Predictions for the Asia Pacific Contact Center Market in 2011
2010 was an interesting year for the contact center industry in Asia Pacific. The first half of the year was slow and saw limited growth in investment in technology and seat expansions. However, the second half seemed to be much better and pushed the entire year into steady positive growth. Despite several trends being subdued as enterprises made a cautious return from the global financial crisis, we saw increased activity in the areas of Self-service, Analytics and leveraging Social Media for customer service. As we enter the new decade, Frost & Sullivan believes that these trends will be the driver for increased investment in Contact Center Applications.
This insight attempts to discuss the top industry trends in 2011 that are impacting contact centers across the world and especially in Asia Pacific.
1. Return to Customer Acquisition
The theme of customer acquisition will drive investments from contact centers in the region in 2011. This could lead to simply expanding contact center seats, to investing in advanced outbound dialers, or investing in Analytics to help fine-tune sales strategies.
While 2009 & 2010 were dominated by the “More with Less” or like I would put it “More with Lesser” theme, Frost & Sullivan believes that decisions on technology in 2011 will be determined by the need to grow faster and acquire more customers. This does not mean that contact centers will suddenly find an extra pot of cash and hence the need to optimize operations goes away, but the priority of investment will shift towards growth-aiding technologies or processes.
2. Analytics
Reporting has always been a key element of the contact center. Analytics is the next step for contact centers to improve operations and drive customer satisfaction. Contact Centers are struggling to keep up with the changing customer expectations and maintaining satisfaction levels. Analytics promises to deliver improvements in operations, quality processes and customer satisfaction. The bigger promise in my opinion is that Analytics gives the contact center the rare chance to be a Strategic part of the organization, not just a Profit center or Cost center.
Speech analytics technology is maturing and we are beginning to see deployments in Asia Pacific. Though most deployments are still for the English language, we are beginning to see some pilots for non-English languages as well.
Using a combination of speech analytics with data & screen capture analytics, contact centers can not only identify root cause for certain operational bottle-necks or hone directly into the “bad” calls which led to customer churn, but also deliver insights back to the enterprise on competitive deals, product enhancements and marketing effectiveness. Life no longer is about “90% of calls in 30 seconds” but instead looking at the top reasons for customer churn, hence, shifting the image of the contact center to a Strategic part of the enterprise.
3. Contact Center in the Cloud
The last 18 months has seen a significant increase in interest from enterprises to look at Cloud-based alternatives for many IT applications and systems. The value proposition of Cloud-based Contact Center Applications is just as valid as it is for Business Applications such as CRM and Salesforce Automation.
Hosted Contact Centers have been around in Asia Pacific for a few years, and have seen limited success so far. By the end of 2010, we expect over 93,000 hosted seats in the Asia Pacific region. There is strong interest from Telecom Service Providers to offer Hosted Contact Center solutions, and offer bundled packages of Communications & Network Services with Contact Center Application Delivery. Telecom Service Providers in many markets have shown interest and already have a Hosted Contact Center offering. The demand for such services so far has been lukewarm due to the lack of good case studies on the success of such a model and perceived issues with security and lack of control.
The push towards Cloud-based services across Software-as-a-Service, Platform-as-a-Service and Infrastructure-as-a-Service, and the strong benefits that many enterprises are realizing by moving to such a model coupled with the strong validation of the Cloud model by vendors such as Microsoft, IBM, Cisco, Salesforce.com is making CIOs consider Cloud alternatives for a portion of their IT investments.
Apart from local Telcos and Global Service Providers such as BT, some large System Integrators are also looking to start a Cloud service practice and offer a Cloud-based Contact Center solution. In 2011, we expect the momentum for such services to pick up, and drive adoption especially in the markets of Australia, India, Japan, Taiwan and parts of South-East Asia.
4. More Self-Service
Self-service as a trend is more pronounced amongst Generation Y, and given that Asia Pacific has large Gen-Y population, the need to have good self-service channels is critical for most contact centers. The trend towards Self-service is not limited to just IVRs (Integrated Voice Response), but focused increasingly on Web self-service and Mobile self-service.
