Weekly Update

What today’s messaging surge means for the enterprise

Last week, Mary Meeker revealed the newest in her annual Internet Trends reports, this one for 2014. The big news? Mobile and tablets.

Mobile — Mobile phones are now in the hands of 73% of the world’s population, and smartphones are now at 22%.

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Perhaps more foundational: Mobile use of the web is now 25% of total, up from 14% year over year.

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Tablets — Added together the data about mobile and smartphones represents in a startling shift. But the astonishing rise of tablets is perhaps as pivotal. Tablets increased 53% in 2013 alone: the fastest adoption of new technology, ever.


The first order effects of this tectonic shift in computing will show up in how businesses try to connect to customers, consumers, and — for media companies — the people formerly known as the audience. And internet advertising is still growing — up 16% overall year over year — but mobile advertising grew 47% to reach 11% of the total advertising market. Obviously, that is still lagging, but shows real upside.

But I am less interested in those sorts of revenue figures: advertising isn’t my beat. But the trends in messaging services are a harbinger of what is coming in the world of business.

Just six selected over-the-top messaging services (OTT means they run over web data connections or wifi, not carrier provided messaging services like SMS) have grown to tens of billions of messages per day, and over a billion active users.

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Meeker makes a really smart analysis of this trend, and contrasts it with services like Facebook: people are transitioning to messaging tools geared toward frequent communication with a small group of contacts — or what I have been calling communications with a set — and moving away from broadcasting messages to large audiences — like Twitter and Facebook — which is communication with a scene, in my terms.

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As Meeker describes it, this means the action is moving from supporting sets and away from scenes, where the value of the network is not principally about the number of nodes, but the number of sets and the amount of messaging going on. (Note that this sounds like a rediscovery of Reed’s Law, which states that the utility of a network grows exponentially over the number of nodes, based on the number of groups that form.)

In the consumer web, this shift is going to pose interesting challenges for businesses and advertisers, because users will be less willing to accept ad tracking, or ads at all, in what they generally consider a private context for communications in sets.

Implications for work technology — Meeker’s analysis lines up with trends we have been seeing in our own research regarding the increasing rates of adoption for mobile and set-based, OTT messaging. And in the context of work technology, the same drivers — the rise of mobile and tablets, the inclination away from large-scale, scene-oriented messaging — will play out in a similar manner to the challenges now confronting Facebook and Twitter. Except in the work technology market, it is the broadly horizontal enterprise social networks that are likely to see defections as people shift to more narrowly focused messaging apps.

As a result, witness the slowing growth and mounting losses for companies like Jive, and companies like Cisco drop their internal work management products (see  What does the Cisco/Jive partnership mean?). Established work management solutions that are one element of a range of work technology in larger companies — like IBM Connections, Citrix Podio, and Microsoft’s Yammer — will be shielded from this transition longer than independents, but the change is coming. Tools like Slack (see It’s getting even more real time: Slack and Skwiggle), Convo, and Glip, which are conversational in their foundation, will begin to bleed away users from the collaboration vendors, and then I think we’ll see a big swing towards conversations, away from heavy, systems-of-record feeling collaboration tools.

Focused independents, however, will likely ride this wave. Consider Atlassian, who acquired Hipchat and so now have their own set-oriented chat solution, and whose work management solution starts with a focus on supporting developers building software. That is their beachhead, and then their products spreads out past development.

For those that are watching closely, this transition is already in motion, and will lead to a dramatic recast of how work gets done in the business of 2015. More sets, and less scenes; more chat, less posting; more time spent with smaller networks, less messaging across large networks.

A faster and looser sort of business, the sort of business where change can happen faster, where ideas can spread more quickly, and where innovation is happening close to the edge, where individuals meet and mix.