Social Software Industry. Firms Providing Social Software


Social software has in the last past years been an interesting phenomenon eliciting remarkable reactions from people everywhere because of the great changes it is causing in people’s lives. People everywhere are catching on quite fast to this new trend that is making their lives more and more interesting and fun. As a result a whole new industry formed comprising of the various firms that provide this software to the public to use. The aims of this report are to look at the social software industry as a whole and come up with a general and task environment analysis of the industry. It also aims at looking at one of the firms involved in providing social software picked at random from other firms in the social software industry and carry out an organizational analysis of the firm. This analysis will involve taking a strength & weaknesses analysis of the firm to establish how well it is fairing in the industry. This report will also include a business strategy of the firm picked above that is derived from the strength & weaknesses analysis carried out on it above.

Social software is a fascinating new trend that is causing ripples everywhere as people embrace it and get used to the profound impact it is causing on their lives. It is worthy to note how companies and organizations are dealing with social software in the workplace as they try to balance the effects of this software and

Environmental analysis

As times keep changing, so does technology thus resulting in new products being released to the market for use. Tony Byrne has described Social software as the tools that enable collaboration and networking that are used inside and outside of an enterprise. The networking and collaboration components are crucial to social software though a very thin line differentiates them. This is because one usually leads to the other and vice versa. Networking normally involves individuals and conversations while collaboration is involved with tasks and teams. Social software usually contains both the technological and social aspects. The social aspect is that it enables people to form social networks that form the basis of human relations. Social software enables people to work together creating a social scenario that allows work to be carried out as has been the case since time.

The technological aspect is that social software belongs to a broader phenomenon known as Web 2.0. This technology is referred to as the second generation of developing and designing the web. O’Reilly (2005) notes that Web 2.0 is a business revolution that is taking place in the broader computer industry that is arising as a result of the movement towards making the internet a platform.

General analysis

An analysis of the social software industry reveals that social software has tools and services.

  • Services include the following: Instant messaging, Information sharing, Social ranking, File sharing , and Web conferencing.
  • Tools include the following: Wikis, Blogs, and Portals.

The analysis also reveals that these tools and services overlap each other in their usage even though they usually fulfill different purposes. it also reveals that there is no firm in the industry that excels in its provision of all services but succeeded in the provision of one of them. As a result there exists a suite versus best application debate that is centered on finding which model of offering services is better than the other.

The analysis reveals that two scenarios are evident regarding how business enterprises are using social software. The two scenarios are:

Internal Scenarios

This scenario is involved with actions that take happen at the back of the enterprise’s firewall. Internal scenarios compose of: Project collaboration, Enterprise collaboration, Enterprise discussion, Knowledge base management, Enterprise networking and Information organization.

External Scenarios

This scenario is involved with activities that take place out of firewall.

These scenarios compose of the following: Partner collaboration, Professional networking, Customer communities and Customer interactions.

This analysis lastly reveals that the industry is divided according to the type of companies and the products they offer. The following is a breakdown of this division:

Platform vendors

These are big software firms that provide several kinds of software together in one bundle. Examples are Google, Microsoft, IBM, and Oracle.

Social software suites

These are first that offer the individual social software applications together as one product. Examples are Drupal, Awareness, and Connectbeam.

Software Appliance

Jive Software, Traction Software.

Wiki software

Wikis are pages that are online on the web that a visitor on the page can edit the information contained therein. Examples are Atlassian, MediaWiki, and Socialtext

Blog software

They are similar to journals that are online and used by one person to give his own views or comments. Examples are Six Apart Automattic, Google

Public networks

These are firms that offer social networking services over the internet with the software that they make an offer to the public. Examples are LinkedIn, Facebook, and XING.

Task environment analysis

This is an analysis of the external environment surrounding the social software industry. It involves the factors affecting a firm from outside of which it has no power over but considers them and works with in order to achieve its goals. The main existing factors that would exert substantial influence on this industry are Suppliers, Competitors, Potential entrants, and Consumers.

Potential Entrants

Potential entrants to the social software industry are up coming startups that will offer this kind of software that already existing firms in this industry are offering. Potential entrants could be firms that are in the broader software industry but decide to venture into the social software industry for example, Microsoft offering Wiki software.


Firms already in the social software industry offer almost similar products in the various divisional parts that exist in this industry thus becoming competitors for the same consumers. A firm may also decide to provide a new software product that will substitute another already present product in the market. A competitor may also offer the same product as another firm but of a higher quality forcing the other firm to equally offer services of the same or better quality. An example is when Atlassian offers improved wiki software over its competitor Mediawiki which could substantially lead Mediawiki out of business.