There is a strong push towards using IVR as a call resolution platform instead of just a call routing tool. There is strong growth in consulting services to identify processes and transactions that can be pushed to an IVR. Markets such as India, China, and Indonesia are expected to see strong growth in IVR adoption.
2011 will continue to see investments in IVRs and Voice Portals, and we expect the IVR market to grow at double digit growth rate in 2011 in the Asia Pacific region.
5. Mobile Customer Care
Smart phone adoption has sky-rocketed in the Asia Pacific region. Mobile Broadband is changing the way consumers are accessing information, using the internet and expecting service. Mobile Applications is redefining customer expectations and is creating yet another degree of separation between the customer and the traditional call center.
In 2011, we expect to see leading enterprises in the Asia Pacific region launch Mobile Applications to deliver differentiated customer experience, and link it with the rest of the contact center.
6. Investments will begin to trickle in for Social Media Applications
2010 was the year of experimentation with social media for customer service. Telcos, Banks and Hotels setup small teams of 3-7 people who would spend their time “listening” to the different social channels, and “selectively responding” to customers. Some companies took a physical world view to the web 2.0 world by operating their twitter responses from 9 AM to 5 PM. Others chose to just listen in and not respond, while very few took a holistic approach to listening, participating and being pro-active on this channel.
Due to the experimental nature, there was little if any investment on social media tools. In 2011, however, as companies get more serious about Social Media and as the trend of Social media continues to be strong, we expect more effort from contact centers in trying to manage this new channel for customer engagement.
There are still many issues with adoption – who should take ownership (is it Marketing or Customer Service?), who decides what to write on behalf of the organization (any legal implications?), what will be the volume of interactions that I need to handle on social, how do I operationalize this new channel with the rest of the contact center, or just plain fear that once you get in, you can’t get out! Efforts on educating the market will need to continue, and we expect real investment on social media tools to begin in 2011.
7. Multi-Channel
Perhaps very Old School for many markets, but given the diverse nature of Asia Pacific we believe that there is still going to good amount of investment in offering a multi-channel service to customers. Markets such as Indonesia, Vietnam, Thailand, India and China will see good investment in this area.
More mature markets such as Australia, and parts of the Indian contact center industry will look at ways to better integrate the different channels and provide a seamless and consistent experience across the different channels.
Investments in SMS based notifications, Email and Web Chat will continue to be strong in 2011.
8. Domestic Outsourcing
The strong growth in the Asia Pacific Contact Center industry in the past decade was fueled in a large part by the trend of offshoring and offshore outsourcing. Markets of India and Philippines have seen significant growth over the last decade on the back of this trend.
Although offshore contact center outsourcing still dominates the market in India, the last 24 months has seen a strong growth in domestic outsourcing i.e. companies in India outsourcing their contact center work to Indian outsourcers. This trend is not limited to India, but is also happening across Australia, China, Indonesia and Japan.
The shift from Offshore Outsourcing to Domestic Outsourcing has implications on the cost per seat and hence the cost of technology that these outsourcers will be able to afford, however, given the large scale of business, there is a strong upside in the market due to increased investment from Outsourcers driven by the opportunity in the domestic markets of Asia Pacific.
9. Extension into the Enterprise
There are two ways in which we are seeing the extension of the contact center into the enterprise.
A) Leveraging the larger enterprise workforce as part of the customer service process. This could include enterprise experts who are more empowered than agents to help with call resolution, or leveraging branch workers and remote workers as contact center agents during certain downtimes at the branches. Unified Communications tools such as Presence, Instant Messaging (IM) and Conferencing are being deployed in order to enable such capabilities.
In 2010, the adoption of Unified Communication applications in the Contact Center was in early stages, however, as Banks, Telcos, Retail companies begin to deploy Unified Communications in their enterprise, extending those applications and capability to the Contact Center will also become important.
Apart from extending to enterprise experts, in 2011, the trend towards remote agent is expected to show some growth in select markets of the region, especially Australia.
