Workplace collaboration software: strategies for success

25th March 2020
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The COVID-19 pandemic is likely to cause a long-term shift in working practices, and has demonstrated that further investment is needed in technology, technology services and collaboration software to better enable remote working.

Once the initial crisis is weathered, we expect to see increased investment in digital transformation services, and investment across the underlying technology infrastructure. In this article, we explore what software providers can do to maximize growth opportunities.

As employees become increasingly distributed, and especially given the current COVID-19 situation, companies have been deploying new tools to ensure that their teams can collaborate internally and externally, no matter where they are.

In recent years, new entrants as well as industry giants, have been entering the marketplace. Microsoft, for instance, has bundled Microsoft Teams into its Office Suite as a free to use add-on making it easier for enterprises to adopt. Our research found that the number of active daily users rose from 13 million in July 2019 to 20 million in November 2019 and that 91 of Fortune 500 companies are now using Teams. This number grew yet again to 44 million active daily users as of 18th March 2020. Reuters reports that there was an increase of 12 million over around a week in March, as many companies asked employees to work from home.

Collaboration software, like Teams or Slack, can boost efficiency by facilitating internal communication, but, by itself it lacks the more nuanced capabilities which can drive further productivity in the workplace. As such, we are seeing partners working with technology vendors to develop additional functionality. By integrating with partner software, these platforms can form a conduit for external customer-facing dialogues as well. This model sees a foundational platform, like Teams, underpinned by third-party integrations that provide additional functionality beyond basic digital communication or file sharing, such as call routing and chat bots.

This means that instead of purchasing expensive and bespoked software to manage customer interactions, companies can instead purchase reasonably priced, off-the-shelf plug-ins which can be customised if needed. Our research reflects this, as it shows that the use of Microsoft Teams as a contact centre solution is in rapid growth – albeit from a low base – and that the market for collaboration software which can integrate with Microsoft Teams is also in strong, double-digit growth.¬

Our conversations with SaaS providers show that this area is ripe for growth. Teams is still in the early phases of adoption, but it will eventually fully replace Skype for Business (SfB), as SfB online is switched off mid-2021. SfB server remains supported into the mid-2020s, but many organisations are expected to migrate ahead of the deadline. Indeed, the current Covid-19 situation is acting as a catalyst for this. If providers can carve out a winning value proposition, they have the potential to access an established and globally growing client base. So, how can you ensure you are positioned correctly to benefit from this high-growth market? We believe there are three key activities that management teams should be considering.

Strategies for success

Know your vendor
Software providers should be assessing the priorities of technology vendors and aligning their strategy with them.

Becoming an accredited partner is essential for gaining access to a vendor’s inside track and first sight of their latest product updates. Having sight of the development roadmap enables you to adapt and pivot to complement – not compete with – the vendors’ products and services. Companies must understand their customers, identifying and then addressing potential client pain points that come with vendor updates.

Top vendor partners can even get additional funding, marketing support and leads from the technology vendors.

Continuously innovate
If your product integrates with that of another vendor, overbuild is an inherent risk. However, take comfort in the fact that many vendors’ priorities do not include building niche software. Instead, their focus is reaching the mass market efficiently. However, vendors will add new features and integrations over-time so software providers must continuously innovate, building value-added features into products. This opens up the potential market, while reducing the risk of overbuild.

Continuous innovation is also important in staying ahead of the competition. Not only can it add points of differentiation, it can increase customer engagement and stickiness.

Direct sales vs channel partners
Many successful software providers go direct to customers. However, when looking to scale, it might be beneficial to look beyond just direct sales to accelerate growth. Channels partners, particularly when entering new geographies or markets, can help to reduce the length of the sales cycle and cost of customer acquisition while vastly increasing the immediately addressable market. This might mean that you will need to give away some margin to incentivise channel partners, but this is often more than compensated for by additional revenue gained from an increased client base.

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