Our accountants were recently asking us about the market size for our applications as part of the financial review process, which translates into a) how much total money is being made today (existing market) and b) how much could be made (addressable market).
It's one thing to do it as part of your business planning process, where you can spend the time looking at actual numbers and try to come up with a formula based on reasonable assumptions (like % of time people spend at their computers, % of employees actively involved in collaboration, etc.), but it's quite another to get generic market stats for a space with very few solid delineations between each market. For instance, is content management truly a different category than collaboration now? It was in the 90's, but shouldn't really be today.
Some of the interesting stats I came up with during the search:
Gartner: Estimates that $6 billion was invested in new portal, collaboration and content management software licenses in 2005. This is predicted to increase to more than $9 billion by 2009.
Basex: A smaller analyst firm focused on the space (they made a name for themselves by estimating the $588B cost of interruptions in the workplace), estimates that the market is $72B in 2007. Now this includes all manner of collaboration and KM (portals, search, mobility, knowledge-enabled CRM, etc.), but no consulting.
Collaborative Strategies: Another smaller group. I actually gave a talk with Ann Marcus, one of their consultants recently. They estimated $13.1B for the real-time collaboration and communication market in their 2006 RTC Report.
But my favorite response was from Michael Dortch at the Robert Frances Group, who commented on the addressable market. Of course, this view does not reflect the views of Robert Frances Group, but I love the approach.
Look, the long and the short of it is that everybody in every business collaborates, internally with colleagues and externally with customers, partners, and prospects, yes? So how big is the "collaboration market,"
+ however THAT's defined? I'd be brash enough to say that assuming that half of every business dollar is wasted or consumed by unspecified overhead, a conservative estimate of the extended collaboration market would be, say, half the worldwide gross domestic product (GDP) equivalent. Is THAT big enough??+
+If it's TOO big, let's come at it from the other, even more conservative end of the spectrum. Let's say that no more than five to 10 percent of the worldwide GDP equivalent reprensents a defensible stand-in for the collaboration market. That's still a LOT more than many IT-centric markets today, isn't it?+
Needless to say, I have effectively confused the accountants on this one.