TripleTree Collaboration


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TripleTree Collaboration

  3. 3. EXECUTIVE SUMMARY – The 80/20 Rule Enterprise collaboration solutions are in the midst of nearly chaotic innovation. The popularity of social networks is forcing co-workers to use consumer-like tools such as those shown in Figure 1 to stay connected with peers, clients, partners and friends outside the purview of IT. Economic pressures have businesses focused on doing more with less, forcing corporate marketing departments to innovate the way their employees and other constituents search for, create, target, and personalize content and media. Figure 1: Social Network Tools “TripleTree’s over-arching IM chat email self service tools message to aspiring or “next social generation” application networks presence events blogs publishing providers is clear: if you are wikis SMS tags micro-blogs not engineering collaborative capabilities into your solution, podcasts RSS forums user contributed content video you are telling the world you have decided to remain a legacy Adding to the complexity and market confusion is that much of the day-to-day application vendor.” information sought by today’s knowledge workers exists outside of corporate IT firewalls. “Googling it” is a knee-jerk reaction for almost every query and users are emboldened at addressing business needs with tools and solutions that do not – TripleTree involve corporate IT. This behavior brings transparency to the workplace and shows how consumerism is influencing the growth of collaboration solutions. These influences include design, adoption, and usage patterns modeled after sites like eBay, Amazon and Yahoo, the likes of which most traditional enterprise applications have never seen. With collaboration solutions virally spreading into businesses of all sizes, some are concerned that best practices are seldom addressed, data is not uniformly indexed, and content is not always shared. Amid these considerations, even the casual industry observer may call into question how legacy applications like email and web conferencing will look in five years. This is accentuated as internal and external workgroups and their activities are tied in new ways and with new business models. It is notable that some of the best examples of sector leadership in collaboration are not originating from leaders like IBM and Microsoft, but rather from emerging vendors who are disrupting the market with point solutions. It is through these emerging vendors that users are finding approachable, flexible and relevant solutions to address needs at the individual, project, department, or organizational level. PAGE 2 Q1 2009 COLLABORATION MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREE.COM
  4. 4. The turf battles facing IBM and Microsoft are familiar – confronting marketing messages and solutions from agile, niche vendors with the counter-punch of “standards-based platforms”. Further, these niche solutions are not being sold to CIOs but to business unit executives, happy to apply operational budget dollars for much needed productivity solutions. In their fight to maintain relevance, global vendors have hurriedly incorporated new capabilities into their product mix to address new buyer attitudes and competitive realities. TripleTree has “A combination of macro-market segmented the collaboration landscape into three categories: trends are making it imperative that organizations of all sizes re- 1. Traditional Enterprise Vendors: Global application vendors who are incorporating collaboration constructs into their solutions to improve user evaluate how they encourage and adoption, worker productivity, and communication. manage collaboration internally and 2. IT Infrastructure Vendors: Traditional hardware vendors who are jockeying externally. These trends include: to provide collaboration features as a way to differentiate their offerings and avoid commoditization. • Competitive forces 3. Specialist Vendors: Regardless of size or brand recognition, firms like • Workplace requirements Facebook, Twitter, and 99Designs are gaining acceptance as meaningful business solutions because crowd sourcing and the power of each person’s • Economic and ecological social graph is becoming better understood. Unfortunately, these specialists conditions have created market fragmentation and consternation for CIOs who are • Enabling technologies trying to get their arms around “outside the firewall” solutions. As both business executives and CIOs seek an open, simplistic, unified and Globalization and eCommerce compliant approach to enterprise collaboration platforms, TripleTree has analyzed have fundamentally changed the the market forces influencing vendor best practices and user needs. competitive landscape, leveling the • For vendor CEOs, collaboration functionality is critical to long-term growth playing field while lowering the and the ability to offer connectivity to an application platform. barriers to entry in nearly every • For investors, enterprise-wide capabilities will have a better strategic value than point solutions. industry. While these trends have • For vendor marketers, business over consumer applicability will garner the opened new market opportunities, highest average selling price. they have also opened the door to As an investment bank, TripleTree is concerned that users may become numb to more competition, undercutting real collaboration solutions. Daily information flow is huge, too many options customer loyalty, and complicating exist for information access, and standards are not prevalent. All realities lead to traditional methods of gaining a the likelihood that content is not being well received, much less understood. competitive advantage.” To that end, TripleTree predicts considerable vendor consolidation over the next several quarters as best-in-class collaboration platforms quickly mature. Thus, - Jeff Kaplan, TripleTree’s over-arching message to “next generation” application providers is clear: if you are not engineering collaborative capabilities into your solution, you Managing Director, are telling the world you have decided to remain a legacy application vendor. THINKstrategies WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 Q1 2009 COLLABORATION PAGE 3
