Companies have a choice when shopping for enterprise social software. They can buy a pure-play product from a social software specialist, or they can go with one of their traditional IT vendors, who are developing their own social software capabilities and integrating them into their traditional products.
Vendors like IBM and Microsoft will better integrate social applications for specific end-user activities, including content creation, task management and data collection and reporting, said lead author of the social software Magic Quadrant Nikos Drakos, Ph.D., research director of collaboration and social software for Gartner.
Social software Magic Quadrant: Will pure-play vendors struggle?
The leaders of the social software Magic Quadrant, including Microsoft, Salesforce, IBM and Jive, have thrived on building an enterprise customer base and offering social software with broad capabilities.
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While pure-play enterprise social software vendors -- like Jive -- have a strong position in this space now, Drakos said enterprise social software is commoditizing. Large IT vendors that are already selling to enterprises -- like IBM, Microsoft, VMware and Cisco -- will bundle their social tools into unified communications (UC) packages and other enterprise IT products. Social software for the sake of being social won't be good enough for some enterprises anymore.
"The challenge for the pure-play vendors -- like Jive and SocialText -- moving forward, is to find some reasons for enterprises to buy them beyond the straightforward collaboration and social [offerings]," he said.
The best-of-breed approach for enterprise social software, however, still appeals to many enterprises who have bought into the pure-play vendors, said Henry Dewing, principal analyst at Cambridge, Mass.-based Forrester Research Inc.
"The notion that pure-play social software will be short lived is short sighted," he said. "At the end of the day, it's not about the vendor or the tool. It's about the business process it supports and how well the information worker understands and uses it."
Enterprise social software: Niche players could survive as 'specialists'
While larger IT and UC vendors may have larger professional services and customer support organizations, not every company will be looking for bundled social software technology.
The Magic Quadrant identifies many niche players -- such as Igloo Software, Saba and Socialtext -- that have created strong products that don't try to overextend their capabilities, noted Rob Arnold, senior industry analyst at San Antonio-based Frost & Sullivan Inc.
"[The niche player quadrant] is a good place to be," he said. "These vendors have a strong point application that fulfills a need, rather than a full suite that tries to address many needs."
Some companies will find that pure enterprise social software vendors will specialize in vertical industries. "Some of these vendors could have really good integration in the medical field -- like deep integration with electronic medical records [EMRs] -- or within computer-aided design [CAD] software for construction," Arnold said.
Point solutions can be very effective, and despite larger vendors grabbing more market attention than smaller, niche social software vendors, it is likely for some pure-play vendors to carve out a more permanent space in the evolving market -- like Liferay, a free and open source enterprise portal for collaboration and niche player this year, Gartner's Drakos noted.
"If you want to remain a pure-play or niche social software vendor, you have to be the best, and keep finding new innovations to make your product richer, with deeper integrations and better usability, or you have to bundle the offering -- horizontally or vertically," Drakos said.
Time is ripe for acquisitions in enterprise social software market
There is still room for more pure-play social software vendors to appear and for more innovation around collaborative platforms that can unify the right groups of users for a project within an enterprise, Forrester's Dewing said.
"Vendors should be looking at what enterprise problems are, and building this social layer to provide [users] with the correct tools to do things more effectively," he said.
Enterprises should also expect some mergers and acquisitions in the social software market -- like Microsoft's acquisition of Yammer and VMware's acquisition of Socialcast, an enterprise social networking and collaboration platform.
"You will see a very active acquisition and merger environment in this market," Drakos said. "It's a great time for new [social] tools from new combinations of vendors and offerings."