Clash of the Titans 2020 - Peter O'Kelly
September 7, 2020
· Posted by Peter O'Kelly
Revisiting Communication/Collaboration/Content Competition, ‘Co-opetition,’ and Culture: Opportunities for Traction Software and its Customer Community, my 2010 Traction User Group (TUG) presentation, it’s fascinating to realize how deeply the product strategies of the leading enterprise communication, collaboration, and content (3C) vendors were disrupted over the last decade. It’s also frankly a bit discouraging to realize how much 3C potential has yet to be realized by most mainstream enterprise end users, although that’s somewhat offset by the knowledge that Traction customers have been benefitting from the ongoing refinement of TeamPage’s pioneering collaborative hypertext journaling system the entire time. In this post, I’ll share perspectives on what has changed in the 3C product families of the vendors identified as enterprise 3C titans in the 2010 presentation along with some highlights of vendors that weren’t part of the 2010 discussion but are important 3C competitors today. I’ll close with some thoughts about where Traction fits into the current enterprise 3C landscape.
Revisiting 3C Market Dynamics
Revisiting the list of market dynamics enabling 3C optimization in 2010:
- The target for contextual applications shifted from PCs to smartphones and tablets, and that, from a 3C perspective, typically meant reverting to basics such as email and chat apps along with file attachments. Slack and other 3C startups were able to build momentum against the enterprise 3C incumbents in part by starting with relatively simple mobile apps (with backend services usually hosted on AWS).
- Social content and social networking didn’t go according to the c2010 “Enterprise 2.0” vision. Many of the wiki-focused startups faltered, and some of the market leaders were acquired and subsumed into broader product portfolios. In the consumer market, blogging and microblogging were generally disrupted by Facebook and Twitter, and many activity stream-focused enterprise offerings were similarly disrupted by the basic Internet Relay Chat (IRC) model revitalized by Slack.
- The integrated work and personal tools I described in 2010 did not, for a variety of reasons, come to fruition. Apple’s Messages and FaceTime apps are popular for people using Apple devices outside of work, for example, but they often aren’t practical in the mixed-platform enterprise world. Microsoft Teams was another surprise in this context, rushed to market in late 2016 to compete with Slack and still mostly limited, by mid-2020, to intra-enterprise 3C needs.
- The “software + services shift” described in the 2010 presentation was also disruptive. While Google G Suite has been a cloud-based offering from the start, it took Microsoft many years to transition from the basic Exchange Online and SharePoint Online services in its early BPOS suite to its current Microsoft 365 product family. In the meantime, startups such as Basecamp, Slack, and Trello leveraged the “mobile-first, cloud-first” transition to build large customer communities.
Tumultuous Titanic Transitions
Turning to a review of the 3C product portfolios of the vendors highlighted in the 2010 TUG presentation, I’ll follow the same sequence (IBM, Microsoft, Google, Oracle, and Cisco) and briefly address some of today’s market leaders that likely weren’t on the 2010 enterprise short list (or didn’t exist then).
IBM had an exceptionally difficult decade. Its overall business was severely challenged, especially by the enterprise shift to cloud platforms. IBM was unable to make cloud data center investments at the level required to compete with Amazon, Google, and Microsoft, and it also couldn’t sustain its historical investments in its 3C product families.
The IBM Notes/Domino installed base has been a primary migration target for Microsoft and Google for many years, especially for enterprise messaging, and IBM’s 3C platforms based on WebSphere and its cloud acquisitions and ports, the company’s big 3C bets in 2010, failed to build market momentum. IBM attempted to leverage the activity stream model with IBM Verse (with, inevitably, Watson-powered “cognitive bots”), and expanded into human capital management and other collaboration-centric market segments, but those initiatives were also generally unsuccessful.
IBM quietly sold nearly all its 3C products to HCL in 2019. Many enterprises worldwide still use Notes/Domino, Sametime, Connections, and other former IBM 3C products, and it’s possible HCL will be able to at least slow migrations from the products by investing in the former IBM products that still have unique capabilities (e.g., Notes for 3C app development), but it’s unlikely IBM’s former 3C product lines will amount to more than an installed-base play at this point. Incidentally, IBM is also one of Slack’s biggest customers today.