  5. 5. GROWTH DESPITE FRAGMENTATION Collaboration has finally attained its long awaited spike in market interest as evidenced by its #2 ranking in Ziff Davis and CIO Magazine’s 2008 Top Trends “Collaboration as a niche Survey. While email and shared calendars have been considered corporate standards for more than a decade, only recently have web conferencing and solution will not be a compelling instant messaging (IM) worked their way into mainstream enterprise applications. long-term value creator for most Now, we’re faced with a renewed level of hype around companies like Skype, businesses. Rather, integrating LinkedIn, and dozens of other “dot-com” sounding solutions. collaborative capabilities within TripleTree believes collaboration as a niche solution will not be a compelling enterprise applications such long-term value creator for most businesses. Rather, integrating collaborative that they support and improve capabilities within enterprise applications such that they support and improve business workflows will emerge as the best way to address the surge in demand. business workflows will emerge as the best way to address the Other factors include: surge in demand.” • A desire to enhance the cost-effectiveness of communications with customers, – TripleTree partners, investors, and employees. • An increased willingness for businesses to invest in customer-centricity. • An increased productivity from corporations seeking continuous technology improvement. • A dispersed and increasingly global workforce. • The maturation of web standards and some rationalization around Web 2.0 technologies. • The mainstream adoption of Cloud Computing. Web Meeting and Conferencing Solutions It is difficult to define collaboration narrowly and vendor messaging has not CISCO/WEBEX offered useful clarity. Because collaboration functions link to, and overlap with, Using WebEx as a foundation, Cisco has created a Collaborative Software division. This move features found in ERP-like applications (e.g. financial, human resources, CRM, and other public statements from Cisco indicate and retail), TripleTree has attempted to define collaboration across a continuum that collaboration underpins a large component of solutions encompassing traditional communication mediums – such as telephony, of the Company’s unified communications focus (social networking may have a role too with much email, and shared calendars, and web-centric mediums – such as hosting, blogs, smaller deals in Five Across and We wikis, mash-ups, widgets, RSS feeds, and social networking. expect additional moves form Cisco in SaaS-based enterprise collaboration, especially moves that can leverage WebEx’s multi-million subscriber base and As shown in Figure 2, TripleTree has separated the functional areas of MediaTone network. Collaboration into two spheres of influence: 1. Internal (within the enterprise) 2. External (outside the enterprise) This distinction has been drawn because the environment for which an application is designed has profound effects on workflow sophistication, policy enforcement, level of standardization, and the ability to integrate with other enterprise systems. These functional areas are shown as micro-disciplines within our proprietary Q-Diagram, consistent with other TripleTree market definitions. PAGE 4 Q1 2009 COLLABORATION MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREE.COM
  6. 6. Figure 2: Collaboration Q-Diagram Near-Field Mobile Mobile Community Social Network Digital Asset Multichannel Management Sales Advertising Intelligence Analytics/Search Commerce Tools Business Intelligence (BI) (DAM) External and Reviews mPromotions Online Business Optimization mCommerce Audience Analysis Sales Web Chat Customer Interaction Hub Targeting & Segmentation Podcasts Enterprise Feedback Management (EFM) Dashboards and Reports Dialogue Management Sales & Business Portals Audio Mining/Speech Analytics Marketing Performance Shared Office Tools Web Self Service & Presence Enablement Management Virtual Service Agent Shared Productivity Tools Customer Service Online Communities Customer Communication as a Service Web Chat and IM Experience Single Sign-On (SSO) Mobile Applications Management Identity Management Social Bookmarks Folksonomies Integration as a Service Metadata/ Data Federation Really Simple Syndication (RSS) Feeds Social Enablement Mashups Micro-blogs Networking Technologies Application Virtualization Simple Message Syndication (SMS) Unified Communications Enterprise Social Networking Web/Mobile Video Episodic Communities Workflow & Processes Electronic Meeting Environments Wikis Blogs Improvement Data Conferencing Internal Video Conferencing Web Publishing Telepresence Internet Forums Mobile Telepresence Collaboration Workspace Mobile Application Project Portfolio Management (PPM) Email Enterprise Sharing Web Content Management Persuasive Enterprise Instant (WCM) Group Web Content Widgets Wireless Messaging Calendars Conferencing Management Email (IM) Source: TripleTree, LLC While this attempt at mapping such a wide array of internal and external collaboration tools across a continuum may not be perfect, it goes beyond grid style rankings by acknowledging the roles of “collaborators” from both inside and outside the enterprise and by identifying specific, supporting technologies. As stated earlier, vendor messaging defining the collaboration market landscape has been somewhat inconsistent and is influenced by: • The challenges of defining collaboration boundaries. • Definitions around emerging themes such as teaming, document sharing, coordinated workflow, and online interactions. • Marketing hype emanating from global firms such as Microsoft,, and IBM. • Identifying “pure play” collaboration vendors as opposed to those offering collaboration functionality as part of a suite. WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 Q1 2009 COLLABORATION PAGE 5
  7. 7. To further illustrate the scope of fragmentation across the collaboration market, broad market sizing estimates should be considered. Below we have mirrored the Q-Diagram shown in Figure 2 with market sizing estimates for over a dozen collaboration categories. Figure 3: Fragmentation & Market Sizing Digital Asset Web Analytics Management Podcasting Customer $350M $1B Telepresence Self Service $50M $200M Hub $150M RSS $250M $150M Mashups Social Networking $500M $2.3B Wikis $200M $75M Web Conferencing Widgets $1.0B $250M $3.2B Blogs Web Content Management Content Management (Records/Document Management) Source: TripleTree, LLC “Twenty years ago…80% of the knowledge that workers required to do their jobs resided within their company. Now it is only 20% because the world is changing ever faster. We need to be open to new and unknown connections with people and content…” - Andy Mulholland, Chief Technologist, Capgemini, as quoted in The Economist PAGE 6 Q1 2009 COLLABORATION MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREE.COM
