Yesterday Oracle announced the acquisition of another enterprise social technology player Involver. This marks another step in the inevitable consolidation of the enterprise software space.
For years, enterprise software technologies trends have typically go evolved based on a series of well-defined patterns or stages. From the emergence of a hot enterprise technology space, its immediate hype until its consolidation among a small group of players; every popular enterprise software movement has seen its history marked by a well-defined group of stages such as the following:
- Inception: A new trend in enterprise software is born; analysts and publications create the official buzzwords in the new space.
- Early Days: A few startups in the new enterprise software space emerge constantly challenging the well-established vendors.
- Growth and Initial acquisitions: The new enterprise software trends keep gaining momentum. Some of the initial players become relevant companies. A discrete number of initial acquisitions happen.
- Hype: The hype around the new trends goes out of control. We see news coverage about technologies in the space every day. Some of the early startups will take advantage of this momentum to IPO or being acquired at high valuations.
- Consolidation: Almost at the pick of the hype cycle, the bigger enterprise software player together will go on a shopping spree acquiring different companies in the target enterprise software space.
- Natural selection and extinction: During this phase, a lot of the smaller startups that didn’t get acquired went public or raised substantial amounts of founding will inevitably go out of business or become increasingly relevant. The next phase in the evolution of our sample enterprise software space will be marked by a battle between the bigger enterprise software vendors.
- Renaissance: Different variances of our sample enterprise software space arise. Some of them might evolve into a new trend and the cycle starts all over again at a smaller scale.
Looking at the current enterprise social technology landscape, we can almost assume that we are at the end of the consolidation stage and at the beginning of the extinction and natural selection phase. At this point, most of the more established enterprise software companies have already defined their social computing strategy based on a number of acquisitions. Let’s do a quick recap:
- VMWare acquired SocialCast
- Salesforce.com acquired Radian6, BuddyMedia and dymdim
- Oracle acquired Virtue and lnvolver
- Jive Software went public
- Microsoft acquired Yammer
- Citrix acquired Podio
Even though we can still expect a number of acquisitions in the space, we are more likely to start seeing the social enterprise battle centered on the aforementioned vendors. This will inevitably translate into a good amount of innovation in the space and the inevitably death of the majority of the remaining small players in the space.
Now that the social enterprise space is almost consolidated we have to ask ourselves what’s the next big enterprise software technology trends: I have my money in two main areas: big data and enterprise mobility.