage of the multimedia offerings that are crucial to collaboration

Resistance to Large-Scale

Implementing large-scale
software such as CRM can be expensive, time-consuming, and fraught with
problems. These issues have made many organizations weary of undertaking
large-scale software implementation projects.

Hosted Solutions/Software as a Service/Cloud

While application
service providers have had difficulty convincing customers to use hosted
versions of enterprise software, the hosted application model has proven
successful in the collaboration software market. The development of
applications that can be rented over the Internet provides collaboration
tool providers with the ability to offer conferencing and other features on
a pay-per use or pay-per minute basis.

Groundswell Movements

reports that employees 30 and younger are the fastest to pioneer and adopt
collaboration technologies and that employees in their 30s and 40s are most
likely to use collaboration applications, both scenarios with or without IT

Improved Security

Although IT departments may have cited security
concerns for not wanting to implement collaboration software, this is not really
an issue any more, with companies often building security into their products to
protect sensitive and confidential company data.

Market Leaders

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The enterprise collaboration software market is evolving steadily, especially
as more technologies and services move into the business area from their start
in the consumer segment. Enterprise collaboration software can boost employee productivity, as well as
help save on travel costs and impact the environment for the better as a result.

Facebook. Workplace by Facebook, formerly known as Facebook at Work,
was introduced in October 2016. At the time of its release, it was already in
use by over one thousand organizations around the world, due to more than a year
of testing. Facebook now says that 30,000 companies worldwide use the software. Built on Facebook’s iconic and popular interface, Workplace put Facebook into a business context.
Workplace is available in two versions: Enterprise, for $3 per active user per
month and Standard, which is free and includes all the features of Enterprise
except for – not surprisingly – a variety of enterprise features and admin
support. The product(s) include integrations with Box, Microsoft,
Dropbox, and Salesforce; the use of bots to read and send messages,
as well as take actions; and compliance partners that include CSDisco, Netskope,
Smarsh, and Skyhigh.

IBM/HCL. IBM’s collaboration software comprises those
which formerly bore the Lotus moniker, including Notes and Domino (long known by the
Lotus name). as well as Sametime and Verse collaboration tools. In 2017 IBM
announced a strategic partnership with HCL Technologies, an Indian multinational
technology company which is a subsidiary of HCL Enterprise. Under terms of the
partnership, HCL Technologies will take over development of Notes, Domino,
Sametime, and Verse, while marketing and sales will remain in IBM’s hands;
product strategy will be shared between the two companies. No formal end to
product support is planned. At the time of that announcement, IBM also announced
that Notes/Domino v.10 will be released some time in 2018 (a beta version has
already been released).

Jive, an Aurea Company/Lithium Technologies. Jive’s
acquistion by Aurea was announced in June 2017. Jive refers to its product line as Social
Business Software, and its functionality includes integrated blogs, wikis,
ranking and voting, user profiles, and other social capabilities. In September
2017 Lithium Technologies acquired Jive-x, an external community
application, leaving Jive with its sole remaining product,
Jive-n, interactive intranet software.

Microsoft. Microsoft Office 365, comprising Exchange Online,
Skype for Business (formerly Lync), SharePoint
Online, and Office Professional Plus, is available as a cloud-based application.
The product allows small businesses through large enterprises access to email,
shared documents, instant messaging, video and Web conferencing, portals, and
more without supporting it in-house. Since the apps are "in the
cloud," it is particularly useful for mobile employees (which, by some
estimates, soon will include more than 60 percent of the workforce). It is priced by
monthly subscriptions ranging from $2 to $27 per user. Microsoft also continues to offer SharePoint Server, which provides a platform
for sharing information and working together in teams, communities, and
people-driven processes. It includes collaborative workspaces, portals, wikis,
blogs, and the ability to create communities so that a company can benefit from
employees’ collective knowledge base. Microsoft SharePoint Server
also offers real-time presence information to maximize communication efficiency.
In 2012 Microsoft acquired Yammer, a private social network; while Yammer is
free to try, Yammer Enterprise is available as part of Office 365 or in plans
ranging from $3 to $8 per user per month.

Salesforce.com. Lauded as the first CRM software in the
cloud, Salesforce.com also offers Quip, a fully integrated collaboration
platform that includes integrated chat, checklists, and project management, as
well as allows users to access it from anywhere, to embed live apps, and to
customize workflows. Salesforce
announced in August 2016 that it acquired what was at that time the cloud-based word processing app Quip,
integrating it into its product line.

Slack Technologies. Slack is a Canadian software company founded in 2009 that offers a cloud-based set of
team collaboration tools and services. Although its product, Slack, wasn’t
released until 2013, it quickly took off and the company became a leader within
only a couple of years – with no salespeople and little advertising. In theory,
the name "Slack" stands for Searchable Log of All Communication and
Knowledge, but in truth, the product name came before the acronym. The product is a
communications platform that allows users to message each other, whether in
groups or one on one, and these are easily searchable later. The company boasts
that over 70,000 paying companies – including 65 companies from the Fortune
100 – use Slack. 