  8. 8. INTERNAL COLLABORATION REDUCING FRICTION ALONG THE CONTINUUM Internal collaboration tools are engineered to reduce friction between business processes that occur predominantly within the enterprise firewall. Thus they are more standardized, more deliberate, and serve better defined user roles. Such tools have long been a focus for global technology vendors, and although incremental improvements have been made, most solutions remain inflexible, architecturally complex, and require considerable IT support. They also have origins in content management that lack key user-centric technical features. Though users of internal applications benefit from increased security, speed, and more robust functionality, disadvantages have included high up front license costs, high friction interfaces with other applications, slow deployment, and costly maintenance. “Of all the tools we use in the modern office, few are the double- Email is by far the most widely used collaboration application and has been categorized as “internal” given its predominant deployment behind the firewall. edged sword that e-mail has become. Email has contributed immensely to enterprise productivity and other internal Once a method for quick and collaboration applications could do well by mimicking its positive attributes. easy communication, e-mail has They include: evolved into a time-consuming (but • Omnipresent: Accessible anywhere through wired or wireless networks necessary) evil in today’s workplace. • Intuitive: Requires little training In fact, the average user spends over • Standardized: Offers a homogeneous environment for a large user community 30% of his day creating, organizing, • Role-based: Builds around standard behaviors reading and responding to • Purpose-built: Serves discreet roles e-mail. • Document-centric: Provides a single interface to accomplish several tasks (communicating, calendaring, managing) But it’s not just overflowing inboxes Despite clear benefits, email also faces limitations as a stand-alone tool and is that vex today’s knowledge worker. seldom the best collaboration application for business functions such as: Blogs and RSS feeds keep users • Managing document workflow constantly connected to the world • Serving as a content repository at large. Social groups such as • Facilitating team-based communications • Optimizing advanced messaging and shared calendaring. Facebook and LinkedIn keep users continually networking. Then Unfortunately, many knowledge workers over-rely on email systems to fulfill these there’s the actual work you have to functions and when system availability is encumbered, productivity declines dramatically. Better communication solutions are available, and in the interest do. In fact, on average, you start of productivity gains, TripleTree predicts that by 2010 vendors offering real-time doing something new every three collaboration and communication features (email) with asynchronous content minutes.” management will begin to see increased adoption. SOURCE: WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 Q1 2009 COLLABORATION PAGE 7
  9. 9. TripleTree’s Q-Diagram (page 5) defines internal collaboration tools by three categories: • Business Performance Management EXTERNAL • Enablement Technologies Business Performance Management • Workflow & Process Improvement Enablement Technologies BUSINESS PERFORMANCE MANAGEMENT Workflow & Process Improvement INTERNAL The ability to mine information to derive specific answers is an important component of most any business performance management initiative. From content rich interactions to specific business applications, collaborative tools, shared dashboards, interaction analytics, and community intelligence can ease the exchange of information as well as capture business intelligence (BI) that supports improved organizational efficiency. Vendors are creating solutions to extract meaning out of these everyday interactions and when cycled through BI and analytical tools, the data gathered can translate into actionable business process improvements. ENABLEMENT TECHNOLOGIES The multiple form factors for communications in the digital workplace call for flexible approaches to supporting knowledge users through: • Creating innovative ways to manage the formal and informal interactions happening via chat, forums, blogs and communities. • Embracing collaborative interactions as essential sources of new ideas and best practices. • Capturing and managing the resulting unstructured data. WORKFLOW & PROCESS IMPROVEMENT Workers are becoming more “distributed” and as a result, teams are being forced to interact remotely. Thus, the reliance on collaboration tools to link these individuals with each other as well as bringing “episodic” or temporary members into the fold is strong. Many distributed teams have members who may never speak or meet in person, but through the support of virtual meetings, cost- effective processes are created for reduced team friction and thereby supports a Consumer Productivity Tool broader range of participation. APPLE iWork ’09 is Apple’s new version of its home desktop productivity solution and is an attempt to gain a foothold in the Microsoft dominated productivity solutions arena. With iWork, Apple is messaging away from strictly desktop based productivity applications without making a full commitment to web-based solutions. PAGE 8 Q1 2009 COLLABORATION MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREE.COM
  10. 10. EXTERNAL COLLABORATION Just as enterprises utilize collaboration technologies internally, the need to improve workflows, reduce costs, and speed communication externally is also a high priority. Many view external collaboration as a two-way street. For marketing executives, it is becoming apparent that to effectively win in the marketplace, “...vendors will need to find better customers need power. Acknowledging this bi-directional conversation by ways to monetize solutions as the deploying collaborative tools can augment an organization’s ability to listen, luster of market buzz wears off and assess, and effectively respond to requests, ideas, feedback, and complaints. gives way to investor scrutiny around business model viability and potential For most executives, this bi-directional conversation goes deeper than simply growth.” communicating with customers. It helps by enhancing product support, sharing information in a personalized way with broad constituencies, supporting – TripleTree commerce, and tapping into alumni (e.g. former employees, and retirees). At its core, external collaboration tools should help a business improve its understanding of its most important markets. Most external collaboration tools are engineered to reduce business process friction and enhance communication outside of an IT firewall. This definition considers the effects of how these solutions are delivered, what functions they offer and how they interoperate. Identifying one standard upon another in order to communicate is impractical if not impossible. Thus, we have identified a EXTERNAL Sales & Marketing few attributes toward which leading external collaboration solutions will aspire. Enablement Customer Experience They should be: Management Social Networking • Purposeful: Generic versus purpose-built application functionality INTERNAL • Open: Web-based architectural design that is workflow or document-centric • Self-sufficient: A customer support process requiring minimal human intervention TripleTree’s Q-Diagram (page 