Enterprise Social-Collaboration: Is Our Will Still Greater Than Our Wallets?

  • 14-Oct-2014

Since social and collaboration technology has been all the rage since at least 2008, you would think that enterprises are spending a ton of money on it.  RSG's recent customer survey research counters this assumption. 

Amid concerns on behalf of executives and line employees alike (download summary report here), enterprise spend here is lighter than you might think. Perhaps it is still early days for this technology, but meanwhile, in the words of a former U.S. President, our will seems greater than our wallets.

How much are organizations spending on social-collaboration technology?

RSG’s 2014 survey suggests that the median annual budget on social software is US $875,000 for organizations that have more than 10,000 employees. The median budgets are $125,000 and $100,000 for the next levels (size) of organizations.

Median Budgets for Enterprise Social Software
Fig.1: Median Social-Collaboration budgets by enterprise size.

Using the mean as the average value measure, the annual social software budget for large enterprises is $1.6 million. For the next level of organizations, it drops to $223,000 and $130,000 respectively.

 Average Budgets - Enterprise Social Software
Fig.2: Average Social-Collaboration budgets by enterprise size.

Note that this total budget includes software, hardware, consulting, tech support, and internal staff costs. The two biggest line items are software and internal staff costs, at about 30% each.

Compared to the other software categories (e.g., Enterprise Portals, CRM) budgets for social-collaboration initiatives clearly fall on the lower end. Moreover, it appears that spend in Europe could be substantially lower than in North America.

What Accounts for Smaller-Than-Expected Spend?

Some hints come from the survey's other findings:

  • Chronic low adoption, likely reducing enterprise footprint
  • Pervasive understaffing (i.e., companies are rolling out technology but not beefing up necessary support and facilitation staff commensurately)

Note, however, the sizable difference between large (1,000-10,000 employees) and very large (> 10,000) enterprises.  As with any other technology, doing social and collaboration at scale -- especially global scale -- becomes a qualitatively different challenge, a finding borne out by numerous advisory calls with our largest subscribers.

What This Means for You

The million dollar deals that vendors often tout tend to be more the exception rather than the norm. If as a customer you believe your organization is underinvesting here, well, at least you're not alone.

A silver lining is that perhaps there is a lot of room for growth. Our survey finds you telling us that your #1 challenge is lack of executive buy-in. Adoption and budgets will go up only when the employees using the software and the executives paying for it see greater use and business value.

PS: For more on budget split across different categories, geographical differences, and a lot of other survey findings, RSG subscribers can join us for an exclusive webinar with all the details on 16th October. Non-subscribers can receive a summary overview via a complimentary webinar on 23rd October.

Our customers say...

"RSG's The Collaboration & ESN Research is by far the most exhaustive and comprehensive attempt to understand and evaluate the landscape of enterprise social-collaboration software I've ever seen."

John Eckman, CEO, 10Up

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