B) Extending Optimization tools to the Back-office. The contact center has invested significantly over workforce management & performance management tools that have led to increased efficiency in the contact center. The back-office operations in the enterprise have similar operational challenges as the contact center, and are beginning to see merit in adopting Workforce Optimization tools that are used in the Contact Center, for their back-office operations.
In 2011, we expect to see more adoption of such tools in the back-office coupled with work flow management applications as well.
10. Video in the Contact Center
I thought for a while before I decided to include Video as one of the key trends in 2011. As of 2010, the vision of a Video Contact Center was barely existent in the Asia Pacific region with the exception of a couple of deals in markets such as Korea. In 2011, we still do not expect any significant investment in video yet. However, we will begin to see video applications on smart phones and tablets begin to emerge which will require Heads of Customer Service to rethink their stance on a Video-based customer service models.
With 3G penetration rising in Asia Pacific and more smart phones and tablets with 2-way video capability, the chances of having a customer service application that incorporates video capability is not too much of a stretch. However, any main stream adoption for video in the contact center might not happen until the second half of 2012 or 2013.
In 2011, Frost & Sullivan expects the Asia Pacific Contact Center industry to have close to 30,000 contact centers with more than 2.4 million seats, and the Contact Center Applications market to grow in the range of 9 – 11 % to reach close to US$ 800 Million in revenues.
Showing posts with label Prediction. Show all posts
Showing posts with label Prediction. Show all posts
Tuesday, January 25, 2011
Tuesday, February 23, 2010
UC Trends in 2010
Unified Communications (UC) entails unifying the different communication applications such as voice, email, instant messaging, conferencing & collaboration to deliver productivity gains for the users, better team collaboration and increased agility for the enterprise.
The ultimate aim of unified communications is to embed communications into business processes to deliver quicker and better decision making, enhanced collaboration across geographically diverse teams, and to improve overall efficiency in the business process to make the enterprise more agile and competitive. In order to achieve this, the multiple communication applications that operate in complete silos need to be integrated with one another, and also integrated with business applications.
Key Highlights for UC Market in 2009
From the get-go it was clear that 2009 was going to be a tough year for most industries, and the Unified Communications market was no exception. Given the recession and lower IT spending by enterprises, the Unified Communications market expecting a decline of 6.6 percent over 2008.
2009 saw a significant drop in spending on telephony infrastructure, with the telephony market expected to decline by over 30 percent over 2008. Apart from a slowdown in spending, price erosion also contributed to the overall revenue decline in that market.
The year saw creative financing schemes, attractive migration programs, aggressive application bundling and competitive pricing in the market. While many enterprises did bite into these vendor initiatives, others decided to put some of their infrastructure decisions on hold or delay them by a few quarters.
The silver lining for the Unified Communications industry was the Conferencing & Collaboration market is expected to see a strong growth of 13.1 percent in 2009. The recession brought along with it travel budget cuts which meant more investment in collaboration software and services.
As predicted last year, consolidation in the vendor landscape continued in 2009 with Avaya acquiring Nortel Enterprise, and more recently Logitech-LifeSize, and Cisco-Tandberg. The impact of all of these acquisitions will be felt in 2010.
Predictions for UC Market in 2010
2010 is expected to show some recovery and enterprises are expected to refresh their communications infrastructure and adopt Unified Communications. Frost & Sullivan expects the Unified Communications market in Asia Pacific to grow by 4.4 percent in 2010.
We believe that communications in 2010 and beyond will be increasingly:-
•Rich Communications – Communications in 2010 will be increasingly rich with Video. Growth in Video is expected to be in excess of 16 percent in 2010. Adoption of video conferencing has been on the rise in the Asia Pacific region. TelePresence market has shown good take-up from large enterprises, while boardroom and desktop video solutions are also seeing penetration across enterprises.