5) defines external collaboration tools by three categories: • Social Networking • Customer Experience Management • Sales & Marketing Enablement Search Ranking Tool GOOGLE SearchWiki is a new feature that allows Google users SOCIAL NETWORKING to rank, reorder, remove and add notes to search results. Customizable rankings and other features Perhaps the most hyped technology trend in recent years, the popularity of social will only affect an individual user’s search results networking tools has grown virally and is driven by users who want simple user but soon users will be able to view the notes and interfaces, easy access to others and constant connectivity. Considering that the rankings of other users. SearchWiki encourages users to interact with Google’s search engine and roots of social networking are outside the enterprise, TripleTree expects to see give feedback to improve search relevancy. Google increased security and user rights controls develop before these tools move inside will use this information to further optimize its the IT firewall. During this maturation, vendors will need to find better ways to search algorithms and better cater to the demands of its users. monetize solutions as the luster of market buzz wears off and gives way to investor scrutiny around business model viability and potential growth. WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 Q1 2009 COLLABORATION PAGE 9
  11. 11. CUSTOMER EXPERIENCE MANAGEMENT Knowledge transfer within today’s organizations to a customer base has been Digital Media Platform VMIX MEDIA liberated by the concepts and tools promoted by Web 2.0. Traditional product VMIX provides a collaborative web-based video research and feedback from field sales interactions have limitations and cannot platform to help businesses build a stronger online offer the 360 degree perspective featured by leading edge communication presence and customer loyalty. By using video and other digital content to enhance user experience on strategies and automated tools. Amazon was an early leader in showing businesses a website, VMIX establishes a deeper connection how to capture and assess real-time feedback that empowered its marketing, between enterprises, publishers, broadcasters and merchandising strategy, and product engineering teams to immediately tweak their respective audiences. productivity, quality and customer service. SALES & MARKETING ENABLEMENT Social Media Analytics New collaboration technologies help vendors build or enhance brand loyalty ANDIAMO SYSTEMS and create demand for products and services. Today’s “Generation Y” knowledge Andiamo Systems delivers a SaaS-based “Word workers have grown up with Google, YouTube, and the Apple iPhone and can’t of Mouth” brand management application. By synthesizing user-generated content from a wide imagine a world before text messaging. Their appreciation for building personal range of social media such as blogs, forums, and relationships via a social graph represents a unique opportunity for marketing social networks, Andiamo allows businesses to assess teams tasked with extending brand loyalty and identifying new trends. Social user sentiment regarding their brand. By leveraging this real-time collective intelligence, marketers networking for marketers includes initiatives like community marketing and can take a more proactive approach to managing group chat, both impacting how a brand can be positioned and how demand customer opinions. can be measured and influenced. The most effective collaboration vendors now realize they must cater to both marketing (who has a pulse on the market) and IT (who can harness the technology to meet these needs) seamlessly. “The most effective collaboration vendors now realize they must cater to both marketing (who has a pulse on the market) and IT (who can harness the technology to meet these needs) seamlessly.” – TripleTree PAGE 10 Q1 2009 COLLABORATION MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREE.COM
  12. 12. COLLABORATION PLATFORMS Collaboration technologies have a far reaching impact across functional enterprise domains as application platforms mature. • Compliance: In order for enterprises to meet increasingly stringent regulatory mandates, constituents at each level of the enterprise must participate in the compliance process. Collaboration technologies, in turn, encourage good governance by ensuring an enterprise-wide consensus and by matching business value to risk as collaboration policies are published. • Content: Collaboration is at the core of capturing and streamlining user input (content). This content can range from product ratings and opinions, to FAQs, user lists, blogs and bookmarks. A growing trend includes user- generated news sources and user-generated media. • CRM: Via published opinion and analysis in 2007, TripleTree identified where application tools centered on sales, marketing or service needed a centralized focus toward a “marketing and customer system of record.” Recent announcements from ( for Facebook), Microsoft (Azure) and Oracle (SocialCRM) are examples of social approaches for CRM platforms. They are trying to address how linking constituents can capture and assess the meaningful data emanating from customer service interactions in a move toward that vision. Other examples of CRM / Collaboration tools include: - Web Chat and IM - Web Self Service and Presence - Virtual Service Agent - Community Intelligence - Episodic Communities • eCommerce: As the web has evolved, online commerce platforms have featured numerous collaborative features. The long tail impact of eCommerce solutions includes consumer based merchandising features like tags, reviews and product categorization. • Human Capital Optimization: Outsourcing, off-shoring and near-shoring continue to shape how organizations work. As teams become more distributed and labeled as virtual, team members who may never speak or meet in person have become reliant on automated, collaborative tools. The collective intelligence in these solutions is fed by the contributions of many individuals, who in turn can rank peers, check quality, and stay motivated to uphold their “online” reputation. WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 Q1 2009 COLLABORATION PAGE 11
