Industry Reference: Social Business Stack for 2011

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National Venture Capital AssociationNovember 4, 2010

Jeremiah OwyangIndustry Analyst, Altimeter Group

Industry Reference:The Social Business Stack for 2011

© 2010 Altimeter Group

This is only a part of the overall presentation that was presented to over 100 Silicon Valley VCs on Nov 4th, 2010

I’ve removed forecast data (enterprise buyers in social business, 2011) as it will be published in upcoming Altimeter Reports.

- Jeremiah Owyang, Industry Analyst

Research Note2


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Social media is no longer the latest “shiny object.”

79% of corporations are undertaking social

media efforts –yet while disruption is high, budgets

are miniscule, although they are immediate

pockets of opportunity for the right investors

Source: http://www.burson-marsteller.com/Innovation_and_insights/blogs_and_podcasts/BM_Blog/Lists/Posts/Post.aspx?ID=160


The Social Business Stack


Image by Pieter Musterd used with Attribution as directed by Creative Commons http://www.flickr.com/photos/piet_musterd/1858568495


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A Cambrian Explosion has occurred. The social software

space has ballooned into a disparate set of technologies,

data types, and over 1000 vendors confusing buyers.

Despite the explosion of innovation, expect a “Social

Business Suite” to appear that consolidates many of

these features for enterprise buyers.


The Social Business Stack 7 Categories, 18 Discrete Classes, for 2011

Source: Altimeter Group, 2010

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The Stack: 7 Categories of Social Business Software and Service


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Brand monitoring:

• Over 145 known vendors, including Radian6, Alterian, Scout Labs, Visible Technologies, Cymfony

Social Analytics/Insights:

• Crimson Hexagon, Crowd Factory, SAS, Oracle, Sap, Qlikview

Monitoring and Analytics10




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Social Inbox Aggregation:

• Chatter, SocialText, Gist

Identity Brokers:

• Gigya and Janrain

Aggregation and Curation Solutions:

• Disqus, Echo

Aggregation12




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Applications in Social Networks:

• Over a 1 million apps in Facebook alone, while other social networks like LinkedIn and Twitter experiment with developers

Social Media Management Systems:

• CoTweet, HootSuite, Sprinklr, Objective Marketer, Expion, SpredFast

Sharing Tools:

• Has become a feature of other systems, also Sharethis and Addthis

Publication14




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Community Platforms:

• Awareness, Mzinga, Jive, Telligent, Ingage Networks, Kickapps, Pluck, Lithium, Liveworld

Collaboration Platforms:

• Sharepoint, Jive, Telligent, Atlassian, SocialText, PBWorks, and recent entrant BroadVision’s Clearvale

Enterprise Microblogging Platforms:

• SocialCast, Yammer, Gist SocialText, Chatter

Blogging Platforms:

• Wordpress, SixApart, Squarespace, Google’s Blogspot

Innovation Platforms:

• Salesforce Ideas, UserVoice and open source Pligg

Social Commerce Platforms:

• Bazaarvoice, Zuberance, Alvendia, ShopIgniter, Wildfire Interactive

Social Platforms16




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Data Layer:

• Data brokers are emerging (brand monitoring is harvesting data, SSO) and reputation identifiers (Gist, Rapportive, Klout)

Social CRM:

• Many vendors claim Social CRM, yet we’ve yet to see a single vendor that spans the gaps across all the use cases

Infrastructure18


Marketing SalesService & Support

Innovation CollaborationCustomer

Experience

2. Social Marketing Insights

3. Rapid Social

Marketing Response

4. Social Campaign Tracking

1. Social Customer Insights: The 5M’s

5. Social Event

Management

6. Social Sales Insights

7. Rapid Social Sales Response

8. Proactive Social Lead Generation

9. Social Support Insights

10. Rapid Social

Response

11. Peer-to-Peer Unpaid

Armies

12. Innovations

Insights

13.Crowdsourced

R&D

14. Collaboration

Insights

15. Enterprise Collaboration

17. Seamless Customer

Experience

18. VIP Experience

16. ExtendedCollaboration

© 2010 Altimeter Group Attribution-Noncommercial-Share Alike 3.0 United States

The 18 Use Cases of Social CRM




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Agency (digital)

Agency (specialized)

Consulting: 1000s of ‘experts’

Research and Analysis

Advocacy Programs, blogger networks

Peer groups, conferences, and education

Services21


Enterprise Buyer Behaviors


Image by Slowtron used with Attribution as directed by Creative Commons http://www.flickr.com/photos/fuckr/91530309


For Internal Goals In 2011, Social Strategists will focus on Measurement of ROI

Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010

We asked 140 Corporate Social Strategists: “What internal social strategy objectives will you focus most on 2011?”

