Social Technology Continues to Infiltrate the Enterprise

By David A. Kelly, Upside Research

It’s been a busy year for Social Business, and as 2012 draws to a close, it is worth another look at how this enabling technology is becoming more firmly implanted in the enterprise IT fabric. Most recently, IBM completed its acquisition of Kenexa, a cloud-computing talent management company. The $1.3 billion deal helped IBM join a burgeoning hot spot in social business, talent management, which helps organizations optimize their recruitment, employee retention, and employee learning functions. Kenexa has 2,100 employees and more than 8,900 customers, including marquee names like Starbucks, Wal-Mart, Verizon, and recently Cargill. IBM has plans to combine its existing social business capabilities with Kenexa’s talent management and consulting services to help its customers build an “end-to-end social business.”

IBM’s addition to its social business offerings reflects a common theme I have seen in 2012, with enterprise software vendors scooping up social business technologies. Notable among the flurry of activity in the space was Microsoft’s $1.2 billion acquisition of social networking too Yammer, Salesforce’s acquisition of Buddy Media, a social advertising platform, for $689 million, and Oracle’s purchases of Vitria and Collective Media in the social space (see Acquisitions Heat up Cloud-based Social Marketing and Collaboration Space: Enterprise Platform Vendors vie for Valuable Market Share).

All of these deals highlight the opportunity that enterprise software vendors see in adding social technology to their offerings. If there is any question as to whether this is what enterprise customers want, look no further than Yammer for your answer. To date, Yammer is being used inside 85% of the F500 companies, an impressive penetration rate. This social business adoption pattern is reflected in a recent study by IBM that revealed that 57% of CEOs that were surveyed identified that becoming a social business is a top priority for their organization. And, more than 73% of the survey participants are making significant investments to capture and gain insight from big data, a technology that goes hand-in-hand with social business.

More germane to the enterprise social business transformation is how social capabilities are finding their way into enterprise apps.  Microsoft plans to incorporate Yammer directly into Office in 2013. This represents a trend I feel is the best use of social technology – embedding it into the enterprise applications that line-of-business employees live in every day. It has been difficult for some social technologies to gain momentum inside corporate walls when employees are required to leave their productivity applications to leverage the social functionality. Embedding it into the applications makes the most sense, and guarantees a much higher success rate.

Although 2012 is fast coming to a close, the social technology space is by no means quieting down. I expect to continue to see mergers and acquisitions on both the business- and consumer-side, with enterprise software vendors working hard to incorporate social functionality into their operational platforms to truly help enable the social business of tomorrow.