Businesses on the hunt for effective collaborative social tools should tread lightly, according to a new Magic Quadrant report from Stamford, Conn.-based Gartner Inc., which revealed the survival-of-the-fittest spirit of today's dynamic social software market.
The report, which analyzed social software for the workplace, noted a shift in the market as enterprise interest in social products continues to climb. Nikos Drakos, one of the report's authors, described a recent spike in sales of software social tools as vendors fight to meet the increasing demands of customers.
Social software applications are modeled after public social outlets and often built upon the Facebook-esque cornerstones of "conversations, profiles and fluidity."
Social software in the enterprise can provide organizations with a user-friendly alternative to collaboration via email systems, which are a less effective means of sharing and preserving information, Drakos said. Today, Drakos finds companies increasingly using social software to promote timely communication, to improve information capture and management capabilities, and to generate more relevant employee metadata, which can be very useful when companies want to share knowledge across business units.
The new Gartner Magic Quadrant for Social Software in the Workplace ranks social software vendors as leaders, challengers, visionaries or niche players based on several metrics, including "completeness of vision" and "ability to execute."
Microsoft, Jive, IBM and Salesforce.com make up this year's leader board. Yammer, the hit enterprise social network provider acquired by Microsoft in June 2012, also tops the list.
Collaboration platform provider Atlassian, which returns to the challengers' quadrant this year, is joined by new challengers VMware and Tibco Software. Telligent, SuccessFactors, Acquia and Cisco are listed as visionaries.
Niche players are abundant in this year's quadrant. OpenText, Saba, Socialtext, Igloo, Novell's Liferay division, Moxie Software, Huddle and BlueKiwi, which was acquired by Atos in April 2012, all round out the quadrant.
A market on the move
Whittling a pool of around 80 social tools down to 20 proved a considerable challenge, according to Drakos, who noted a sizable crop of new sellers surfacing to partake in the enterprise social software frenzy.
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"Every other day, we hear about a new company that is selling 'Facebook for your company,'" Drakos said.
This onslaught of new social offerings means vendors have to step up their game; slapping a few basic social functions, like activity streams and profiles, on a collaboration product just isn't cutting it, Drakos explained. Instead, the Gartner report notes that "sustainable differentiation" is invaluable for both vendor and buyer in this indefinite landscape.
Drakos named "clever" analytics, deep embedment of crucial functions, such as content creation and sharing, and gamification, or "rich" user feedback and catchy activity visuals, as possible points of such distinction.
Other buyer considerations should include usability and visibility, which Drakos deemed "extremely important." He pointed to quadrant newcomers Yammer and Cisco as standouts in this area. Yammer boasts products that users can try before they buy, while Cisco offers "pre-integration with a larger set of capabilities," aligning its WebEx Social offering with other WebEx products.
Jive, a veteran of the leaders' quadrant, is an example of a vendor who has continued to achieve differentiation in the turbulent market, according to Drakos. The company was the first major social software startup to go public with an initial public offering (IPO) in 2011. Drakos noted the transition was handled impressively. Since the IPO, Jive has expanded its presence in data centers, bolstered its service capability, tightened up its architecture and made some choice acquisitions.
Cloud on the horizon?
Microsoft, another longtime leader, may be on rocky ground, though, especially with the industry trending towards cloud computing.
"How cloud will play out [and] how the market will evolve [are] still a big question mark," according to Drakos, who cited a lot of innovative vendor movement in that direction, while Microsoft's attention remains elsewhere.
"Microsoft has hedged [its] bets already with Yammer," Drakos said. He went on to explain that while the software colossus plans on dedicating more resources to the cloud, "they are high on the Magic Quadrant, primarily because of SharePoint, [and] if a lot more companies or buyers begin to prefer cloud, then Microsoft -- or IBM, or other more traditional technologies -- may be more disrupted."
Drakos considered cloud exploration and other fresh moves a saving grace for smaller vendors hoping to make some headway in a market studded with big names and constant acquisitions. It's a market where conventional buyers often "have less appetite to take risks" and opt to purchase social software products from more familiar vendors.
"We think that increasingly in the quadrant, there will be more businesses going to those that have pulled ahead. [There is] already a degree of consolidation and the trend will continue," he said. "But there's still opportunity for smaller companies that identify innovation and different kinds of opportunities. That is how [Salesforce.com] got up there."
That said, the cloud isn't necessarily a safe haven for small vendors. Some giants that didn't make the quadrant cut this year may soon be homing in on the territory, too.
"Google still hasn't shown its cards here," Drakos said. "They will [probably] play a big role moving forward when they get Google Plus ready for enterprise use."