•Collaborative Communications – Collaboration is a top-of-mind priority for most CIOs and investments in technology that enables their enterprise to be more collaborative, and agile are of high interest. Web conferencing has seen strong growth over the last few years, and is expected to see a growth over 25 percent in 2010. For most enterprises, moving towards Unified Communications entails embracing a more collaborative communications environment, be it via audio conferencing, web conferencing or simple the ability to connect with the person at the right time on the right device through their Presence status. Enterprise Instant Messaging application is also expected to see continued growth in 2010. Solutions such as Google Wave, which brings together elements of Email, Instant Messaging and Collaboration, will make some impact on the market in 2010, although mainstream adoption of such solutions would only be in a 2011-2012 time frame.
•Social Communications – A more recent trend driven by consumer adoption of web 2.0 applications such as social networking. The idea of having a Facebook-like application for the enterprise was being discussed for the last 12-18 months, and in recent weeks we have seen announcements by vendors such as Cisco and Salesforce.com to offer enterprise social networking based collaboration platforms. Players such as IBM, Cisco and Salesforce.com, as well as other niche players are participating in this new market place.
Using social media for customer communications and customer service is expected to gain traction in 2010. Given the nascent stage of the market, the adoption of enterprise social collaboration platforms might be limited in 2010, however awareness and education amongst enterprises is expected to increase. Leveraging social media for customer service is expected to see some traction in 2010.
•Cloud-based Communications – Communications is increasingly moving to the cloud. Adoption of UC-as-a-Service picked up steam in 2009. Local as well as Global Service Providers have become aggressive with their hosted communications service offerings such as Hosted PBX, Hosted Conferencing and Hosted Messaging. Pure play conferencing service providers such as Intercall, Cisco Webex, Premier Global Services have seen good growth in 2009, and are continuing to see interest from enterprises. Hybrid deployment models of On-Premise and In-the-Cloud will emerge in 2010 and enterprises will choose which applications will be on-premise and which ones should be in the cloud. Vendors such as Cisco, Avaya, Alcatel-Lucent, Mitel are working with service providers to deliver their solutions on a hosted basis. Microsoft is expected to launch Microsoft Online in Asia Pacific in 2010, further spurring the market place.
•On-the-go Communications – Mobility continues to be a business need and adoption of mobility solutions is expected to continue in 2010. Solutions that provide the ability to access all forms of communications from the mobile device are expected to grow in 2010. Soft phone clients on mobile devices, to mobile collaboration clients and mobile email are seeing good traction in the market. As the end-point evolution continues from analog phones to digital phones to IP phones, today the user has the option for a hard IP phone on the desk, soft phone on the desktop and soft phone client on the mobile. While the hard phone on the desk might still be prevalent for the next 2-3 years, the adoption of soft phones is seeing strong growth in Asia Pacific.
Core communication applications such as IP telephony and Email will see flat to marginal growth in 2010. IP migration projects will renew in 2010, and growth is expected to return to the IP telephony market, but price points would still be under pressure. Commoditization of these core communication applications will continue in 2010, and focus on applications will be important.
According to Frost & Sullivan, the Unified Communications Market Opportunity* in 2010 is expected to be worth slightly over US $4.45 Billion, growing at 4.4 % over 2009.
*Note: UC Market Opportunity includes Enterprise Telephony, Email, Instant Messaging (Unified Client), Unified Messaging, Conferencing & Collaboration (Audio, Video & Web), Mobility, Presence & Integrated UC Applications, and Core Contact Center Applications.
The ultimate aim of unified communications is to embed communications into business processes to deliver quicker and better decision making, enhanced collaboration across geographically diverse teams, and to improve overall efficiency in the business process to make the enterprise more agile and competitive. In order to achieve this, the multiple communication applications that operate in complete silos need to be integrated with one another, and also integrated with business applications.
Key Highlights for UC Market in 2009
From the get-go it was clear that 2009 was going to be a tough year for most industries, and the Unified Communications market was no exception. Given the recession and lower IT spending by enterprises, the Unified Communications market expecting a decline of 6.6 percent over 2008.
2009 saw a significant drop in spending on telephony infrastructure, with the telephony market expected to decline by over 30 percent over 2008. Apart from a slowdown in spending, price erosion also contributed to the overall revenue decline in that market.
