Study: Groupware Thriving, Single-App Products Losing Out

The use of groupware, also known as Network/Web Integrated Collaborative Environments (ICE) software, doubled in 1997 from a year earlier to more than 50 million users worldwide, according to research by International Data Corp. (IDC), Framingham, Mass., an information-technology consulting firm.

Lotus Domino/Notes software by Lotus Development Corp., led the market in new users worldwide followed by Microsoft Corp.'s Microsoft Exchange, Novell Inc.'s Novell GroupWise, and Netscape Communications Corp.'s Netscape SuiteSpot. In terms of total users, Novell held the second spot after Lotus, followed by Microsoft and SoftArc Inc.. IDC expects this segment to grow to more than $2.4 billion in revenues worldwide by 2002, up from $1.3 billion in 1997.

According to the report, broad product support for Internet standards and increasing reliance on groupware solutions chronicled in ROI and case studies of user organizations are fueling demand for integrated groupware software. The sales momentum of the top vendors and the rising prominence of bundled software will force lower-tiered vendors to carve niches and seek partnerships, strategic alliances, and acquisitions to survive an industry shakeout.

"The sun is setting on single application products that are still trying to compete directly against integrated solutions," said Mark Levitt, research manager, collaborative and intranet computing research. "Vendors planning to be around at the turn of the century should follow the example of team-oriented groupware vendors, which position their offerings as complementary to traditional groupware solutions based on unique functionality, affordability, and flexible use and administration."

The report also presents a view of the declining market for Host ICE, email only, and information-sharing products that will continue to lose ground to Network/Web ICE products. Two other segments, group calendaring/scheduling and electronic conferencing, demonstrated double-digit revenue growth worldwide in 1997 and are expected to see decent user growth through most of the forecast period.

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