Facebook is causing ripples in the collaboration services market as its Workplace software tool builds a substantial user base – many of whom are actually paying for the service.

‘FAANG’ companies (i.e., Facebook, Amazon, Apple, Netflix, and Google [Alphabet]) are usually associated with the consumer market, but their influence on the enterprise market should not be underestimated.

Facebook Workplace is making inroads into the business market, with more than 200 million customers. Within that base, Facebook supports in excess of 30,000 organizations using Workplace, including seven million paid subscribers.

Launched in June 2018, Workplace is based on Facebook’s own internal collaboration platform and was initially targeted at non-profit organizations and the education sector. Since then, it has developed into a service delivering 40% year-on-year subscriber growth and boasts blue-chip customers like Walmart, GSK, AstraZeneca, Telefónica, BT, and now Virgin Media – as well as a host of smaller enterprises.

Covid pandemic has boosted Workplace growth

Recent growth may have been accelerated by the Covid-19 pandemic, but that does not appear to be a temporary blip. Enterprises, governments, and people have had time to reflect, and many now consider work to be an activity rather than a location.

In addition, countries fortunate enough to be further along in vaccinating their citizens have seen a rise of new businesses forming as economic growth returns and the benefits of not commuting, the convenience of working from home, and an improved work-life balance have encouraged many to become their own boss. Existing businesses ranging from florists to financial service providers have clearly also embraced a more digital approach to enterprise, providing further market momentum.

Facebook’s proposition is compelling, with free trials and monthly per-user pricing beginning at $4 for smaller organizations/teams and $8 for complex organizations. Competitors will need to differentiate on factors other than price; customer service, integration, innovative products, and security are areas which can offer added value.

Facebook familiarity

With a choice of so many somewhat ironically named ‘universal’ and ‘unified’ platforms for collaboration, what might provide an advantage to Facebook over time? First and foremost is its familiarity; love it or hate it, its brand is recognized globally. Next, the pricing is low, simple, and compelling. Then there are resources: Facebook’s revenues in 2020 amounted to nearly $86 billion (Zoom achieved a creditable $2.65 billion by comparison).

Facebook is also investing in the next phases of technology for its core proposition, such as virtual reality; again, deep-pocketed R&D is something that the business division can leverage from Facebook’s corporate investments.

With the growth spurt driven by the Covid-19 pandemic and the broader evolution of work, the rising tide has lifted many collaboration boats. In due course, when the waters get choppy some may sink. If you were in this particular harbor, how would you feel about Facebook steaming into view?