It’s at the end of the night on the dance floor, do brands know where their social software providers are? Like the end of a dance, social software vendors are understanding who they can partner with –or be confident on going it alone.
Once the lights go on in the next few quarters, the ecosystem will emerge in a new day, with brands stuck answering “Do I buy a suite?” or “Do I invest in integration?”. This post is intended to provide illumination on what’s happening behind the scenes –and who dance stars will be.
Above: Here are the options brands have when it comes to integration social software and services, the ideal scenario is upper right, but at this time, this promise is a lofty one.
I first alluded to this metaphor on an interview on Techcrunch, where we saw acquisitions occurring in spring of many of social vendors to create Social Software Suites (see the growing list).
- Consolidation in a Fragmented Market a Sign of Maturity. In prior posts, we’ve found over 100 vendors in community, brand monitoring, and the recent social media management vendor list is upwards of 40. We saw an increase in M&A announcements in spring from Oracle, Salesforce, Google, esp as fall conference season picks up for these software giants. Up and down highway 101 in Silicon Valley, there are business development meetings where there’s shopping, dating, flirting, and discussions around larger companies seeking to acquire more focused startups who’re seeking an exit. Buyers and sellers are all speaking to multiple potential suitors to see who will be a good fit into their Social Software Suite.
- Two Forces: Top Down Suites Offer it All vs Agile Point Provider Community. The largest impacts will be to the buyers, who will have to re-establish their software integration strategy. Will they go for the one-size-fits all vendor that offers all the needed use cases, or focus in on investing on a point provider that can deliver the best experience for the required job. Each offers benefits and draw backs. Vendors who offer the larger suite will tackle at the C-suite level and go down (longer deal sizes, larger scope, with potential larger pie) vs more agile point players that can quickly pivot, innovate, and partner with system integrators to get the job down.
- New Innovation as Ecosystem Reforms, Services Come to Forefront. For specific software innovators that plan to go-it-alone after the lights come on, they can still be very innovative by developing in the next phase of the social web “Performance Social” that focuses on analytics, data driven decision, and automation of these technologies. Furthermore, we continue to see new case studies emerge from social engagement command centers that bring together service and software players, to new mobile and augmented reality platforms spurred by Google. Expect this to be a booming opportunity for system integrators and digital agencies to partner with both sides to craft experiences for brands. The savvy system integrators and digital services providers will offer playbooks, methods, and teams that can integrate at all levels.
The good news is, there’s another dance the next night, as the market continues to grow and evolve –this is just a new session in the continued evolution of the social software space. In 2008 I hosted an event for software vendors (while at my former employer), social networks, and brands to discuss the future of the market, if you think it would be valuable for me to host again (including service providers), please let me know.
Left: The Sacramento delta forms after many tributaries feed into one single water body in Silicon Valley. Similarly, social startups are combining with incumbent software into one suite (Wikipedia)
As an industry analyst, I’ve been waiting to write this post for a few years, it’s fascinating to see the Cambrian Explosion (a prehistoric era where millions of species rapidly emerged on the earth) now turn into consolidated suites, as the ever fragmented Social Business Stack (we found 18 classes of software and service) unmanageable for brands who seek less complexity. Finally, we’re starting to see the combination via partnership, as well as consolidation of platforms emerge.
[A Social Software Suite (SSS) is a consolidated set of social web applications across multiple use cases that share a common user interface and data interchange. The suite enables corporations to manage online relationships and activities with their internal and external customers]
In summary, the state of Social Software Suite (SSS) is immature. The the M&A is just happening across the industry and the integration stories have few proof points or customer case examples, we’re in a stage of infancy for social suites. While we’ve seen many social media proof points, hearing how social integrates into email, advertising, crm, support software, BI, CMS, and beyond is in it’s early stages. Without a doubt, we’re entering another era of the social space.
Consolidation a Natural Evolution, Sign of Maturity
- Integration occurs after a Cambrian Explosion. When I show brands the social business stack of vendors, they often sigh, get frustrated, as they know they’re the ones that must integrate all the pieces together. They seek a common set of vendors to emerge that they don’t have to constantly coach on R&D and integration partners, and are waiting for maturity in products and consolidation so they have to analyze less vendors. Secondly, as social integrates with all other incumbent software, the need for suites to emerge are only underscored.
- High Valuations Forces Biz Dev and M&A. The industry is feeling a domino effect. As a few acquisitions start happening, large software enterprise players know they need to make their bet on the table to get into this game, after initial innovation was done by startup vendors. With IBM, Adobe, Lithium, Salesforce making some of the early plays this has set off an arms race for other vendors to develop their integrated suite.
- Facebooks IPO “Debacle” makes M&A more attractive. With Facebook’s IPO not going as well as financial analysts had hoped with initial valuations, the hopes of these startups to go IPO and succeed like 10 years ago have now shifted to M&A deals, where the exit is combining with a large player. The domino effect causes all investors, boards and executive teams to make their deals and moves before potential windows from suitors dries up. It’s dating season, and everyone wants to mate.
Brands Must Prepare Company, Yet Complexities Not Undone
- Suites are Good for Brands Who Tire of Complexity: Brands are tired of dealing with hundreds of vendors, and having data and logins and systems spread across the space. They seek consolidation from their providers, as doing it themselves in a rapidly changing environment is complex, expensive, and frustrating. Expect brands to line up at the C level to embrace vendors that provide high level dashboards that provide real time reporting on these tools, and enable multiple business units to manage social use cases across the company.
- Suites may Frustrate Brands Who Seek Best In Class: Don’t expect these suites to be a silver bullet to solve the needs of corporations. Point providers can innovate faster, work with an ecosystem of agencies and system integrators and maintain platform agility. M&A doesn’t promise integration will occur smoothly, esp as cultures and platforms are forced to marry in a rapid manner. Expect many pure play vendors to maintain their lead and stand the test of time –without being acquired
- The Future is Integration of Paid, Owned, and Earned: Altimeter’s current research on the integration of Paid, Owned, and Earned (POE) has already found early indicators that brands, and their agency partners are seeking tools that interwork together, and as a result a new team within a corporation will emerge to lead this charge, agency partners will restructure and new software will emerge to make this come to life.
Ongoing List of Enterprise Class Social Software Suite (SSS) Vendors
If you’re like me (who’s full time job is to track this) this is a confusing space to track, as a result, I’ll keep this list updated for a few quarters, till it doesn’t make sense to manage this or it’s time for me to do a formal vendor rating and ranking. Disclosure: Your trust is important to us, as a result, we want to disclose many of these vendors are clients of Altimeter Group. Vendors are listed in alpha order.
|| Ads, Targeting, Analytics, Social Media Management System, Social CMS
|| Adobe was the first to launch a nearly complete suite that spans the entire digital marketing push at their Summit conference. Although mainly marketing, they must bolster into customer support positioning beyond CQ5 this is a strong contender that already has an enterprise marketing footprint via creatives and now with Omniture.
|| Ads (Media), Social integration in .com, analytics
||Bazaarvoice recently acquired top competitor PowerReviews giving them a lock hold over ratings and reviews across the industry. Recently, the announced a media product that extends social ads beyond .com and even beyond FB and Twitter ads. They must expand to engagement software to cover the full span.
||Search marketing suite, social network, applications, social media management system (Wildfire) and analytics
||Google’s strengths in search marketing has started to extend to Google+, although adoption numbers are a fraction of other social networks. Expect that Google Analytics combined with collecting of data from Google+ will impact search results in search engine results pages. Now with Wildfire, they can extend into the Facebook platform, as well as deploy Google ads in multiple locations, as well as tie to Google Analytics.
|| Analytics, Brand Monitoring, Targeting, CRM
|| A strong existing player that acquired Coremetrics, they have a strong background in analytics and intelligence, but need to develop an engagement solution that allows brands to engage in social while aggregating data back to their systems.
|| Communities, Engagement software, brand monitoring
|| Traditionally a community vendor on support use case, they’ve acquired Scout Labs for brand listening and recently announced a white label engagement tool. They must quickly move into the marketing aspect beyond support and launch an advertising platform that converts earned content to paid.
|| Social Media Management System (Vitrue), Social Analytics (Collective Intellect) CRM and now Involver
|| New entrant, they acquired Vitrue for an assumed $300m showing the promise of social data into existing CRM systems a reality. The roll-out isn’t quite clear for roadmap, I look forward to hearing more. (edit: now that they’ve acquired Collective Intellect, the pieces fit together: listening, engagement, analytics.
|| Brand Monitoring, CRM, Data.com, lightweight community products
|| Traditionally strong in sales and support use cases, Salesforce (edit: has purchased) BuddyMedia (who purchased ad platform Brighter Option) that would quickly extend them into a new arena, this fast mover is disruptive and is to watch.
| Whoever Comes Next
|| TBD: I’ll update this as vendors emerge.