EFSS Market Consolidation in 2016

I've been covering the EFSS market for ESG for several years now, from back when there were only a handful of vendors talking about their solutions to a point when there were hundreds. In any growing market, though, there is some level of (inevitable) market consolidation.

In part 2 of my EFSS predictions videos, I take a look back at EFSS market consolidation in 2015 and discuss whether we're poised to see it continue this year (spoiler alert: we are).

Video transcript:

Announcer: The following is an ESG 360 video.

John: I'm here today with Terri McClure, Senior Analyst, covering enterprise file, sync, and share technologies for ESG. Welcome, Terri.

Terri: Thank you, John.

John: So, Terri, you mentioned earlier that you expect to see some healthy standalone businesses in the file, sync, and share space. That said, last year we saw a significant amount of consolidation in the market.

Terri: We did.

John: Is that something that you expect to see continue in 2016?

Terri: Yes, I mean when we started tracking the market back in 2011, what did we have, eight vendors in our first report?

John: Yeah, something like that.

Terri: Those were business-focused solutions.

John: It went up from there.

Terri: Within 6 months we were at about 60 we were tracking. Now the market can't really sustain, because, I mean, it even grew from there, it was well into the hundreds. So we saw some consolidation in 2015. We saw Soonr get acquired by AutoTask. We saw Watchdox get acquired by Blackberry, a very complementary technology there based on their audiences. And we saw Connected Data get acquired by Imation, which makes sense. Imation gets to extend their storage ecosystem out to mobile access just for those people who are looking for on-prem.

So the market's been consolidating. There's still an awful lot of vendors out there. Like I said, the standalone business will remain healthy, but I don't think it can support 60 or 70 vendors. So the consolidation is going to continue. Some of it's going to be to support that common content platform that we talked about, but some of it's just going to be companies that don't have the muscle to stay in the game with the behemoths, like Dropbox and Box.

John: Well, thank you, Terri. This was great, as always. Thanks for sharing your insights with us.

Terri: Thanks, John.

John: If you'd like to read more of Terri's research, you can visit her blog and her research at ESG-Global.com.

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