Policies and Procedures

Resources: Increasing budget/headcount

Getting Tools and Technologies in Place

Developing a Listening/Monitoring Solution

Getting Buy-In from Stakeholders

Applying Social Insights to Product Roadmap

Determining an Organizational Model

Internal Education and Training

Creating ROI Measurements

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

22.0%

24.6%

26.3%

29.7%

32.2%

34.7%

34.7%

37.3%

48.3%


Analyst Notes: 2011 Internal Goals

The previous slide is only partial data of Altimeter’s research, respondents were asked to select three top objectives.

• Most companies are continuing to struggle with measuring this amorphous beast due variation on data types, distributed nature, and cultural resistance.

• Struggling to make sense of how to react, companies are undergoing a cultural change and are continuing to focus on internal education and organizing the company

• In summary, companies are still focus on getting internal programs in order --expect stronger go to market activities in 2012.

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Externally, will focus on integrating social onto the corporate website

Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010

We asked 140 Corporate Social Strategists: “What external social strategy objectives will you focus most on 2011?”

Enabling Peer-to-Peer Support

Providing Direct Customer Support

Collobarating with Customers

Mobile/Location

Social Commerce

Formalizing an Advocacy Program

Fostering Word of Mouth

Listening/Learning about Customers

Developing Ongoing Dialog with Customers

Website Integration

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

13.9%

16.4%

19.7%

20.5%

22.1%

24.6%

36.9%

37.7%

43.4%

46.7%


Analyst Notes: 2011 External Goals

The previous slide is only partial data of Altimeter’s research, respondents were asked to select three top objectives.

• Additionally, prepare for integration (46%) of existing social features such as surfacing the contextually relevant content from private branded communities. Expect first steps to be campaign orientated.

• Prepare for aggregation of socially created content on corporate websites. Yet despite the desire –most brands—not ready to take on negative content on corporate website.

• Most companies still focused on traditional marketing tactics in social channels, hence the focus on Dialog at (43%)

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Investment Opportunities


Image by Slowtron used with Attribution as directed by Creative Commons http://www.flickr.com/photos/fuckr/91530309


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Enterprise buyers are still gearing up internally and focused on

proving the value of this new technology.

Vendors who can provide scalable social media programs that

reduce labor, provide insights beyond monitoring, and offer a

mixture of services stand to succeed.

Technology vendors must move into adjacent categories in the

stack or suffer the fate of the extinct trilobite.Source: http://www.burson-marsteller.com/Innovation_and_insights/blogs_and_podcasts/BM_Blog/Lists/Posts/Post.aspx?ID=160


Brand Monitoring: 145 vendors, commodity technologies

• They must quickly move beyond measuring engagement data to social analytics

Community Platforms: Stable, yet 125 vendors, commodity technology

• They must move to SCRM (starting with brand monitoring), website integration or SMMS quickly.

Any standalone trilobite who doesn’t have multiple plays in the stack

• They must connect across the stack –or become irrelevant as buyers will require a suite.

Saturated and Stable Markets –and what they should do about it.

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1) Companies that offer solutions to enterprises –including services.

• Tip: Services can be monetized, sell as solution bundle, and know where to outsource (community management, raw analytics) and create education repeatables –not one-offs.

• Vendors that automate services like WOM, community management, manual measurement, and standardized education.

Investment Opportunity #130


2) Vendors that can measure –but beyond engagement data and can tie to social commerce

• Most important metrics: Revenue increase, CSAT, Advocacy

• Pre built templates that can funnel engagement metrics into business metrics



3) Social Media Management Systems:

• Companies that manage complex social networking accounts –and provide analytics

• Publishing isn’t enough, seek workflow, recommendations, and then analytics

• Expect this space to be ripe for M&A as community platforms and email marketing platforms must quickly become relevant in this arena.



4) Aggregation that connects back to the corporate website

• Seek vendors that offer intelligent curation beyond a river of data

• Aggregation quickly will move to ‘social context’ and web pages will be assembled on the fly



5) SCRM suites not ripe in 2011 from buyers–but invest in underlying infrastructure of companies who do matching and automated workflow

• The market doesn’t know it needs scalable systems for social business --yet

• But as they will struggle to scale –IT will finally come in to save the day.

• The CIO becomes relevant in social business by providing underpinning infrastructure that marketers were unable to plan for.


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Jeremiah [email protected]

m

web-strategist.com/blog

Twitter: jowyang

THANK YOU

With assistance from Christine Tran, Researcher

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Altimeter Group is a Silicon Valley-based research and

advisory firm that provides companies with a pragmatic

approach to disruptive technologies. We have four

areas of

focus: Leadership and Management, Customer Strategy,

Enterprise Strategy, and Innovation and Design.

Visit us at http://www.altimetergroup.com or contact

[email protected].

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