Analysis: Social networking gets down to business

Big technology vendors such as IBM and Microsoft are increasingly offering social networking products that aim to help companies integrate the benefits of social media into existing business software. However, does this mean that companies will finally begin taking the idea of social business seriously?

The predictions from industry watchers indicate that is indeed the case. According to figures from Forrester Research, for example, the market for social networking platforms will grow at a compound annual growth rate of 61 per cent to $6.4bn (£4bn) by 2016.

While Gartner analyst Jeffrey Mann believes that there is a clear increase in the uptake of social business platforms by many companies, he also thinks that the rate of adoption varies between industry sectors and the type of customer that the business serves.

“It depends on what industry the business is focused on. For example, those businesses that have a consumer presence find it easier to take on board social network platforms because they already use many consumer products within their environment, but business-to-business companies find it harder,” he said.

Employees at the forefront

In terms of revenue, the two most significant worldwide adopters of IBM’s social business offering IBM Connections are the financial services companies and the public sector. The financial services sector is particularly prominent when it comes to the uptake of IBM’s social media technologies in the UK.

“Financial services companies and the public sector had issues with compliance and concerns about security, but once these are ironed out, both sectors are well suited to social media and social business platforms,” said IBM social collaboration portfolio manager Ofer Guetta.

Gartner’s Mann said that the fact that the financial services sector and government are the most successful adopters is not surprising as employees are using the tools already.

“There has been a recent shift from a management perspective on social business platforms. Employees are using social networking and their own devices as business tools so CEOs have had to take notice,” he said.

Ovum analyst Richard Edwards agrees with Mann, claiming that businesses now need to move on from the question of whether or not to adopt social media techniques and start integrating social tools across the business to avoid developing social business silos.

“Enterprises have to be careful that different departments are not using different social business applications. The business would not benefit from the interconnectivity that a social network is designed for. Even if CIOs aren’t for implementing a social network, people will go and use one anyway,” he said.

But many companies remain unaware of the advantages of implementing a social business network. Guetta said IBM’s social media strategy is based on demonstrating the strengths of social media both outside and inside the organisation.