Global spending on collaboration apps continues to rise as businesses deploy software across their organizations, according to IDC. But the rate of growth has slowed as adoption of videoconferencing tools matures and vendors trim prices. Credit: Gremlin / Getty Images Global business spending on collaboration software — including videoconferencing apps, team chat, email, and more — reached $33.9 billion in 2022, according to a recent IDC report. It was the seventh consecutive year of double-digit growth, up 14.6% compared to the 2021. But that figure amounted to slower year-on-year growth compared to IDC data from the preceding two years (28.4% YoY growth in 2021, and 32.9% in 2020 at the height of the COVID-19 pandemic and the rapid shift to hybrid and remote work). Microsoft accounted for the largest portion of the collaboration applications market last year (29.7%), according to IDC, followed by Google (13.5%), Zoom (11.2%), Salesforce (7.6%), and Cisco (3.2%). IDC Worldwide collaborative applications market share in 2022. The growth in spending during 2022 was driven partly by organizations rolling out collaboration applications to a wider set of workers. “[Businesses] are still connecting more of their workforce, be it frontline workers or contract workers, and that’s adding users,” said Wayne Kurtzman, IDC’s research vice president for collaboration and communities. ”There’s also increased investment in applications such as enterprise community platforms and visual collaboration platforms.” What’s held back spending growth rates in recent months, he said, has been downward pressure on average revenue per user (ARPU), as vendors offer integrated and bundled collaboration options that provide access to a range of features at a lower price compared to apps purchased individually. This has affected videoconferencing applications in particular as adoption of these tools matures. Looking forward, IDC expects business spending on collaborative applications to more than double in the next five years to a total of $71.6 billion by 2027, according to another recent report. The anticipated growth will likely be boosted by the inclusion of generative AI features within collaboration software products. Google, Microsoft, Slack and Zoom are just some of the vendors now developing AI features for their software. Those genAI tools include automated meeting summaries and email message draft generation, which vendors have promised will save workers time on certain tasks. Microsoft and Google have both said their genAI features will cost $30 per user each month for large business customers, though it’s likely that those on lower tier pricing plans won’t pay as much. “In the future there will be features — AI, for example — that will be additive to the price,” said Kurtzman. “You’ll see the ARPU increase later in the five-year period, because of some of these additions. You could see it a little bit more next year, 2024, with some of [the recent ARPU decreases] starting to reverse.” Related content opinion Can AI tools help reduce Zoom fatigue? When it comes to meetings, whether in person or on video, can anything make them better? Yes, but it’s not the technology. By Steven Vaughan-Nichols May 06, 2024 5 mins Augmented Reality Generative AI Zoom Video Communications news analysis Apple earnings: About that iPhone 'slump' in China Based on information from Thursday's earnings report, it seems that data pointing to an iPhone slump in China were over-baked. By Jonny Evans May 03, 2024 9 mins iMac iPhone Apple news Microsoft begins to phase out ‘classic’ Teams Microsoft is encouraging Teams customers to move to the new, faster version of the collaboration app; the older version will be switched off next year. By Matthew Finnegan May 03, 2024 3 mins Microsoft Teams Collaboration Software Productivity Software news analysis Apple confirms it will open up the iPad in Europe this fall The latest efforts to comply with Europe’s Digital Markets Act mean developers can offer to side load apps to both iPhones and iPads in the EU. Apple has also taken steps to improve what it offers to smaller and non-commercial developers in the By Jonny Evans May 02, 2024 6 mins iPad Apple Mobile Apps Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe