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Enterprise Online Community Apps Demand

Consumer social networks are mainstream applications, so people are now demanding similar applications in the workplace that provide personalized online experiences for creating, publishing, locating, and sharing content internally and externally with colleagues, customers, and partners.

If these applications are not provided by an IT organization, IDC observes that employees are bringing them in through their own initiatives. This emerging business need has created a suddenly crowded market of online community software providers aiming to make the business world a more social place.

IDC forecasts that the U.S. online community software market will grow from $278.4 million in 2008 to $1.6 billion in 2013 at a CAGR of 41.8 percent. While the U.S. online community software market was not immune to the recession, dominant vendors in this space reported double-digit growth rates in 2008 and higher-than-expected growth in the first half of 2009.

Overall, the U.S. online community software market doubled in revenue from $135.3 million in 2007 to $278.4 million in 2008 based on the promise of online community software to help organizations deepen relationships with customers and innovate at much faster speeds.

The overall growth rate for U.S. online community software did not meet expectations for 2008 due to the tough economy and drastic cuts in marketing budgets. However, IDC expects a resurgence of growth in 2010 as the economy recovers, more traditional enterprise players enter this market, and methods for measuring return on investment become more standardized.

Still, gaps in adoption will remain based on the failure among some organizations to adjust to these more transparent ways of operating, and some community initiatives will fail due to the lack of understanding about the human capital investments required by the community management model.

"The lesson that technology is only as good as its user will be a hard lesson learned for many companies needing to focus more on community strategy and management than on the technology solution," says Caroline Dangson, IDC research analyst.

Online community software enables new ways of working that require a shift in mindset and culture. IDC finds that traditional corporate culture acts as a major barrier to adoption today, even more so than the economic downturn.

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