Sizing Up the Social Media Software Market

As part of a recent interview process, I was asked to perform a series of projects as ‘homework’ to demonstrate my thinking, writing and presentation skills.  One of the projects was to create an estimate on the size of the social media software market.  While I didn’t get the job, the good news is that I am not going to let my research efforts gather dust or sit on my laptop in perpetuity.

I analyzed the social media software market size along two dimensions – types of buyers and types of software providers.  For buyers, I used the categories of large business (> 500 employees), medium business (100-500 employees), small business (< 100 employees), non-profits, hobbyists and special interest, and individual home market.  For types of software providers, I used White Label (average solution cost of $30,000), Budget (average solution cost of $500), Open Source and Free.  As far as the providers, here are representative companies in each category:

• White Label – the usual suspects including Awareness, HiveLive, Jive, KickApps, Leverage, Lithium, Mzinga, Pluck, Telligent, etc.
• Budget – vBulletin, Boonex, Ning, etc.
• Open Source – Drupal, Joomla, WordPress, etc.
• Free – Ning, PBWiki and a whole host of other providers

Conclusion – the total US social media software space is estimated at $600 million in revenue and 1.26 million potential customers.  The Global market likely adds 50% to totals – $900 million in revenue and 2.0 million prospects, and I estimated that 15-20% of overall market is currently penetrated.

Here are a couple of the graphs I created to visually display the results:

Social Media Software - Revenue By Segment ( per Tom Humbarger)

Total Social Media Software Market by Buyer Category

Approach – here is a summary of the approach I used to develop the sizing analysis:

• Statistics – Obtained business stats from US census and nonprofits stats from National Center for Charitable Statistics; used  best guestimates for hobbyists and home market
• Category interest – Estimated % interest in each category between large, medium and small business, nonprofits, special interest and hobbyists, and individuals
• Segment interest – Estimated segment % breakdown between White Label, Budget, Open Source and Free

I was not able to locate any published market sizing numbers for the Social Media software market – so I was unable to determine if I was in the ball park according to other numbers.  Plus, my analysis takes a quick-n-dirty approach and I would definitely validate it further if I were ‘getting paid’ for the assignment.

So, does anyone agree or disagree with the numbers or my approach?  I welcome any and all comments, suggestions and rebuttals.

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BTW, if you are really interested in the detailed approach, a picture of my detailed spreadsheet is copied below.  If you send me an email, I would be more than happy to send you a copy of the Excel file.

Social Media Software - Market Sizing Details

Making Software Simpler

Is your software simple and usable?

There was an interesting opinion piece at Sandhill.com last week titled “Simplicity: What’s Next in Business Software” by Anthony Deighton of QlikTech.

Anthony pointed out that the gap between what software users experience in their workplace and in the rest of their life is widening while the line between work and home continues to blur.  Business users are starting to expect that the applications they use at work be as clear, user-friendly, intuitive and simple as the other software they use.

The bottom line is that enterprise software vendors must “simplify or die” by embracing a philosophy of simplicity or risk getting left behind in the future by innovative and emerging vendors.

There are several characteristics of “simple” software that Anthony lists in his piece, including:

• Continue to offer robustness – “simple” is not the same as “lite”
• Focus on the user – enterprise software vendors need to focus on the user for a change
• Revamp the value chain – make sure you pick partner vendors and service providers who embrace the simplicity vision
• Deliver a fast sales and implementation process – the product must be easy for users, but also deliver quick value to the business
• Relentlessly pursue simplicity – you have to keep focusing on making your product usable and faster to deploy

Check out the full article and complete discussion thread from this link

Book Review: Effective Prototyping for Software Makers

Over on UX Matters, Leo Frishberg has written an extensive review of a new book on prototyping called “Effective Prototyping for Software Makers”.

Leo’s conclusion stated:

“In spite of the challenges this book presents to the casual reader, I would recommend it to anyone who considers prototyping an integral part of the software development process. If you have never used prototyping to make your products more usable and better targeted—while ultimately reducing your workload and simultaneously improving your code—this book provides a thorough discussion of the topic.”

The entire review can be found at this link.

The authors also have a website where you can download sample chapters and learn more about the authors.

“Visit our wite at www.effectiveprototyping.com.  Maybe this will help inform your decision about our book.

Once you own the book we will use this site to keep you posted on updated materials. For example, we have some prototyping samples as well as worksheets in our book. These will be available (in their native editable formats) via the web site; as will updates as we get more reader and usage feedback.”

Here is the detailed information on the book:

Effective Prototyping for Software Makers

Authors: Jonathan Arnowitz, Michael Arent, and Nevin Berger

Publisher: Morgan Kaufmann, Elsevier, Inc.

Publication date: 2007

Format: Paperback; 9.2 x 7.4 x 1.1 inches; 624 pages

ISBN: 0120885689

List price: $59.95

Requirements Document Alphabet Soup – Explained

Michael Shrivathsan explains the meanings of the six key acronyms that relate to requirements documents in this blog entry. The terms and his summary definitions are:

1. BRD – A Business Requirements Document (BRD) focuses on defining the business needs of a project. The BRD identifies one or more business problems faced by customers that can be solved by the company’s product. It then proposes a solution – usually a new product or enhancement to an existing product to address these problems.
2. MRD – Market Requirements Document (MRD) focuses on defining the market requirements for a proposed new product or enhancement to an existing product.
3. PRD – A Product Requirements Document (PRD) focuses on defining the product requirements for a proposed new product or enhancement to an existing product. Whereas the MRD focuses on requirements from the perspective of market needs, PRD focuses on requirements from the perspective of the product itself. It usually delves into more details on features and functional requirements, and may also include screen shots and user interface flows.
4. FSD – A Functional Specifications Document (FSD) defines the complete details of a product’s functional requirements with a focus on implementation. FSD may define the product specifications screen by screen and feature by feature. This is a document that can be directly used by engineers to create the product.
5. PSD – Product Specifications Document (PSD) is a less popular acronym, but in organizations that have such a document, it is by and large the same as the Functional Specifications Document (FSD) described above.
6. SRS – A Software Requirements Specification (SRS) is another less popular acronym. In organizations that create an SRS, it has contents and details somewhere close to what is described above for PRD or FSD.

Read the rest of Michael’s post at the following link:

Requirements Document Alphabet Soup – Explained by Michael Shrivathsan

http://michael.hightechproductmanagement.com/2006/08/requirements_document_alphabet_1.html