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As the Internet and its promise of Web 2.0 provide greater opportunities for
interaction among the consumer population, those very same technologies are
quickly being reworked for the corporate world in Enterprise 2.0. So far this
has happened with message boards, IM, blogs, wikis, and even social networking.

The Consumerization of Business

There’s no doubt that social technologies are enjoying an
ever-increasing role in business; these include the adoption of mobile devices
(many personally owned by employees) for business purposes, as well as the
increasing use of apps and the cloud (adding security concerns). But the fact is that many of these
technologies (Facebook being a huge example) were created for use in the
consumer segment, rather than the business segment. This trend is frequently
called "consumerization." Research firm Gartner states that due to its
increase, enterprises will need to support more consumer-oriented
platforms, thus reducing the ability to standardize PC and tablet hardware. PCs
will no longer dominate, and Windows will no longer be the single platform used
in an enterprise. Slack, a fairly new product that has taken off in popularity,
is the perfect example of this trend, since it follows the idea that business
applications should be as intuitive and user-friendly as those people enjoy on
their personal time.

Bring Your Own Device 

The consumerization trend doesn’t stop at software. Yankee Group
says that, according to its research, 56 percent of an enterprise’s employees
currently use or would like to use their personally-owned devices, including
smart phones and tablets, for work purposes, and an additional 20 percent would
ignore instructions from their IT department saying not to use their own. This
trend is called Bring Your Own Device (BYOD).

Since today’s workforce uses their own mobile devices more than ever,
forthcoming software applications must work across a range of devices. Data
security is certainly important in such circumstances, but employees’ use of
BYOD means they can join in on collaborative tasks from anywhere.

Conversational Software Robots

Known more commonly as "Bots," these tend to be used in messaging
and chat applications, aiding in the automation of conversations and tasks, such
as meeting scheduling or online payments. Users have conversations with bots in
much the same way they’d converse with real people. Faulkner expects their use
to increase in many types of collaboration software.

Strategic Planning Implications

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Enterprise collaboration solutions most often are chosen by
selecting the features an organization desires or by meeting a set of business
requirements. Analysts agree that the second method is best: find solutions that
meet the needs of the employees by solving specific and ongoing issues.

Adding such technologies to those already existing in
an enterprise has its own issues. One is user productivity: it can decline due
to the learning curve needed for any new technology, and having "one more
place" users need to regularly check can eat up even more of their time.

However, an even larger consideration is the need for companies to
govern the use of technologies in this genre. With no policies on blogs, forums, and social network
use, companies can open the door to a multitude of corporate problems,
and appropriate usage policies are necessary. If enterprise collaboration software is part of an overall corporate strategy
replete with security, then abuse can be minimized. If the technology is going
to be used with or without IT involvement, it is better if IT is the gatekeeper. 

Here are a few questions for potential end users to consider:

  • Will the Enterprise Collaboration software work with software and technology
    already in place, and not as a disparate tool? To optimize effectiveness and
    leverage investments, integration is key for mixing mature and newer
    technologies. Enterprises do not need separate layers of complication, so a
    collaboration bundle may be most appropriate.
  • Does the business have the need to organize a wide range of information in a
    variety of places (e-mail, files, etc.) or across several divisions? Will a
    central repository help manage this information? Will a collaborative
    workspace keep employees, partners, and customers connected and productive and
    accelerate information sharing? If an enterprise has been involved in mergers
    and acquisitions, collaboration software can also help build communication
    channels, provide historical context for information, and capture new
  • Are travel and documentation costs mounting? Can the business benefit from
    reducing travel costs and generating efficiencies? Can real-time collaboration
    on documents improve productivity?
  • Which collaboration software is best for which business objective? Are wikis
    more appropriate for a certain activity or is real-time communication a
    necessity? If so, will IM work better? Or is a more formal, shared workspace
    best? How these questions are answered will help determine the best software
    package to deploy.

For potential vendors, the following should be considered:

  • Focus on messaging that customers understand. Explain the business benefits
    of adapting "social" software. Moreover, target benefits to all
    levels of expertise. The "guru" users might adopt the new technology
    faster, but they may not be the decision makers. Cover all the bases.
  • Be easy to work with in more ways than one. Can application developers
    easily create mashups to solve critical business needs? Will software mesh
    with legacy systems?

As the market saw with the widespread adoption of IM in the workplace,
groundswell activities can drive corporate usage. Therefore, a comprehensive
strategy is necessary for enterprise collaboration software to connect people
and information most effectively. A little strategic forethought will go a long
way in providing guidelines for tools, or in providing the enterprise collaboration tools
themselves, that employees may be using with and without IT
support. Businesses that are adverse to "social" software now may face
the competitive consequences later.

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About the Author

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Rochelle Shaw
is a Web designer and freelance author who has been tracking high technology for
more than 30 years as a writer, editor, and industry analyst. She is a frequent contributor
to Faulkner Information Services.

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