The year saw creative financing schemes, attractive migration programs, aggressive application bundling and competitive pricing in the market. While many enterprises did bite into these vendor initiatives, others decided to put some of their infrastructure decisions on hold or delay them by a few quarters.
The silver lining for the Unified Communications industry was the Conferencing & Collaboration market is expected to see a strong growth of 13.1 percent in 2009. The recession brought along with it travel budget cuts which meant more investment in collaboration software and services.
As predicted last year, consolidation in the vendor landscape continued in 2009 with Avaya acquiring Nortel Enterprise, and more recently Logitech-LifeSize, and Cisco-Tandberg. The impact of all of these acquisitions will be felt in 2010.
Predictions for UC Market in 2010
2010 is expected to show some recovery and enterprises are expected to refresh their communications infrastructure and adopt Unified Communications. Frost & Sullivan expects the Unified Communications market in Asia Pacific to grow by 4.4 percent in 2010.
We believe that communications in 2010 and beyond will be increasingly:-
•Rich Communications – Communications in 2010 will be increasingly rich with Video. Growth in Video is expected to be in excess of 16 percent in 2010. Adoption of video conferencing has been on the rise in the Asia Pacific region. TelePresence market has shown good take-up from large enterprises, while boardroom and desktop video solutions are also seeing penetration across enterprises.
•Collaborative Communications – Collaboration is a top-of-mind priority for most CIOs and investments in technology that enables their enterprise to be more collaborative, and agile are of high interest. Web conferencing has seen strong growth over the last few years, and is expected to see a growth over 25 percent in 2010. For most enterprises, moving towards Unified Communications entails embracing a more collaborative communications environment, be it via audio conferencing, web conferencing or simple the ability to connect with the person at the right time on the right device through their Presence status. Enterprise Instant Messaging application is also expected to see continued growth in 2010. Solutions such as Google Wave, which brings together elements of Email, Instant Messaging and Collaboration, will make some impact on the market in 2010, although mainstream adoption of such solutions would only be in a 2011-2012 time frame.
•Social Communications – A more recent trend driven by consumer adoption of web 2.0 applications such as social networking. The idea of having a Facebook-like application for the enterprise was being discussed for the last 12-18 months, and in recent weeks we have seen announcements by vendors such as Cisco and Salesforce.com to offer enterprise social networking based collaboration platforms. Players such as IBM, Cisco and Salesforce.com, as well as other niche players are participating in this new market place.
Using social media for customer communications and customer service is expected to gain traction in 2010. Given the nascent stage of the market, the adoption of enterprise social collaboration platforms might be limited in 2010, however awareness and education amongst enterprises is expected to increase. Leveraging social media for customer service is expected to see some traction in 2010.
•Cloud-based Communications – Communications is increasingly moving to the cloud. Adoption of UC-as-a-Service picked up steam in 2009. Local as well as Global Service Providers have become aggressive with their hosted communications service offerings such as Hosted PBX, Hosted Conferencing and Hosted Messaging. Pure play conferencing service providers such as Intercall, Cisco Webex, Premier Global Services have seen good growth in 2009, and are continuing to see interest from enterprises. Hybrid deployment models of On-Premise and In-the-Cloud will emerge in 2010 and enterprises will choose which applications will be on-premise and which ones should be in the cloud. Vendors such as Cisco, Avaya, Alcatel-Lucent, Mitel are working with service providers to deliver their solutions on a hosted basis. Microsoft is expected to launch Microsoft Online in Asia Pacific in 2010, further spurring the market place.
•On-the-go Communications – Mobility continues to be a business need and adoption of mobility solutions is expected to continue in 2010. Solutions that provide the ability to access all forms of communications from the mobile device are expected to grow in 2010. Soft phone clients on mobile devices, to mobile collaboration clients and mobile email are seeing good traction in the market. As the end-point evolution continues from analog phones to digital phones to IP phones, today the user has the option for a hard IP phone on the desk, soft phone on the desktop and soft phone client on the mobile. While the hard phone on the desk might still be prevalent for the next 2-3 years, the adoption of soft phones is seeing strong growth in Asia Pacific.
