By Mayank Choudhary, VP of product management
“It always was about real customer value.”
In July of 2016 Gartner published its annual Magic Quadrant for Enterprise File Synchronization and Sharing in which Intralinks, again, for the third consecutive year, is recognized in the report, positioned by Gartner this year as a Visionary. Gartner writes that enterprise file sync and share (EFSS) is ripe for change. “By 2018, 70% of EFSS destination vendors will cease to exist, having been acquired or put out of business, and the remaining 30% will evolve to support the digital workplace or modernize corporate data infrastructures.”*
It took some time to get there, but we finally did. We believe Gartner is spot-on about the changing dynamics of this highly competitive market. EFFS vendors with feature sets (only file sync and share) have started to be consumed as part of the larger platform or go-to-market (GTM) ecosystem, or have exited the market completely. There are quite a few examples that reflect the changing dynamics: WatchDox was acquired by BlackBerry, Syncplicity by Skyview, Soonr by Autotask, Salesforce files merged with the broader Salesforce CRM vision, and BitCasa closed its consumer cloud storage business. In our opinion, more companies will likely follow suit in the next 24 months.
There are many factors driving this convergence. Looking from an outside-in (or customer’s) perspective, it is obvious that there was a weak “product-to-market fit” with a flawed business model. To name a few of the shortcomings in this space:
- Customers want real value: Customers in highly regulated verticals want mature solutions that provide real business value and advance the line of business vision for enterprise collaboration and content management – along with realizing IT’s vision of a digitally connected enterprise with full security, audit and control over the entire business lifecycle across the connected business network.
- Customers want to solve a broad spectrum of “content-centric” use cases, not just a sync-and-share use case: In a crowded market, product offerings blur together. Customers need a mature and integrated platform that enables solutions for different use cases across their entire organizations. This would include content-centric use cases that span from mobile access for employees to business processes that bring people and content together across a connected network. Some examples are: merger and acquisitions in financial services, clinical trials in life sciences, regulatory reporting in highly regulated verticals and so on.
- Customers want control and optionality: Customers in highly regulated verticals demand control, such as: data controls and deployment optionality tied to corporate data classification levels, security levels and regulatory guidelines for storage and processing of the data.
- Customers want a trusted partner: Above all, customers are looking for a partner (not just a vendor) who has a real history of delivering customer excellence.
There are only 13 vendors in the Gartner Magic Quadrant for EFSS. In our opinion, vendors who are able to deliver a suite of enterprise solutions for individual sharing, team-collaboration and distribution use cases (such as sync, quick send and FTP replacement) to high-value, purpose-built content-centric applications for digital business processes, to the business platform and to GTM maturity, and who have a proven history of customer excellence in the market, will succeed long-term in this space. We at Intralinks are doing this for 20 years with purpose built applications for highly regulated verticals in Financial Service, Life Sciences , Manufacturing and other verticals.
In the same Magic Quadrant for Enterprise File Synchronization and Sharing published in July 2016, Gartner also wrote that “…30% of the vendors would evolve to support the digital workplace or modernize corporate data infrastructures.” We believe the majority (but not all) of the EFSS vendors will pivot towards this strategy, but those who do may risk the same fate as the EFSS market.
The choice of chasing enterprise content management and collaboration cloud 2.0 strategies is a fair discussion but a difficult one on which to find a resolution. In our opinion, there is rejuvenated focus on the integrated collaboration, content and productivity strategies by some vendors. We believe building a siloed platform that replicates and exacerbates the challenges IT faces with the on-premise enterprise content management and collaboration doesn’t deliver “customer value.”
Vendors in this space who successfully ride this wave will focus on delivering substantive “customer value” through business solutions that are purpose-built, configured and optimized for a business process that brings content and business communities together with enterprise-grade IT controls.
*Gartner, Magic Quadrant for Enterprise File Synchronization and Sharing, 2016, July 21, 2016, G00290239
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