Microsoft’s 3C journey has also been a bit bumpy over the last ten years, but it has been far more responsive to changing market conditions than IBM was, and it had the financial resources to make massive cloud platform investments that IBM couldn’t match. Microsoft’s 3C success required a few strategic acquisitions and a lot of enterprise customer patience, but it is now in a strong enterprise 3C market leadership position.
SharePoint’s shrinking role was one of the biggest changes in Microsoft’s 3C portfolio since 2010. At that time, SharePoint was Microsoft’s primary focus for collaboration and content, but its .NET-based architecture and server-generated user experience model (which generally felt a lot like a circa 1996 intranet platform) made it difficult for Microsoft to keep up with faster-moving competitors, and the company made several major acquisitions (e.g., Skype in 2011 and Yammer in 2012) in attempts to address changing enterprise customer needs. SharePoint in many ways now resembles Lotus Notes: both were enterprise 3C leaders (starting more than a decade apart) with large installed bases and partner communities, but generally lacking enthusiastic end users.
SharePoint was relegated to more of a supporting role by the time of the 2015 Microsoft Ignite conference, coincident with the launch of Office 365 Groups and with emphasis on newer Office apps such as Delve, but the SharePoint customer and partner communities remained committed, and a year later, at the 2016 Ignite conference, SharePoint was again back at the center of the Microsoft collaboration and content strategy.
A mere five weeks after the 2016 Ignite conference, however, Microsoft essentially threw away some SharePoint-centric parts of its 2016 Ignite script with the surprising introduction of Microsoft Teams, which became known as Microsoft’s “Slack killer.” Teams, which builds on services spread across Azure, Exchange, and OneDrive, and SharePoint, has since become very popular. The legacy SharePoint app developer community also continues, but even Microsoft’s 3C-centric tools strategy has been disrupted, with a shift to Power Automate (originally named Flow) and Power Apps.
Google also had a bit of a bumpy enterprise 3C experience during the last ten years. There had been longstanding questions about the extent to which G Suite was considered a hobby to Google’s leadership team, with the Google consumer platform app/service teams periodically throwing code over a Googleplex wall to be extended for enterprise deployments, a perspective reinforced by Google’s relatively small investments in enterprise customer support programs.
Like IBM, Google also had more strategic business challenges to address, especially Facebook’s rapid growth in the digital advertising domain. Google attempted to directly challenge Facebook with Google+, launched in mid-2011, and had high hopes for its consumer-oriented collaboration potential (which would subsequently be added to G Suite), but Google+ failed to disrupt the social networking domain and was shut down in 2019. The enterprise version of Google+ was scaled back and rebranded as Google Currents.
With Google appearing a bit ambivalent about its G Suite business and Microsoft hitting its stride with Office 365 (later renamed Microsoft 365), Microsoft was able to regain some competitive ground lost to Google earlier in the decade. In late 2018, however, Google hired Thomas Kurian, a seasoned enterprise software leader with more than twenty years of experience at Oracle, to lead its Google Cloud and G Suite businesses, and Kurian in turn hired Javier Soltero to lead the G Suite business.
Soltero was previously a Microsoft Office Corporate VP, having joined Microsoft when the company acquired Acompli (of which Soltero was co-founder and CEO) to create Outlook Mobile. Soltero recently introduced a new and streamlined version of Gmail, consolidating a range of communication and collaboration capabilities (mail, chat, rooms, and meetings) in a streamlined user experience.
Overall, despite some detours and missteps over the years, Google now appears to be poised for resurgence in the enterprise 3C market. A lot is riding on G Suite’s success, in part because every Microsoft 365 customer is also an Azure customer, making it more difficult for Google to build enterprise momentum for Google Cloud.
Oracle and Cisco, the last two “titans” highlighted in my 2010 TUG presentation, both had experiences more like IBM’s than Microsoft’s or Google’s. Oracle Beehive failed to build significant customer momentum, and Oracle’s enterprise customers today are likely to be far more interested in integrating Oracle’s app suites with Microsoft Teams or Slack than they are in using any 3C Oracle products.
Cisco had an even more difficult decade. Rather than expanding its real-time communications and WebEx web conferencing businesses into a full suite of 3C apps and services, as it hoped to do in 2010, Cisco is now facing unprecedented competitive challenges from a group of former WebEx executives who left Cisco in 2011 to create Zoom. By early September 2020, Zoom, accelerated by the abrupt shift to people working and learning from home triggered by the 2020 pandemic, was worth more than $107B (at that time approximately 62% of Cisco’s market cap, and closer to 97% of IBM’s market cap).
Some Enterprise 3C Disruptors
If I were to present a similar enterprise 3C “titan” presentation today, Atlassian would follow Microsoft, Google, and Slack, in terms of overall enterprise 3C importance. Founded in Australia in 2002, Atlassian started with Jira, a project- and issue-tracking app that has been broadly successful with development teams and has been expanded into other business domains (such as general-purpose project management).
In addition to Jira, Atlassian became a leading wiki platform competitor with its Confluence platform, introduced in 2004, and Confluence has remained a popular collaboration and content solution while other early commercial wiki platform vendors (e.g., CubeTree, JotSpot, and Socialtext) were acquired and subsumed into broader product suites. Tangentially, the hype-to-reality index on wikis got so far out of control during the “enterprise 2.0” marketing wave that Atlassian doesn’t promote Confluence as a wiki platform at this point; you won’t find a single instance of the word “wiki” on the Confluence product overview page.
Atlassian was also an early enterprise chat competitor with HipChat, and later launched Stride, a more advanced Slack competitor, but subsequently opted for a strategic partnership with (and investment in) Slack in 2018 and retired its own chat products.
Atlassian also acquired Trello in 2017, expanding its project and task management portfolio. Overall, while Atlassian has generally been a somewhat quiet, engineering-driven company, foregoing aggressive marketing campaigns, it had grown to become a more than $45B public company by early September 2020, and its Slack partnership is highly complementary.
Slack, of course, was arguably the biggest 3C disruptor of the last ten years. In hindsight, it might seem improbable that Slack was able to transform a reimplementation of IRC (including IRC-style bots), admittedly with modern mobile apps, a globally scalable architecture on AWS, and a vibrant community of integration partners, into an enterprise 3C leadership role. Slack was broadly deployed by the time Microsoft introduced Teams in late 2016, however, and its approximately $17.5B market cap, by early September 2020, provided the company with a lot of leverage for expansion.
Salesforce is another major enterprise vendor with a strong 3C value proposition. Its 2016 acquisition of Quip provided a modern productivity app foundation in which Salesforce can integrate its line-of-business app suite with streamlined and hypertext-based contextual activities.
Zoom is also well-positioned as a future enterprise 3C titan, of course. While it’s currently considered primarily a web conferencing vendor, Zoom has some significant market expansion opportunities and a phenomenal amount of financial leverage.
As a final titan-level vendor note, Amazon has been primarily mentioned in reference to AWS so far in this post, but Amazon also has a variety of 3C offerings including Amazon Chime for voice and video meetings, Amazon WorkDocs for file storage and sharing, and Amazon WorkMail for enterprise messaging. Amazon Honeycode, for no-code and database-driven mobile and web app development, was introduced in mid-2020 and has some 3C potential, but its launch does not appear to have garnered much enterprise interest so far.
Amazon also faces a classic “co-opetition” conundrum, however, in that most of the 3C apps/services not currently controlled by Facebook, Google, or Microsoft are likely to be hosted on AWS. With its financial leverage, Amazon could seek to acquire leading vendors such as Airtable, Atlassian, Box, Dropbox (which launched on AWS but later migrated to a private data center network), and/or Slack, but AWS leadership may assume the revenues AWS earns by hosting many 3C market leaders and its vibrant ecosystem of 3C partners comprise a better strategic bet. At this point, in any case, Amazon is not, directly, a strong enterprise 3C competitor.
Traction: Still the Collaborative Hypertext Journaling System Pioneer
A decade after my 2010 TUG presentation, I continue to believe Traction TeamPage best exemplifies the hypertext 3C potential that industry legends including Doug Engelbart, Ted Nelson, and Andy van Dam envisioned more than fifty years ago. While the enterprise 3C titans have been constantly disrupting their customers and partners with major changes to their product lines over the years, Traction’s team has remained focused on a consistent vision that’s delivered by its robust (and patented) collaborative hypertext journaling system architecture.
Although Traction is still a relatively small vendor, its sustained focus on substantive customer solutions and ongoing refinement of its platform make it a vendor to consider for all organizations seeking to benefit from the transition to the types of contextual activities that remain central to the overall 3C value proposition.