  13. 13. mMarketing • Mobile: Many estimates cite that there are over four billion mobile phones SAEPIO TECHNOLOGIES in use today. Collaboration tools ranging from simple instant messaging to Saepio provides a mobile marketing solution as part more advanced applications are growing at an equally fast pace. Application of a broader suite of automated marketing tools that innovation from mobile network and handset vendors is cutting edge, and allows B2C retailers like Starbucks to communicate with customers and individuals within a geographic will soon broaden the reach of application functionality. location. Its solution uses GPS to determine the location of an individual (who has requested the - mBanking: Micro-applications will foster an interactive service) and pushes a digital coupon to the customers customer service experience for the financial services mobile device, which is redeemable at the specified provider and bring convenience for users. Starbucks location through a quick scan of the phone at the point of sale. - mMarketing: As total spending on mobile marketing, messaging and collaboration solutions is estimated to grow from $800M in 2008 to $2B in 2012, promotional content is being pushed to drive mobile commerce. Figure 4: Collaboration Touches Many Enterprise Domains Compliance Content CRM • Regulatory Mandates • Tags • Sales, marketing and • Content • Localization service oriented content • Business Risk • Education including interactive • Information Security • User-Generated video, audio and chat eCommerce Mobile HR Optimization • Online Stores • Mobile Feedback • Virtual Teams • Product Reviews • Mobile Communities • Automated & • Multi-Channel • Mobile Offers and Collaborative Tools Commerce Promotions • Collective Intelligence • Cross-Selling • Mobile Search Source: TripleTree, LLC In addition to mobile delivery models, the influence of Software as a Service (SaaS or On Demand) on Collaboration and communities is profound. A number of seminal events characterize this impact including M&A (as shown in the Appendix) and the growth of SaaS Platforms and Cloud Computing. PAGE 12 Q1 2009 COLLABORATION MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREE.COM
  14. 14. USERS PREFER LESS FRAGMENTED APPROACHES The common theme evident throughout the industry is that enterprise users will not be able to sustain hundreds of disparate point solutions and functionality. Application Integration From database technology to ERP systems and everything in between, more BOOMI functionality from fewer vendors will obviate cumbersome integration cycles, in Boomi delivers on-demand integration of business turn facilitating a higher rate of adoption and a richer collaborative environment. applications. Atmosphere, its new solution, is an open platform that allows ISVs and developers The landscape of today’s emerging vendors will change as end-users ignore to embed integration architecture into their specialized, niche applications and CIOs defer to a short list of vendors offering applications to connect and collaborate with a platform solutions. growing network of interconnected SaaS, PaaS, on- premise, and cloud computing environments using an intuitive self-service model. In some respects this is already underway as global firms who are accustomed to sector leadership move to expand their influence beyond their core strengths. A few examples include: • IBM marketing Lotus beyond messaging solutions and under its Bluehouse initiative, integrating a richer application set that includes web conferencing, Collaboration Application Platform instant messaging, content management, social networking, and web IBM BLUEHOUSE Through Bluehouse, IBM has developed a suite commerce. of integrated Web 2.0 tools, hoping to provide a Facebook-like environment where knowledge • Microsoft shifting its collaboration focus from Exchange to SharePoint workers can create content and interact in a secure, trusted location. Offered under the Lotus brand, and incorporating a number of features including content management and Bluehouse’s toolsets include unified communication, workflow, messaging, social media, Web 2.0 constructs, and search. content management, social computing, messaging and collaboration, and situational applications and integration. By taking more of a platform approach, • Social networking tools such as Twitter and websites like Facebook Bluehouse aims to allow people to transcend internal/ experiencing huge growth in site traffic as users begin to appreciate the power external boundaries, simplifying the collaboration of their social graph. These range from business connections and associated process. relationships of peers to personal relationships and communities. • Cisco is leveraging its strong web conferencing position to gain marketshare in productivity applications and will swiftly move into the on-demand media management space. Enterprise Productivity Applications • Other vendors seeking to gain a foothold on the growth of collaboration MICROSOFT SHAREPOINT solutions, including traditional software leaders like Oracle and SAP, who As the most widely used enterprise collaboration suites in the marketplace, a central driver of the are engineering their visions and capabilities for collaboration into very SharePoint adoption is its ability to seamlessly broad platforms. deliver pre-integrated BI, collaboration, and enterprise content management functionality to Microsoft Office users. In addition to its productivity Successful collaboration platforms will be driven not by technology and features, application tools, a core value proposition of but by the ability to transform the way businesses approach teamwork and leverage Microsoft SharePoint Server 2007 (MOSS 2007) is technology for user empowerment. Today, enterprises can pick from an array of its middleware component, which provides a custom best-in-class, feature-rich collaboration tools or select a comprehensive platform application development environment for both professional developers and everyday business users. solution. However, if the cultural mindset of an organization is not sufficient to foster adoption, creativity, sharing and teaming, the best automated approach will provide little value and will likely fail. The success of collaboration suites is contingent on their ability to bring about widespread user process improvement and cultural shifts and not necessarily on the robustness of their technology offering. WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 Q1 2009 COLLABORATION PAGE 13
