The blogorrhea is so full of effluent about Facebook, one could be forgiven for missing the social networking wave among business users.
That's right. Corporate desk jockeys updating, blogging, microblogging, etc., all day long about work-related stuff. But all this SHARING isn’t done on Facebook or Twitter or Pinterest.
Turns out there are lots of entrepreneurial companies selling what is termed “ESN” (Enterprise Social Networking) by the SNC (social media cognoscenti). Even the big-ass guys like IBM, Cisco, and Salesforce.com are packaging their traditional software with social networking programs.
ESN vendors don’t rely on advertising or “virtual currency” (is it redundant to put that one in quotes?) as Facebook does. No FartVille here. Instead, these companies have an old-fashioned business model.
THEY CHARGE USERS A FEE TO ACCESS THEIR SOCIAL NETWORKING PLATFORM.
So things must be going swimmingly, yes? No.
First, let’s look at the financials for Jive Software, one of the few pure-play ESNs that is a public company (ESN’s contribution to sales for IBM et al. is so tiny it is not broken out separately for them). A license to print revenue. And a license to burn profits.
Lazy writers will point out that it is normal for subscription-based companies like Jive to lose money early on. They should take a look at the SG&A line, which has nothing to do with subscriptions, and watch how it has grown at the same rate as revenues.
Second, let’s see what users are getting from this. To do this, you need to absolutely tune out the white noise that comes from the press releases for users of Jive and other ESNs. There, all is good in the ivory tower.
But not on the ground, according to a study by the Altimeter Group.
On a four-point scale of satisfaction for a dozen key metrics *sarcasm* like “improve collaboration” and “share best practices,” not one scored over a 3. Over two-thirds of companies surveyed by Altimeter said their measurement of ESN's value was poor.
Right now, somewhere some corporate employee is Tweeting:
“Damn boss keeps telling us to use this bullsh&t social software during work hours. F&ck. Can’t people just call if they have something to tell you? Stop wasting my time.”