Two months ago I wrote a post lamenting over how the emerging enterprise social media/social CRM vendors are making the same mistakes we have made over the past 40 years in the enterprise software industry and alluding to the fact that I expected the major enterprise technology vendors to enter the market in earnest this year. I just never thought we would see so much before the end of Q1. During the past 5 days, IBM launched a social media analytics solution based on its Coremetrics acquisition last summer, and today Salesforce announced their plans to acquire Radian6, one of the leading social listening/analytics platforms (disclosure: SAP is a Radian6 customer).
While the jury is still out on whether Salesforce overpaid (I heard from a VC friend today that the $326M amounts to 5x of Radian6’s 2012 revenues), whether there will be a culture clash, as the much smarter than me, Paul Greenberg said today, or whether we are in a bubble (Warren Buffet appears to think so and I concur), there is no doubt this IS the market to be in if you are in the enterprise technology space today.
In my opinion, there are three things enterprise social media/social CRM vendors need to do in this emerging market to rise above the noise:
- Simplify, simplify, simplify: This was the main thesis of my January post, and I cannot emphasize this enough. Most solutions today boil the ocean and have no focus on what the user is trying to do (and most of us as I said then, don’t know what we don’t know yet). Please understand what your users are trying to do and don’t be afraid to say no to the next feature request.
- Remove the noise (pun intended): I thought it was fitting to see this Huffington Post article appear today where, based on research conducted by Cornell University and Yahoo! Research, the level of noise in Twitter is raising to levels that questions its efficacy-apparently 50% of all tweets are generated by less than .05% of all users. I guess this is why Jack Dorsey decided to return to Twitter as its Chief Product Officer. As he was quoted in the Wall Street Journal today: “We have a lot of mainstream awareness, but mainstream relevancy is still a challenge”. Regardless of what Twitter does (and of course Twitter is not the only channel), enterprise social vendors need to at least get to where Google is today vis-à-vis removing the noise.
- Integrate with back-end CRM systems: This is the holy grail today and with very few exceptions, no vendor has cracked this. While I would argue most companies that I know of are not ready, we are all thinking about this and the vendor that helps us get there will create immense differentiation. Even for simple use cases, such as social programs around events, the value of knowing who your net new vs. existing customers and influencers are will drive tremendous value to companies as they try to engage in social.
What do you think? Is this a bubble because there is no ‘social’ value or because the market is so over-hyped? Will it be 10 years before we see sanity sink in? As always, I would love your thoughts.