The past and future of Gartner’s Magic Quadrant for Social Software in the Workplace

Gartner have just released their latest Magic Quadrant for Social Software in the Workplace. I’ve written previously about the limitations of this approach, although there is no doubt analyst reports like this can provide you with a starting point to understand what is currently available on the market.

I was interested to read in their introduction that Gartner believe:

“Competition is growing in the social software market as vendors pursue differentiation strategies and buyers find it harder to tell the vendors’ products apart.”

This some what reflects my point of view – which you can read in this recent post about selecting an enterprise social network – but I would also flag that the rapid release cycle of SaaS platforms is also making it harder for buyers.

Exactly how much has the market changed in recent years? Has it really become more competitive?

Magic Quadrant for Social Software in the Workplace – 2007-2013

Digging through the Gartner’s Magic Quadrant for Social Software in the Workplace since 2007 I was surprised to find that of the 70 companies that have been featured by Gartner over this time (including “Notable Absences”), only 7 of them have appeared every year – they are Microsoft (which now includes Yammer), IBM, Jive Software, Atlassian, OpenText, blueKiwi and Telligent (Zimbra). Socialtext – now part of Peoplefluent – had appeared in the six previous editions, but this year appeared only as a Notable Absence.

The number of vendors included in each annual Magic Quadrant for Social Software in the Workplace peaked at 31 in 2009, but has now settled down to 20 vendors in the last two years. I doubt this reflects the true nature of the market – for example, Alan Lepofsky’s extensive list probably still only reflects the tip of the iceberg. Don’t forget that Yammer didn’t appear on this Magic Quadrant until 2012, and then it was acquired by Microsoft for US$1.2B.

As a result the churn rate of vendors has also been steadily falling, with only 3 vendors being dropped in 2013. In fact, over the last 4 years over half the vendors have remained fairly constant in the quadrant. Beyond the first 8 mentioned above, this includes Huddle, Novell, Liferay, Acquia (Drupal), and Igloo. I would also add Newsgator to this list, who were dropped in 2011 because of their relationship to SharePoint. Newsgator reappeared in the latest edition of this Magic Quadrant.

And what happens to vendors who are dropped from this Magic Quadrant? You might be surprised to learn that the overwhelming majority of these vendors appear to be still around. However, many have changed direction and a small number have been acquired (for example, Cubetree first appeared in 2009, was acquired by SuccessFactors, dropped then reappeared as SAP this year). Some other vendors have also bounced in and out of this Magic Quadrant – for example, Google appeared first in 2009, but was otherwise absent until this year again.

How competitive is the market for Social Software in the Workplace?

Not withstanding the apparent stability of the market in terms of leading vendors, looking at the history of this Magic Quadrant does support Gartner’s claim of growing competition – there is no monopoly or even a duopoly on Social Software in the Workplace. However, differentiation really depends on how you define the sector. Gartner are very transparent about their methodology and how they define the sector:

“[Social Software in the Workplace] are used to support a variety of collaborative activities (that is, they are general purpose)… Products in this market include both applications, which deliver specific functionality out of the box (such as shared workspaces or communities), or platforms, with capabilities that can be used as a basis for contextual collaborative applications. Business use of these products varies in terms of degree of formality and openness”

That’s a pretty broad definition, which explains the diversity in this Magic Quadrant over time, but I’m not sure it points to a differentiation strategies by the vendors themselves.

With that in mind, my observations are that:

  • Internal and external social media are different – Many companies that have been dropped have pivoted into focusing purely on external social media and external-facing online communities (for example, Lithium Technologies appeared once in this Magic Quadrant in 2008). Implementing internal Social Software in the Workplace requires a very different set of capabilities and some vendors just never get the traction to do this well.
  • HR and Learning versus general purpose social software are still to merge – I’m seeing more movement in and out of this quadrant around companies that have a focus on HR and Learning. I’m not convinced that standalone HR and Learning social software can exist alongside general purpose tools in the long term, but its not clear how this space will actually play out. While not evident in this Magic Quadrant right now, I expect we will also see similar issues in the ERP and CRM spaces emerge over time – SAP is already in this Magic Quadrant primarily through SuccessFactors, but what about vendors such as Infor? Again, this highlights the importance of defining who is part of this market.
  • Vendors based outside of North American – Unfortunately Gartner’s methodology means that they tend to be biased towards vendors based in the US – not only does this mean they miss emerging vendors from the Asia Pacific region (e.g. Hexigo) but I also think they need to weight their “Geographic Strategy” criteria higher to differentiate leading vendors that actually have feet on the ground in countries such as Australia (naturally, I’m biased to my region). Local customers should also be wary of new and unproven vendors based overseas that appear in this Magic Quadrant.

I suggest you keep watching Gartner’s Magic Quadrant for Social Software in the Workplace, but pay attention to who isn’t there and certainly don’t entirely write off anyone that gets dropped.

How to access the Magic Quadrant for Social Software in the Workplace

If you want to access the Magic Quadrant for Social Software in the Workplace for 2013, you can download the full report courtesy of Jive Software.

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