What is the total market size for business communication software
Great question and thanks for letting Wonder help you out. Don’t worry… I am not yawning! Business communication tools are varied and there are a lot of them; it is an interesting topic. Let’s get started and find the Total Addressable Market (TAM) is for business communication software.
What I found in my research is the TAM for business communication software in 2015 (hold your hat, I included many sectors here) is: 67. 4 billion dollars.
Broken down a bit (in case you need these individual stats) we get a market value for global EMM software products in 2015 of 1.457 billion dollars. For Unified Communications (UC) we get a TAM of 38 billion for 2015. TAM for 2015 for Software as a Service is estimated to be 27.94 billion. Big numbers but not so large when you take into consideration that one small 2 year old business communications start-up - Slack - is now valued at 2.8 billion dollars.
How I arrived at these figures is explained in detail below.
Business communication software is a very general term that includes a large number of products such as those you mention above (Skype for Business, Webex, Spark, Slack, Hipchat, Unity) and many others (Eyejot, AIM Pro, 12Planet, Avaya, Huddle, WebEx, Novell GroupWise). The main function of this type of software is to facilitate the exchange of information between employees (or employees and clients). There are free products available for companies or individuals to use as well as those with paid services and licensing agreements.
Chat, email, video conferencing, IM, photo-sharing, writing software, public cloud services, access to company information - what about HR Technology used to recruit and train employees virtually? Enterprise mobility (workforce that can work - and communicate - from anywhere) products? Another term I found used was ‘collaboration software’ that is used to improve project management, productivity and workflow (AffinityLive, Box, DeskAway, Google Apps). SaaS - software as a service - can be used as a form of business communication software.
With such a variety of products and niche markets how can we determine the market value for all of these various services added together in one large umbrella group i.e. business communications?
The first stat I found was for Enterprise Mobility Management (EMM) software. How does this apply to business communications? According to an International Data Corporation (IDC) 2014 market report: “Security and compliance are obvious driving factors for EMM spending. However, the real value-add of EMM is that it allows IT to enable employees with the information they need to do their jobs.” The report stated the TAM for this software globally in 2014 was 1.4 billion dollars.
According to a Forbes.com article, Forrester’s outlook for 2015 predicts a 4.1% growth in government and business spending on communications equipment, computers, consulting and software. Applying this 4.1% figure to our 1.4 billion dollar for the global EMM market we get a TAM of 1.457 billion dollars in 2015.
For software such as Skype for Business, Google Apps, etc. what is the market value? What about other sectors of this broad ‘communications software’ industry we are evaluating? I found the following information in trying to add up the numbers for you.
Unified Communications (UC): “With Microsoft and others rebranding their unified communications offerings (UC), and just about everyone calling 2015 the year of UC, it would seem now is the time for CIOs to get on board. True: More organizations are turning to unified communications. True: IDC predicts the market will grow to $38 billion next year.”
Software as a Service (SaaS): “Global spending on SaaS is expected to reach $45.6B by 2017, according to industry estimates. SaaS is often used by line-of-business leaders who are looking to deploy technology to rapidly provide their teams with needed functionality, increase productivity and address new market opportunities. In fact, industry analysts estimate that by 2017, CMOs will spend more on IT than CIOs, while Forrester reports that 65 percent of business leaders have plans to buy technology for their group without involving IT at all.”
One last figure that I thought may be of interest, but that I did not use in the total above as it is a ‘service’ more than purchase of ‘software’ is public cloud computing - integral to many companies communications these days and at time replacing the need for internal IT departments.
Public Cloud Services: “The IDC expects that global revenue from public cloud computing services will grow four times as fast as information technology spending generally, increasing by 27.6 percent year-on-year from $21 billion in 2010 to more than $76 billion in 2015.“
I need to note also, I did not include stats and information on market value for Customer Relationship Management (CRM) software, as I did not think that was what you were looking for. But of course this is also a form of business communication software and according to Gartner will be a 36.5 billion dollar market by 2017.
I hope this information helps you and your presentation is stellar plus helps you to achieve your business goals and objectives. Thanks for using Wonder.