  15. 15. THE POWERFUL DIFFERENTIATION OF COMMUNITIES “Since the goal of enterprise From a definitional standpoint, a community or social network is a group of collaboration solutions is to facilitate people joined together with a common interest. When related to a collaboration application, strategic value is limited by the richness of its community. How can and empower interactions, the an enterprise make its communities stand out, capture the right audience, and success of any social networking drive value to its members? On the surface, it may be as simple as providing as feature can be measured by the much value to the community as one hopes to see in return. active participation of its users.” Such applications and communities might focus on: – TripleTree - Alumni - Employment - Analysts - Gender - Anonymous Parties - Geography - Associations - Partnership - Competitors - Prospects - Customers - Teams Since the goal of enterprise collaboration solutions is to facilitate and empower interactions, the success of any social networking feature can be measured by the active participation of its users. For example, in an employee-centric social network, it may be more effective to support voluntary participation by fostering an open, secure, useful and trusted workspace in which to share ideas. Communities can be a rich resource for internal business groups and attracting new community members from outside an organization’s physical walls (or their IT department’s firewall) can benefit from initiatives like: - Activism - “Long-tail” Brand Development - Brand Awareness & Loyalty - Market Research - Channel Enhancement - Product Feedback - Community Relations - Project Management - Customer Forums - Rapid Prototyping - Idea Generation - Recruiting - Innovation Support - Board or Shareholder Communications - Key Opinion Leaders - Word of Mouth Marketing - Alumni Relations SUCCESSFUL COMMUNITIES ARE NOT ACCIDENTAL Meaningful collaborative interactions happen because of a compelling topic, a motivated sponsor, or an engaging facilitator. In contrast, vendors offering a “field of dreams” approach to collaboration through free tools or some other “hook” that is bereft of community leadership may not succeed. To reduce the risk of a failed community initiative, building out a social network should include a few key constructs: PAGE 14 Q1 2009 COLLABORATION MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREE.COM
  16. 16. • Business Goals: Users want to connect, share, learn, belong, help and acknowledge interactions. There is a natural draw to individuals wanting to participate in forums that enable and simplify these interactions. • Governance/Rules: Just as in any functioning community, rules, roles and trust must exist. Governance via ratings, user verifications and other policies are important components of enterprise collaboration and social networks. • Ownership: Enterprises must assign a business owner to champion collaboration and social networking initiatives. While ownership may vary, having well defined goals will help guide which internal departments can best drive value. WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 Q1 2009 COLLABORATION PAGE 15
  17. 17. OTHER IMPACTS ON THE EXTENDED ENTERPRISE Software Development Tools There are a wide range of applications and uses for collaboration tools. While COLLABNET this report has considered a few of the drivers behind the growth and potential CollabNet’s web-based application lifecycle management solution provides tools to facilitate a of enterprise collaboration and communities, additional discussions regarding collaborative software development environment unique product vertical opportunities and delivery models are introduced below. that reduces friction in the software development process. Its solution connects disparate team members through a unified platform that increases Application Development: Distributed workforces, competitive environments, collaboration and workflow among remote team and extended supply chains are more challenging than ever before. Just as other members. By simplifying the entire development areas of the enterprise have called on social software to improve workflows process and fostering collaborative information sharing, CollabNet speeds time-to-market while and address new challenges, application developers are turning to these same minimizing infrastructure costs associated with approaches to improve the overall quality of the software development and software development. deployment process. Product Support: Vendors such as AT&T, Dell, and Symantec have turned to collaboration vendors like Lithium to build product support forums driven by user participation to drive down product support costs. Customers are encouraged Enterprise Community Management to participate in online product forums to solve FAQs, determine best-practices, LITHIUM TECHNOLOGIES Lithium is the leading provider of customer-centric and find new and innovative ways other users utilize products and services. The social networking solutions for the enterprise. goal of creating these communities is to eliminate costly inbound calls to product Working with market leaders, Lithium helps support teams by encouraging users to interact to solve each other’s problems. inspire customers to share knowledge, connect with each other, and connect with the enterprise, The goal of these user-generated forums is to improve customer support while thus providing a unique method for companies to transferring product support costs from businesses and into the communities. identify, engage, and understand customers. As a result, businesses can measurably improve their marketing and sales, accelerate innovation, and VERTICAL SOLUTIONS increase customer satisfaction. Lithium’s platform is proven in high-volume, growth environments and • Healthcare: provides the security, analytics, APIs, and multi- language support that enterprises demand. The way that consumers (patients or concerned individuals) now seek information goes well beyond face time with a care provider. TripleTree recently published a report on the Health & Wellness sector, where we explored how healthcare providers and patients are increasingly looking to web-based communities to find new ways to educate themselves. We Community Health contended that several companies are intelligently leveraging the social PATIENTS LIKE ME networking model to bring together various stakeholders in the healthcare The company creates new knowledge by charting the real-world course of disease through the shared system with similar interests. These communities have a voluntary, captive experiences of patients with various conditions such as audience and a well-defined need. One example is AmericanWell and its ALS, Multiple Sclerosis, Parkinson’s, HIV and Mood. solution to facilitate virtual interactions between providers and patients. In addition to communities of patients interacting to help them manage their personal illnesses, central Its revenue model is driven by reducing overall healthcare costs while to PatientsLikeMe’s model is assisting industry substantially increasing convenience. researchers to better understand the course of the disease through the exchange of patient-authorized structured health data on outcomes, symptoms, and • Financial Services: treatments. A surprising number of companies have evolved to offer social collaboration tools for investment decision support and loan requests. Specifically, these services include validating loan requests outside of formal bank lending constraints, posting and assessing peer feedback on financial decisions, aggregating personal financial information, and rendering targeted advice PAGE 16 Q1 2009 COLLABORATION MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREE.COM
