Enterprise Social Networking Space Seeing Consolidation

June 8, 2011 No Comments

By David A. Kelly and Heather Ashton, Upside Research

socialnetworking 2tools Enterprise Social Networking Space Seeing ConsolidationSocial networking tools aren’t just for connecting with friends. Specialized enterprise social network technologies are also starting to be widely used on an enterprise scale, for enterprise needs. Many of them have grass-roots support from departments within a larger company, and some of them are actually sanctioned by and managed by IT across the enterprise. The challenge for companies is to find the tools that are best suited for particular functions and help propagate them in a manageable, sustainable way throughout a department or across an enterprise.

Beneath the surface of the hype surrounding social networking tools is the more interesting shift in how companies do business. The rise of the knowledge worker has dramatically changed the types of technologies that a company needs to empower its employees with. And, equally important, the connection point for interacting with and utilizing this technology has also seen a dramatic shift – away from location-fixed PCs and toward smartphones and mobile devices. The LAN is now being replaced by the Cloud, with its promise of secure, ubiquitous access to all the tools and information a knowledge worker needs to complete their tasks.

One vendor that has been intent upon virtualizing knowledge workers IT environment is VMWare. The company provides cloud computing and virtualization services to help enterprises increase flexibility in their IT infrastructure to respond to market changes and opportunities. Recently, VMWare has been on a buying spree, scooping up application companies that fit with its goal of combining a location-independent infrastructure with enterprise productivity and collaboration tools. In January, the company announced plans to acquire Zimbra™, an open email and calendar collaboration server that bills itself as a “next-generation Microsoft Exchange server.” Then, in April, VMWare announced its intent to acquire SlideRocket™, an online presentation platform with 300,000 users. Both acquisitions were meant to “fill out its web productivity suite.”

Now, VMWare is adding a social networking darling to its web productivity lineup. Socialcast, the brainchild of Timothy Young, founder and CEO, is one of the leading social networking tools for enterprise businesses, with customers that range from Avaya, Nokia, and Philips Electronics. What sets Socialcast apart from the crowded social media playing field is its integration of real-time activity streams into enterprise applications, enabling the power users to improve collaboration without having to leave their chosen application.

With the Socialcast acquisition, VMWare is placing itself squarely in the enterprise social networking and productivity space, adding to it the infrastructure that makes these technologies viable. There is some existing synergy with the two companies – according to Tim Young, approximately 40% of Socialcast’s customers opt for the version that utilizes VMWare’s virtual appliance. VMWare is also a recent customer internally for Socialcast’s tools.

Upside Research sees this acquisition as an interesting turn of events for Socialcast. The company has some of the most innovative social networking tools to date, and we like the Socialcast’s attempt to bring collaboration tools to the user in their familiar environment, rather than forcing them to leave a particular enterprise application to collaborate. One of the biggest disconnects to date we have seen with social networking tools for the enterprise is the extra effort required to maintain and promulgate the collaborations. Socialcast’s approach seeks to mitigate this by making the tools available in ERP, CRM and other enterprise applications.

VMWare is on a trajectory to leverage the increase in adoption of virtualization and cloud computing technologies. Now, it needs to integrate its various acquisitions and really grow from its virtualization heritage to cloud provider dominance. Similarly, Socialcast has been succeeding with its rapid growth and adoption by enterprises interested in seeking new ways to collaborate. The two share a vision of a new collaboration environment for enterprise users. It will be important to see how the integration of the two companies technologies are handled, and whether the resulting union further supports Socialcast’s reputation as a trend-setter in social networking for the enterprise.

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