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The Upside Potential for Enterprise Social Networks

The time has come to think seriously about enterprise social networking and consider its role within the commercial online collaboration strategy development process, according to the latest market study by Ovum.

In a new report, they say that the enterprise social networking market is starting to mature and is now moving from the introduction phase into the growth phase.

Strategic acquisitions have already been made by start-ups and establish vendors alike. That being said, I'm still left wondering -- are there examples of substantive applications that make the resource investment worthwhile?

"Ovum's current assessment of the enterprise social networking market indicates that Jive and Yammer are the two vendors that organizations are most eager to compare and contrast, but other vendors are generating significant business and revenues from their offerings," said Richard Edwards, analyst at Ovum.

A recent vendor recap suggests that IBM Connections produced $105.4 million in revenue during 2011, and from this performance Ovum believes that the current value of the overall enterprise social networking market to be in excess of $500 million.

Enterprise social networking, from a market perspective, is still in the early-adopter phase, with only around 10 percent of organizations in established IT markets deploying solutions or subscribing to services.

Mobile devices are increasingly being used to access the networks and this is extending the use case for such solutions to a broader audience. New smartphone and media tablet apps will likely help to increase user adoption.

Edwards adds, "As the business case for investment in enterprise social networking solutions has yet to be proven to business skeptics, some vendors are encouraging independent user adoption -- in the hope it will prove business value."

Ovum believes that the commercial potential offered by enterprise social networking will only be unlocked when meaningful necessity dictates a change in mainstream legacy business practices.

Meanwhile, the enterprise collaboration technology landscape has been flooded with "social software" from a variety of different sources. In fact, vendors offering pure-play enterprise social networking solutions are competing against established enterprise collaboration providers.

On the other hand, vendors offering business automation social platforms are trying to gain traction in a market that is also assessing the merits of emerging offerings from companies specializing in enterprise applications.

Ovum says that merger and acquisition activity has increased markedly in the past few months, and this has led to new entrants appearing on the enterprise collaboration landscape.

So, with an upside market potential of at least $10 billion, the enterprise social networking market may become the new battleground for all enterprise collaboration vendors. We'll have to wait and see.

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