  18. 18. via a single interface. Cake Financial provides an online portal for investors to measure portfolio performance and track how “top performers” are Connecting Patients and Providers investing and receive qualified opinions on live market moves as well as buy, ZOCDOC ZocDoc brings the speed and convenience of the sell and hold recommendations. web to enhance the manual process of booking a doctor or dentist appointment. Its online solutions • Education: enable users to view real-time calendar availability of providers in their geographic area and schedule an Traditional collaboration leverage points of knowledge capture peer-to-peer appointment, all from within a web portal. ZocDoc interactions and content management have strong ties into today’s education empowers consumers to make informed decisions more quickly. Through a single visit to its web portal, sector. Class coordination, project/report development and scheduling tools consumers can find local providers, review patient are a few examples being applied by both pre- and post-secondary schools. encounters and ratings, filter providers by insurance, and book appointments online 24/7. WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 Q1 2009 COLLABORATION PAGE 17
  19. 19. CLOUD COMPUTING Wiki Perhaps the most important trend driving collaboration is the mainstream SOCIALTEXT Socialtext is a high-touch wiki and social adoption of Cloud Computing and Software as a Service (SaaS). Today, most networking company centered on providing team-oriented interactions within organizations occur beyond the firewall wiki-centric collaboration tools to enterprises. and are best delivered via web-based platforms. The inherent nature of team- Version 3.0 of its flagship solution features oriented projects provides a synergistic fit with the web-based construct of SaaS a dashboard-like UC and social network tool. Recently, Socialtext announced plans solutions. The ad-hoc adoption of external collaboration projects with partners to develop a Twitter-like application for and customers allows knowledge workers to create temporary work environments businesses to serve the enterprise micro- with on-demand collaborative tools (wikis/blogs/virtual teams) to fulfill short- blogging market. term needs. Most on demand collaboration tools will offer: • More open environments • Faster implementation cycles • Simplistic deployments • Lower up-front investment • Simple and powerful ways to link users from multiple communities • An ability to extend business function to partners and customers • Reduced complexity and reliance on IT • A light technology footprint Enterprise Productivity Applications All of these are critical attributes for successful collaboration environments. GOOGLE APPS Although most of today’s collaboration deployments are on-premise, TripleTree Although enterprise sales constitute a small portion of total revenue, Google seeks views SaaS as the primary enabler of collaboration technologies and attributes to capture a larger share of the corporate much of today’s market interest and innovation to SaaS vendors. Certain offerings market through its Google Apps Premier such as enterprise content management (ECM) suites and tools stemming from Edition (GAPE). Built by piece-mealing a ERP suites will succeed predominantly behind the firewall but we are beginning host of recent acquisitions, Google has built to see more collaboration tools being offered via SaaS. a SaaS-based portfolio of tools centered around Google’s popular Gmail, Google Docs, Google Talk, and Page Creator. GAPE Because both delivery models feature value drivers for particular functionalities, lacks the functionality set of its on-premise the maturation of collaboration will bear a hybrid model that leverages both counterparts, but offers businesses a low cost, on-premise and SaaS. Successful collaboration platforms will tap the benefits slimmed down alternative to the IBM and Microsoft productivity application suites. of Cloud Computing (cost savings, openness, scalability, and extensibility) and maintain a footprint behind the firewall to serve internal systems. PAGE 18 Q1 2009 COLLABORATION MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREE.COM
  20. 20. CONCLUSION CEOs and their executive teams are now focused on the power of both niche and platform-oriented collaboration tools and the need to extend their enterprise by leveraging the social graph. For specialized vendors with discrete solutions, going it alone in an economic climate where speed to market and cost effectiveness dictate success (and survival) is not an option. As such, alliances and alignment within a larger vendor ecosystem are a good first step. For global firms, TripleTree asserts that collaboration features will become the very core of every enterprise application suite and that business functionality will become a secondary part of the platform. Other considerations: Content: Collaborative workflows are now more central to traditional enterprise content management (ECM) systems as knowledge workers seek real-time links to the producers of information. Collaboration capabilities improve content management solutions by allowing content creators the ability to manage information during the creation process via features such as wikis, threaded discussions, or instant messaging. Vendors integrating collaboration features into their content management solutions “For global firms, TripleTree asserts will be in a stronger competitive position to manage an exponentially growing that collaboration features will become information landscape. so core to every enterprise application Customer Service and Social Context: TripleTree predicts that marketing and suite that business functionality will customer service departments will remain the driving force behind demand for become secondary to the collaboration collaboration features and the unification of collaboration platforms. For ISVs, platform.” integrated email, content search, video, mobile features, and social tools are examples of features where value creation can occur, but questions about how social and – TripleTree professional connections will be maintained and extended in a secure, approachable platform still exist. Niche Solutions: Point-based collaboration solutions are becoming enmeshed in the enterprise application landscape and are providing “caulk” to link key workflows, individual roles, and performance metrics. To build strategic value, these solution providers need to consider how they will link to broader platform ecosystems. Platforms: Established vendors and global leaders need to aggressively engineer collaboration tools into their product suites. Some will sidestep organic development of collaboration features and turn to acquisitions for rapid market presence. TripleTree’s investment banking and advisory practice is focused on where disruptive technology-enabled delivery models are influencing horizontal software applications like collaboration. We look forward to learning more about your organization and understanding the key opportunities and challenges that are shaping your vision and how we can help accelerate your success. WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 Q1 2009 COLLABORATION PAGE 19