The major consumers in this industry are people and firms who use social software and thus offer a means for these firms in the social software industry revenue and profits. Individuals use social software to network with their friends while employees in firms could use it for collaboration purposes.


Suppliers in the social software industry include employees who provide labor and expertise in making social software in addition to other support staff. Suppliers also include business firms that provide services that enable a firm to run such as financial, insurance, transportation, and communication.

The task environmental analysis of the social software industry reveals that firms in this industry have to operate together with other players inside and outside the industry. The task environment includes those factors that a firm cannot control on its own but must work together with them so as to achieve its goals. Suppliers in this industry offer necessary services to the firms in this industry which are required for them to run efficiently accomplishing their intended goals. Consumers of products in this industry provide revenue to these firms through using or buying these products.

They ensure that these firms get money to continually have their processes running and make profits from their ventures. Competitors in this industry will try to keep ahead of each other since they all aim at serving the same consumers hence will continually produce products and offer services that are of high quality so as to maintain one’s market share. Since potential entrants will offer similar services like those offered by the already existing firms, those already in the industry will strive to get aware of their consumer needs and provide services that match these needs. In addition firms in this industry will set standards among themselves concerning how their industry will be working. This will put barriers to entry against firms that don’t meet these standards ensuring continuous quality of services offered to people.

Background Information

In this section we will look at a the firms that provide social software to people. We will center on Facebook. It is leading in the most people visiting the site outperforming its main competitor My space. It has been ranked the 7th most visited site on the web worldwide. Facebook began in February of two thousand and four and its users have grown over time in leaps and bounds. The name Facebook is gotten from Facebook papers that were used to identify new staff, students and faculty who had recently joined a college in some United States colleges. Facebook was a project which was kick-started by a man known as Zuckerberg Mark, he was an intelligent scientist at the Harvard University, he together with other friends come up with the gigantic idea of inventing the famous Facebook. At that particular moment face book was only limited within the college. Its membership was then extended to include students in colleges in Boston, and Stanford University. In 2007, it was opened to all people in the world tripling its membership. At this particular moment the Facebook social tool is proud of having over two hundred million users spread everywhere

. The Face book Company is an active firm and has above seven hundred employees who are always busy to ensure the swift running of the corporation. The Facebook project got its initial investment to the tune of 500,000 US dollars from Peter Thiel, a co-founder of Paypal in 2004. The following year, it received 12.7 million US dollars from Accel Partners, a venture capital company. This was followed by 27.5 million US dollars from the partnership firm Greylock partners. In the October of 2006, Microsoft acquired 1.6% of Facebook at 240 million US dollars. The management board comprises Zuckerberg, Thiel, Jim and the founder, it is also an active member of Accel Partners. It also comprises Sze David, who is an active partner at the famous Greylock Company/ Partners and also incorporates Mr. Madera Paul from a company known as Meritech. Facebook ranks as one of the most visited websites on the internet.


  • Community. Facebook has in fact focused greatly on the notion of the community over the individual. The rest of social networking sites are focused on the individual
  • Stickiness. Facebook is noted to be very addictive. People are always keeping in touch with other individuals and getting updated on their endeavors.
  • Semi-synchronous messaging. Chat and messaging require your full involvement in order to sustain meaningful conversation.
  • Canvas. Facebook is very easy to use especially with the intricacy that makes it good-looking for supremacy user personalities.
  • An open platform. Facebook enables people to exhibit their feelings and contacts, it also makes data available for other applications to use.
  • Third-party applications. There are organizations, firms and companies that have their businesses entirely dependant on Facebook. Facebook provides these companies a dedicated platform to initiate and run their applications.
  • Popularity. Facebook is one of the hottest things on the Internet with everyone wanting to be part of this success story.
  • Easy usage. Facebook is easy to use even for a new member to the site.
  • Linkage to other sites. Facebook offers easy-to-follow links to other sites on the World Wide Web.


  • Adding Applications. It’s usually hard to add applications. Facebook allows its members to build applications through a developer kit that they have on the site.
  • Steering. Facebook has many portals and at times it gets hard to navigate through them.
  • Numerous applications. Facebook has very many applications some of which have been developed by members on the site. This may present a problem on which application one should use from the vast number of applications available.
  • Messaging instantly. Facebook has an instant messaging application but that is rather substandard compared to others offered in the market.
  • Lacking profile linkage. Facebook lacks an application that enables the linking of profiles within social networking sites.

