Enterprise social networking had a break-out year in 2007 with "much faster than expected growth," according to IDC's (News - Alert) Rachel Happe, research manager, Digital Business Economy.

 

While the market is still serviced by a wide variety of small players there was significant consolidation through mergers, acquisitions, and new products from existing players, she said.

 

"Enterprise social networking applications established a strong foothold in 2007, emerging as a more comprehensive product than single utility applications like blogs and Wikis," said Happe.

 

"A number of important societal, digital marketplace-specific, and enterprise trends are driving aggressive growth in this market. They include social filtering of content, media channel fragmentation, adoption of consumer social networking services, and the perception in mature markets like enterprise software that communities are a way to increase differentiation and retain customers," she added.

As an emergent market, the growth rate is high and spread unevenly between a variety of small vendors and a few larger vendors who represent a relatively large percentage of the market today, IDC's research found. While 2007 saw some consolidation, IDC expects that 2008 will see even more.

Social networking market growth will be moderated by cultural and resource limitations, Happe believes. Many companies will deploy social networking applications and see few benefits because of the lack of understanding or comfort with the openness required for social networking to be successful.

The higher than expected market adoption in 2007 has pushed long-term projections higher as well. While this forecast projects both slow and aggressive growth scenarios, the projected size of the market in 2012 is expected to be $1.3 billion.

The study, U.S. Social Networking Application Forecast 2008-2012: Enterprise Social Networking Takes Hold (IDC #211945), presents a market sizing and forecast in terms of total aggregated market revenue.