Collaboration application spending grows in the face of economic uncertainty

The collaboration application market has experienced its fifth consecutive year of double-digit growth, as organizations continue to embrace hybrid and remote work.

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Global spending on collaboration applications grew by 28.4% year on year in 2021, generating sales of $29.1 billion, according to a new report from IDC.

It was the fifth consecutive year the market experienced double-digit growth, with sales up $6.5 billion from IDC’s estimate of the collaboration application market last year.

Although formal work-from-home orders are no longer in place, the popularity of hybrid and remote work models has continued to prevail at companies across the globe, leading organizations to expand the use of collaboration software to more employees. In addition, the purchase and integration of multiple applications to better meet corporate needs, as well as price increases and feature upgrades, have all been identified by IDC as the key driving forces behind the growth.

The growth extends across all the collaboration markets and submarkets identified by IDC. These include team collaboration applications, like Slack and Microsoft Teams; conferencing applications, such as Zoom, Webex, and the conferencing portions of Google and Microsoft Teams; enterprise application platforms, such as Khoros and Salesforce; virtual events, such as Cvent and On24; and email.

However, the rate of inflation, now reaching double digits in some countries, and the fear of a possible recession looming on the horizon, may be putting the brakes on growth. Though the collaboration software market is forecast to maintain a double-digit CAGR (compound annual growth rate) growth in the next five years, it is expected to slow, said Wayne Kurtzman, research vice president of social, communities and collaboration at IDC and author of the report.

Ultimately, though, the trend for companies to implement technology to make business processes more efficient will help sustain growth.

“Companies, like their workforce, are evolving into the digital business era. Most companies, according to IDC research, are concerned that their workforce is more tech savvy than the company,” he said. “The adoption of collaborative platforms, especially when paired with integrated applications and an internal culture of collaboration, help drive significant and new efficiencies and create a better-connected workforce.”

Kurtzman said sales of all applications identified in IDC’s report will continue to grow, led by team collaboration applications and enterprise application platforms, with the overall collaborative applications market expected to reach $63.8 billion by 2026.

Copyright © 2022 IDG Communications, Inc.

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