  21. 21. APPENDIX – SELECT COLLABORATION INVESTMENT ACTIVITY Transaction Most Recent Current Total Date Target Description Investment* Round* Investment* (All figures are in millions) Dec-08 JackBe Enterprise mashup software $5.0 D $21.0 Nov-08 KickApps Corporation SaaS-based media and community applications $14.0 C $32.0 Nov-08 Open-Xchange Open source email and collaboration solutions $9.0 B $17.8 Oct-08 Vivaty Online virtual communites $9.5 A $9.5 Oct-08 DimDim Open source Web conferencing solutions NA C $9.0 Sep-08 Digg Enables users to search and share content online via tagging $28.7 C $40.0 Aug-08 The Active Network Group specific online communities and Web 2.0 toolsets $80.0 F $275.0 Jul-08 Appirio On-demand adoption; and Google apps integration $5.6 B $6.7 Jul-08 Boomi On-demand application integration $4.0 A $4.0 Jun-08 LinkedIn Social networking for professionals $75.7 D $103.0 Jun-08 NetPickle Web-based widgets and applications on social networks $52.0 C $67.0 Jun-08 Lithium Technologies Social media platform for building enterprise communities $12.0 B $21.0 Jun-08 Zannel Mobile instant messaging platform $10.0 B $16.0 May-08 Flock Social network web browser $15.0 D $28.0 May-08 Think Passenger Brand management and customer collaboration $8.0 C $20.5 May-08 Online social publishing platform $25.0 C $40.0 May-08 Big Jump Media Video-centric social network $30.0 A $30.0 May-08 Starcite On-demand global meetings management $15.0 E $51.0 Apr-08 Ning Hosting services for online communities, blogs and forums $60.0 D $104.0 Jan-08 Alfresco Software Open source enterprise content management solutions $9.0 C $19.0 Jan-08 SugarCRM Open source customer relationship management software $20.0 D $46.0 Jan-08 Facebook Social networking website NA E $513.0 Dec-07 NewsGator Technologies RSS feed aggregation solutions $12.0 E $30.0 Oct-07 MyBuys Online consumer recommendation tools $10.0 B $14.5 Sep-07 FaceTime Communications Enterprise instant messaging applications $15.6 G $85.6 Aug-07 Metacafe Video-centric social networks and forums $30.0 C $45.0 Aug-07 Jive Software Social productivity and community solutions for enterprises $15.0 A $15.0 Aug-07 Hulu Ad-supported online video services $100.0 A $100.0 Jul-07 Loopt Mobile-based social mapping and communication service $12.0 B $17.0 Jun-07 Socialtext Wiki-based Web 2.0 technologies $9.5 C $13.5 May-07 Daptiv Project management and collaboration software $21.0 B $36.0 Apr-07 Social networking-based reunion website $25.0 A $25.0 Mar-07 Zopa Limited Online financial marketplace for lending and borrowing $12.9 C $34.0 Mar-07 RingCube Technologies Digital workspace solutions $12.0 B $16.0 Feb-07 Plaxo Online social networking and portals to consumers $9.0 D $28.30 Jan-07 VMIX Media Digital media platform to build online presence for the enterprise $22.0 B $27.0 * Information Based on Publically Disclosed Data MEDIAN: $15.0 C $27.5 Source: Capital IQ PAGE 20 Q1 2009 COLLABORATION MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREE.COM
  22. 22. APPENDIX – SELECT COLLABORATION M&A ACTIVITY Acquisition Enterprise EV / Date Acquirer Target Description Value Revenue Revenue (All figures are in millions) Dec-08 Six Apart Pownce Online file sharing, messaging, blogging NA NA NA Nov-08 Twitter Values of n Online email and productivity tools NA NA NA Nov-08 Oracle Tacit Software (IP assets) Shared profiles, messaging, and content sharing solutions NA NA NA Sep-08 Cisco Systems Jabber Unified communications, chat, and conferencing software NA NA NA Aug-08 Cisco Systems PostPath Linux-based email and calendaring software for enterprises $215 NA NA Aug-08 Athenahealth Crest Line Messaging services to the healthcare industry $8 NA NA Aug-08 AOL Socialthing Online social networking NA NA NA Aug-08 Tastemakers Online literature-centric social networking NA NA NA Jul-08 Hyland Software Liberty Information Digital asset management, e-forms, and email management solutions NA NA NA Apr-08 BT Group Wire One Video and Web conferencing solutions NA $140 NA May-08 Comcast Plaxo Online social networking and portals to consumers $150 $10* 15.0x May-08 eGenera Talisma Enterprise email, chat, and telephony applications NA $34 NA Apr-08 Six Apart Apperceptive Online enterprise social media and blogs NA NA NA Apr-08 Jive Jotlet Online calendaring and project management NA NA NA Apr-08 Seesmic Twhirl Twitter blog search and image uploading NA NA NA Apr-08 mindSHIFT Collaboration Online Hosted applications, messaging, and collaboration managed services NA NA NA Mar-08 AOL Bebo Online social networking and content sharing $850 $20* 42.5x Feb-08 EMC Corporation Pi Corp Online file sharing, search, and storage solutions NA NA NA Feb-08 West Corporation Genesys Conferencing Online, audio enabled conferencing solutions $285 $209 1.4x Feb-08 Novell SiteScape Integrated forums, blogs, wikis, chat and Web conferencing tools $19 $10* 1.9x Jan-08 Blackboard NTI Group Email and SMS mass notification solutions $182 $30 6.1x Jan-08 D&B Visible Path Corporation Online social networking for businesses $4 $3* 1.4x Dec-07 EMC Corporation Document Sciences Content publishing and automation software solutions $83 $39 2.1x Oct-07 Omniture Visual Sciences Optimization, content management, search, and data management $382 $76 5.0x Oct-07 AT&T Interwise IP-based enterprise conferencing solutions $121 $25 4.8x Oct-07 Google Jaiku Social networking, blogging, and content sharing solutions NA NA NA Sep-07 Yahoo! Zimbra Open source email and messaging solutions $350 $3* 116.7x Sep-07 Xerox Corporation Advectis Online document management, archiving, sharing, and collaboration $32 $8* 4.3x Aug-07 Microsoft Corporation Parlano Group chat enablement software solutions $53 $9* 5.8x Aug-07 IBM Corporation WebDialogs Online conferencing and meeting software NA NA NA Jul-07 Thoma Cressey Bravo Hyland Software Enterprise content management software solutions $265 NA NA May-07 Google FeedBurner Web-based RSS feed management solutions $100 NA NA May-07 Koral Web-based collaborative content management $7 $0.5* 14.0x Apr-07 Google Marratech AB Video conferencing, collaboration, and meeting software $15 $1.5* 10.0x Apr-07 Google Tonic Systems PP automation, presentation/document management NA NA NA Apr-07 CollabNet VA Software Tools and repository for open source development $7 $9 0.7x Mar-07 Cisco Systems WebEx Communications Web meeting and conferencing solutions $2,909 $380 7.7x Jan-07 Adobe Systems Antepo Instant messaging enterprise software NA NA NA * TripleTree and Industry Source Estimates MEDIAN: $111M $15M 5.4x Source: Capital IQ, The 451 Group WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 Q1 2009 COLLABORATION PAGE 21