Core communication applications such as IP telephony and Email will see flat to marginal growth in 2010. IP migration projects will renew in 2010, and growth is expected to return to the IP telephony market, but price points would still be under pressure. Commoditization of these core communication applications will continue in 2010, and focus on applications will be important.
According to Frost & Sullivan, the Unified Communications Market Opportunity* in 2010 is expected to be worth slightly over US $4.45 Billion, growing at 4.4 % over 2009.
*Note: UC Market Opportunity includes Enterprise Telephony, Email, Instant Messaging (Unified Client), Unified Messaging, Conferencing & Collaboration (Audio, Video & Web), Mobility, Presence & Integrated UC Applications, and Core Contact Center Applications.
Friday, January 22, 2010
EnterpriseBook - Facebook for the Enterprise?
Imagine that a Sales Manager gets a notification that says "Opportunity X has moved to the next level. $250K". The Sales Manager "comments" on that update asking for some details. The "comment" gets sent to the sales person who entered that opportunity X, and can then address those questions. Based on the responses, the sales manager also "recommends" a "group" that focuses on such specific deals. The Country Manager "likes" the update to keep the sales person motivated and also subtly informing him that he is aware and can make himself available if the need arises. The Country Manager can also "follow" this opportunity so that he gets any updates to this particular deal.
You get the idea. Taking Facebook & Twitter and creating an Enterprise focused social networking solution. There are many questions that come to mind when you think of such a solution -
does it replace email, instant messaging or team workspaces or is it a new medium altogether?,
will it improve productivity or reduce it?,
with so many emails to respond to already does this application require me to update-on/respond to/take-note-of all "updates" and activities?,
would this only be restricted to the enterprise, or can partner companies also join the network?,
what impact does it have on storage needs, security needs, content management, etc?
Instead of trying to address all these questions, lets evaluate the potential benefits of such an application. In order to do that, let's analyze what happened in the consumer world with Facebook & Twitter. What benefits did Facebook bring to consumers, what existing communication channels did it replace? I don't think Facebook replaced Email but yes, it definitely would have replaced the number of emails that people sent to their friends & family. I don't think Facebook replaced Instant Messaging, but Facebook realized that it is a complimentary communication channel and it has added that capability to its website. Facebook did definitely challenge a Flickr, as many people just upload their photos to Facebook now instead of doing it separately to Picassa or Flickr. Facebook improved our ability to "connect" with our friends, even though we could not meet often in the real world. Facebook gave users the ability to know what was happening in their friends life, and they could just share their life-happenings on Facebook knowing that their family & friends would get to see/read about it (maybe reducing some IDD phone calls here). Facebook didn't replace blogs, but made it a feature for users to be able to share "notes". In a nutshell, Facebook did a bit of everything and provided a single platform that was social in nature, and could be viewed by friends & family.
If we take this to the Enterprise, a Facebook-like application or what we might call an Enterprise Social Networking solution would not necessarily replace Email, Instant Messaging or Workspace. But it could become either a platform through which all these can either be accessed and complimented by the features such as status updates, rating/tagging, etc. or a platform that can be used to offer a Email-like, IM-like, Workspace-like environment. The important thing in both scenarios will be that this platform will be a "social" platform.
The obvious benefits of such a solution would be better information sharing across teams in the enterprise, better knowledge of what's happening in the enterprise, better connect with employees (especially in geographically dispersed teams) improving collaboration amongst teams, and providing a communications platform that is social, increasingly popular and partly informal.
An Enterprise Social Networking (ESN) solution could possibly be an addition to the existing communication channels that exist within an enterprise. What I believe will become important for ESN is that it could become an integration portal or access portal for other communication channels, a bit like IM on Facebook, Messages (Email) on Facebook, etc. It doesn't take a rocket scientist to figure that you could add voice capability & web conferencing as an application to ESN as well. What could start as a new communication channel, eventually has the potential to be a communication platform that can truly connect the other communication channels and deliver a quasi-UC (Unified Communications) experience.
