Demand for enterprise social software will grow strongly in the coming years, as more organizations implement the products to improve collaboration and communication primarily among employees, but also with customers, according to analyst house IDC.
Between 2011 and 2016, IDC expects the compound annual growth rate in spending to hit 42.4 percent for this type of product, also commonly referred to as "enterprise social collaboration" and "enterprise social networking" software.
"We're seeing good strong growth from the major players in this market and that'll continue for quite a while," said Michael Fauscette, lead author of two IDC reports out this week about enterprise social software.
Customers spent $767.4 million (£493.5 million) on the products globally in 2011, and will spend almost $4.5 billion (£2.9 billion) in 2016, according to IDC's "Worldwide Enterprise Social Software 2012-2016 Forecast."
Enterprise social software adapts Facebook-like and Twitter-like features for workplace use, including employee profiles, activity streams, microblogging, discussion forums, wikis, and content tagging, rating and reviewing.
Because of their potential for sharpening employee communication they're becoming important tools for "decision support" and productivity across most industry verticals, according to Fauscette.
Among the growth drivers are a push to add social collaboration capabilities to other enterprise applications, and demand from employees for software that resembles the consumer applications they use outside work.
Some factors will work to slow down the momentum, however, including concerns about return-on-investment, security, regulatory compliance and intellectual property protection, as well as the involvement needed from IT departments to deploy and integrate the software, according to IDC.
In a different study, "Worldwide Enterprise Social Software 2011 Vendor Shares," IDC ranked vendors by their 2011 revenue. The list was led by IBM with $105.4 million, followed by Jive Software ($65.3 million), Communispace ($60 million), Telligent ($42.7 million) and Socialtext ($34.5 million). Rounding out the top 10 were Mzinga, Lithium, Yammer, NewsGator and VMware.
In a sign of the growing importance of this type of software, Microsoft is in talks to acquire Yammer for about US$1 billion, according to a Bloomberg article last week. Microsoft, which lags in this area, could instantly boost the social features in its collaboration products, particularly SharePoint, if it bought Yammer.
Google officials have also been saying for months that they are developing a workplace version of the company's Google+ social networking site, which could give Google Apps an enterprise social component it currently lacks.
In addition to the vendors that specialize in this software, large software vendors, including Oracle and Salesforce.com, are also adding enterprise social features to their enterprise application stacks.
(IDC is owned by International Data Group, the parent company of ComputerwrorldUK.com)