Business Strategy

In this section we will look at the business strategy that Facebook has developed in order to carry out its business competitively than its peers. Face book is a Web 2.0 business that has adopted a model of Business-Consumer in their business. It utilizes both mobile and peer-to-peer technologies to provide a social network that is easy to get to at any location, internationally. It ranks as one of the most visited sites worldwide making it very popular. Though it is used worldwide by all people it seems that it has cut for itself a niche market that comprises college students who are by far more internet users than other groups of people.

The Strategy of Facebook

User base increment

Its first and leading strategy is to have its customer base increase drastically. It has a great application that allows people already on its site to invite other people who aren’t on facebook. Since people always apply this services and get into the company for free in itself plays a very major role in making the enrolment rates grow at a very fast rate. These people will then invite their friends who in turn invite their friends creating a never-ending chain reaction that results in many people using it.

Increment of Profits

This involves controlling the existing platform and finding innovative ways to make money. Facebook usually gets to meet its financial goals through the active advertisements which the company involves into its larger customer base. Marketing solutions that facebook offers are based on a company’s size and budget making it a better marketing destination over its competitors Uphold and develop leadership in the social networking site business

Market leadership

This involves coming up with ways that will enable it efficiently compete with other firms that offer similar online content and products which users spend their time and money on. As a market leader it hopes to hold on to this position and as a result it aims at developing new applications and services that will continually place it at the top over its peers.


Mobile telephony: With the upsurge of mobile gadgets that are able to contact the internet, Facebook should ensure that it is accessible through these gadgets so as to expand its coverage worldwide and enable remote access.

People-centered. With people joining every day on Facebook, it can become the one-stop site for all your social networking needs where you will meet with all the people you would meet with.

Improving on technology: It should develop its platform, which should have security and supports inter-operation. It should also allow other people to put up their own applications in a faster and reliable way.


It should continue to position itself as a market leader, not only as a social software site but also as the best around through offering better services that are fast and reliable compared to its competitors.

Language: It could offer its site in other languages not only in English so as to add to its current membership and consequently increase its market rating as the best-preferred site for social networking over its peers.

Competitive advantage: It has a competitive advantage over its competitors and potential substitutes. It is always a step above its competitors in developing new technologies that cater to consumer needs making it a better choice for most people than its competitors.


Innovative competitors: Facebook should be well informed of its competitor’s activities so as to be aware of their activities and develop advanced products that could ensure that its leadership

Privacy: On Facebook, other people can view one’s information and could use it for evil or illegal purposes.

Losing interest: Due to the constant changing of its layout and look, it could lose its appeal to people as they are not given time to know the existing layout yet it has already been changed to something else.

Handling growth: Its membership has been growing over the recent years and it could reach a number that could pose a problem on how to manage it especially with regards to privacy.


This report set out to look at the social software industry players and their environment. I have found that this industry is a technology based one with the firms involved offering their services over the internet. There are firms that offer single products while others offer a suite of products leading to a suite versus best product debate. Another finding is that business enterprises have to decide on the best social software service that best fulfills their needs. A task environment analysis reveals that suppliers, competitors, potential entrants and buyers/consumers are the environmental factors affecting this industry. Having scrutinized one of the firms in this industry, Facebook, I have recommended that it should add new variants of its products that if offers, take privacy issues seriously and come up with new ways of generating revenue.

The firm should take note of the need to develop more innovative methods and ways to make income other than solely rely on advertising alone. Trying to create revenue through advertising only is putting it on the disadvantaged side compares to other sites that are using several ways of raising revenues. The firm should uphold high privacy levels of its user’s personal data which they are required to fill as they sign up at the site. With the ongoing debate on privacy on the internet, it is of importance to uphold privacy of a person’s data to avoid it from being used by other people for unlawful undertakings. The firm should look into new ways of adding new variations of its products to allow its users to use the one that best meets their ideas or the one that they find easier to use. This will ensure that competitors don’t take up their market share of customers. As a market leader it should strive to maintain that share for continued revenue generation.


Byrne, T. (2008), Enterprise Social Software Technology, KM World, 17(8):8-32.

CMS Watch (2001), Social Software Suites, Web.

O’Reilly, T. (2005) “Web 2.0 Compact definition trying again”.

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