Whether or not ESN will become popular in the enterprise can only be decided once the solutions from players such as Cisco, Salesforce.com, IBM, etc. get into the market, and how enterprise CIOs react to these. There is a bit of a precedence for ESN in the way Instant Messaging is becoming popular in the enterprise now. Starting as a consumer communication channel, IM has now become an enterprise solution, and it took a good 3-5 years after IM was already in the consumer world, that it reached the enterprise, and another 3-4 years before it became mainstream. Even if you improve that rate of adoption, one should not expect ESN to become popular before 2012.
My biggest worry is what will happen when my boss "pokes" me about some deliverables? Is "Super Poke" the new micro-managing tool?
You get the idea. Taking Facebook & Twitter and creating an Enterprise focused social networking solution. There are many questions that come to mind when you think of such a solution -
does it replace email, instant messaging or team workspaces or is it a new medium altogether?,
will it improve productivity or reduce it?,
with so many emails to respond to already does this application require me to update-on/respond to/take-note-of all "updates" and activities?,
would this only be restricted to the enterprise, or can partner companies also join the network?,
what impact does it have on storage needs, security needs, content management, etc?
Instead of trying to address all these questions, lets evaluate the potential benefits of such an application. In order to do that, let's analyze what happened in the consumer world with Facebook & Twitter. What benefits did Facebook bring to consumers, what existing communication channels did it replace? I don't think Facebook replaced Email but yes, it definitely would have replaced the number of emails that people sent to their friends & family. I don't think Facebook replaced Instant Messaging, but Facebook realized that it is a complimentary communication channel and it has added that capability to its website. Facebook did definitely challenge a Flickr, as many people just upload their photos to Facebook now instead of doing it separately to Picassa or Flickr. Facebook improved our ability to "connect" with our friends, even though we could not meet often in the real world. Facebook gave users the ability to know what was happening in their friends life, and they could just share their life-happenings on Facebook knowing that their family & friends would get to see/read about it (maybe reducing some IDD phone calls here). Facebook didn't replace blogs, but made it a feature for users to be able to share "notes". In a nutshell, Facebook did a bit of everything and provided a single platform that was social in nature, and could be viewed by friends & family.
If we take this to the Enterprise, a Facebook-like application or what we might call an Enterprise Social Networking solution would not necessarily replace Email, Instant Messaging or Workspace. But it could become either a platform through which all these can either be accessed and complimented by the features such as status updates, rating/tagging, etc. or a platform that can be used to offer a Email-like, IM-like, Workspace-like environment. The important thing in both scenarios will be that this platform will be a "social" platform.
The obvious benefits of such a solution would be better information sharing across teams in the enterprise, better knowledge of what's happening in the enterprise, better connect with employees (especially in geographically dispersed teams) improving collaboration amongst teams, and providing a communications platform that is social, increasingly popular and partly informal.
An Enterprise Social Networking (ESN) solution could possibly be an addition to the existing communication channels that exist within an enterprise. What I believe will become important for ESN is that it could become an integration portal or access portal for other communication channels, a bit like IM on Facebook, Messages (Email) on Facebook, etc. It doesn't take a rocket scientist to figure that you could add voice capability & web conferencing as an application to ESN as well. What could start as a new communication channel, eventually has the potential to be a communication platform that can truly connect the other communication channels and deliver a quasi-UC (Unified Communications) experience.
Whether or not ESN will become popular in the enterprise can only be decided once the solutions from players such as Cisco, Salesforce.com, IBM, etc. get into the market, and how enterprise CIOs react to these. There is a bit of a precedence for ESN in the way Instant Messaging is becoming popular in the enterprise now. Starting as a consumer communication channel, IM has now become an enterprise solution, and it took a good 3-5 years after IM was already in the consumer world, that it reached the enterprise, and another 3-4 years before it became mainstream. Even if you improve that rate of adoption, one should not expect ESN to become popular before 2012.
My biggest worry is what will happen when my boss "pokes" me about some deliverables? Is "Super Poke" the new micro-managing tool?
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