| Executive Summary: Unlike many Microsoft products, which are losing market share to savvy, agile competitors, SharePoint has maintained a growing dominance among enterprise collaboration tools. What's SharePoint's secret to success? |
On many fronts, Microsoft seems to be a company on the defensive these days: Windows Vista adoption by businesses has lagged; Windows Mobile is at least a generation behind the iPhone on the usability front; VMware is continuing to lead the market for virtualization products; and Amazon and Google continue to lead in cloud-based development services and Internet search, respectively.
That isn't the case with Microsoft's burgeoning SharePoint business, which has rapidly grown to become one of the brightest spots in the company's product portfolio. "Microsoft Office SharePoint Server 2007 is one of the fastest growing server businesses in Microsoft history," a Microsoft spokesperson recently told me. "The growth and demand for the product has exceeded our expectations and we expect to see continued success in the enterprise space going forward." That same spokesperson said that Microsoft has sold more than 100,000,000 SharePoint licenses, doubling its partner base to over 3,300 certified partners.
I recently had a chat about the exploding SharePoint market with Rick Pleczko, president and CEO of Idera Software, and he credits Microsoft's astute marketing strategy with creating the right conditions for growth. "Microsoft did a good job of seeding the market by making Windows SharePoint Services (WSS) so accessible," Pleczko said. "\[IT staff\] didn't need to fight the boss to get approval to use a free product, so that really enabled proliferation across departments. SharePoint is very easy to deploy and implement, and there aren't a lot of barriers to entry. It's easy to try, easy to buy."
Like Idera, dozens of other software publishers have seen the rapid growth of the SharePoint market, and they see lots of opportunities to provide tools that help admins deploy, manage, and secure their sprawling SharePoint footprints. "In our experience, many deployments are still relatively young, so for them migration, deployment, and backup/recovery are still at the forefront of their organizations' priorities," says Ken Allen, Director of Marketing at Axceler. "\[We're also\] hearing from customers that the use of hosted services is on the rise, and we expect to continue to see strong demand for security capabilities. Richer applications (such as workflow-enabled apps) are coming in as these deployments get more mature."
Covering the Basics
In an era where many IT companies—Microsoft included—are hoping to develop the Next Big Thing, Microsoft's approach to the SharePoint market has hit pay dirt by focusing less on next-generation feature sets and more on providing solutions that customers truly need. Just about every IT department is tasked with creating some form of public folder solution that lets employees share files and documents throughout an organization. Public folders have lots of limitations, so the arrival of SharePoint—which provided a host of features aimed squarely at taking document sharing and management to the next level—found a very receptive audience. "\[SharePoint\] really is a step up from the old shared folder system, but with a more elegant web interface," says Scott Gode, Director of Marketing at Azaleos. "Companies need a more elegant way to store corporate information, and SharePoint delivers."
Looking to the Future
As popular as SharePoint has become, there are competitive threats on the horizon. A host of web-based document file-sharing and collaboration tools have emerged in recent years, ranging from Google Docs/Sites to web startups such as Ecofiling and other free and low-cost alternatives. Most lack the tight integration with other Microsoft products and technologies (e.g., Active Directory) that some IT pros demand, so they might not emerge as serious contenders to SharePoint's dominance in the segment.
"The concept of what SharePoint is trying to deliver as a strong document management platform coupled with collaborative features is definitely here to stay," says Gode. "The question for Microsoft is whether or not/how they can continue to learn from the market and the competition and adjust and grow the product so that they can stay on the leading edge."