Facebook’s Workplace reaches 2M paid users, targets SMBs

Buoyed by adoption at some of the world’s largest organizations, Workplace at Facebook has now amassed two million paid users, according to the latest data released by the company.

Workplace was launched at the end of 2016, following a lengthy beta period with customers such as Royal Bank of Scotland.  Since then, 150 companies have deployed the enterprise social network to more than 10,000 users, alongside a handful of organizations rolling Workplace out to more 100,000 workers. Among that latter group are Telefonica, Nestlé, Starbucks and Walmart.

“The uniqueness of Workplace is that we built the business by starting first with big companies,” said Julien Codorniou, vice president of Workplace at Facebook. As Workplace continues to grow, the next priority is to increase adoption among smaller and mid-sized businesses, too, he said.

Envisioned as a corporate version of Facebook’s consumer social network, familiarity among users is a major Workplace selling point (though its image may have suffered some  of late due to its parent company’s data privacy woes). That said, the application’s ease of use has supported viral adoption among employees, said Angela Ashenden, principal analyst at CCS Insight.  

“Facebook’s latest adoption stats for Workplace show the incredible momentum that the company has had with the product over the last couple of years,” she said.

“When it entered the market, there were questions around the timing, as its main competitors in the enterprise social networking space – Jive Software and IBM – were clearly struggling to remain relevant in the face of new, more agile entrants to the collaboration space like Slack,” Ashenden said.

“What’s clear is that Workplace appeals to organizations in a way that previous social collaboration tools struggled to do, and benefits from much more viral adoption among employees in companies where it’s been chosen as a way to drive employee engagement, communication and collaboration.”

Momentum in a crowded collaboration market

The total number of Workplace users is likely to be significantly higher than the two-million figure quoted by Facebook, which only takes into account staff using the application on its Premium payment plan. Workplace also offers a free version of its software and makes the application available to non-profit and education organizations at no cost.

Despite its growth, Facebook has been comparatively tight-lipped on customer adoption, and has not previously broken out figures for paid users. The most recent announcement on customer traction prior to last week was in October 2017, when the company said 30,000 businesses were using Workplace. (Facebook declined to provide an updated version of that figure.)

Collaboration software vendors often differ in how they report usage stats, making it difficult to draw direct comparisons with rival products – though it is possible to draw some parallels.

Slack – regarded as one of the fastest-growing business apps ever since its official debut in 2014 - recently announced that it has three million paid users, and 10 million users in total, including its free service. It also has more than 85,000 teams paying for its service.

Microsoft’s collaboration product, Teams, is available both as part of paid Office365 subscriptions and as a free service and is used at 329,000 companies. There are 54 companies with more than 10,000 monthly active Teams users, the company said, though it does not provide total daily or monthly active user figures.

It should be noted, of course, that Workplace differs from both applications in various ways, including features and pricing.

“It is very difficult to draw any conclusions since vendors provide numbers that make it impossible to do a side-by-side comparison,”said Raúl Castañón-Martínez, senior analyst at 451 Research.“There are, however, indications that Workplace is doing outstandingly well. They have continued to add large, well-known global organizations like Nestle and Telefonica; and their deployments typically encompass the entire workforce.

“Two million users is still a fraction of the number of users that Slack (10m+) and Microsoft Teams (329K organizations) have but still impressive growth in two years, nonetheless,” Castañón-Martínez said.

Focus on SMB customers

As well as attracting to large business customers, Facebook aims to boost adoption of Workplace with all types of, Codorniou said. “Now we are going down the market and going after companies of a smaller size,” he said.

Part of the strategy is to grow its list of reseller and consultancy partners to help expand its reach. “Of course, we will keep on talking to the big companies directly ourselves, this is what they expect from the software vendor they choose,” said Codorniou. “But the more we can work with partners and the bigger the Workplace economy can be, the better it is for us.”

Boosting its mid-market and small business customer base brings different challenges for Workplace.

Facebook hashad strong success with large enterprises, said Ashenden, largely because of its focus on enabling cross-company communication and collaboration, which naturally becomes more challenging the larger the organization.Selling Workplace to smaller businesses requires a different approach, she said.

“It’s likely to have more difficulty positioning itself to smaller businesses because the corporate communication and HR functions that tend to sponsor social collaboration initiatives are often less mature, meaning that there isn’t an obvious entry point for the sales process.”

There are a number of ways that Facebook can increase its appeal to small and mid-sized businesses, though.

“To increase the potential of Workplace in the SMB space, Facebook should continue to strengthen its mobile application version; expand its social media marketing campaign; continue to build on the freemium version choice to attract new customers; [and] considerably promote case studies and success stories in the SMB sector,” said Alaa Sayeed, ICT Industry Director at Frost & Sullivan’s Digital Transformation team.

Other priorities would be to increase the number of third-party integrations with popular business apps and to “continuously enhance its channel strategy.”

Workplace’s partners include: PwC, Deloitte Digital, Revevol, Slalom Consulting and others. “With them, we're building a Workplace Economy of system integrators, re-sellers and independent software vendors so we can bring Workplace to hundreds of millions more people around the world,” Facebook said in a blog post.

Last year, Facebook added 50 third-party app integrations with applications such as ServiceNow, Atlassian’s Jira Cloud and Microsoft Sharepoint. 

Castañón-Martínez, said the visibility of Facebook should offer some advantages for Workplace. 

“Targeting SMBs will entail a different level of challenges, including distribution and support, but Facebook has a leg up on its competitors given that it’s become a household name and the company has gained significant experience in terms of how individuals socialize and communicate,” he said.

“I think they could do very well with a self-service model targeting small businesses; this is a model that has worked well for other SaaS collaboration vendors.”