Will Mega Vendors Ever Crack the IPS Nut? Insights from the Latest Gartner® Reports

The latest Gartner® Magic Quadrant™ and Critical Capabilities reports on Intranet Packaged Solutions (IPS) reveal a growing demand for platforms that balance comprehensiveness alongside depth of functionality. However, while some vendors lead the charge, mega vendors with products like Microsoft Viva and ServiceNow Employee Centre continue to struggle in this space despite continued efforts to compete. Microsoft Viva is often touted as an intranet solution but has yet to be included in a Gartner Magic Quadrant covering intranets.

ServiceNow have only just placed on the 2024 Gartner reports but placed as a Challenger, placing significantly behind other vendors in Completeness of Vison and Ability to Execute, and with Gartner calling out weaknesses across X and Y. So, why do these tech giants falter in a market they seemingly have the resources to dominate? Let’s delve into the insights from Gartner’s findings.

1. Lack of Focus on IPS: Shallow Features, Limited Use Cases

Microsoft and ServiceNow are household names in the tech industry and beyond, with vast product portfolios that span multiple categories and are used by the largest and most successful organizations in the world. However, their broad focus often works against them when it comes to excelling in specific markets like IPS.

IPS platforms require a depth of features tailored to meet enterprise needs, from seamless content management to personalized employee journeys. Yet, mega vendors’ intranet solutions often lack the nuance necessary for such tasks. Instead, they offer shallow features or expensive customizations that fail to address the unique challenges of large and complex organizations. For example, Microsoft Viva, while promising in its ambition, has yet to deliver the comprehensive out-of-the-box capabilities required for a robust IPS solution. In the latest reports, Gartner highlighted that, despite being marketed as an ‘Employee Experience Platform':

A separate 2024 Gartner report on Microsoft product usage detailed that while Teams and Microsoft Office Apps (Word, Excel, PowerPoint etc.) see high usage and high value across surveyed organizations, other Microsoft apps such as Viva Engage see low usage and low value. (Microsoft 365 Product Usage – Value Map, Gartner, 2024).

Similarly, ServiceNow’s products may excel in IT workflows, but struggles to deliver the kind of user-centric design and out-of-the-box functionality that enable large enterprises to drive employee engagement. As stated in the 2024 Gartner® Magic Quadrant™ “Gartner client inquiry conversations signal concern as to how broadly the ServiceNow IPS technology will evolve versus it being a more limited extension to its overall product portfolio.

Result: Enterprises seeking a sophisticated IPS solution often find themselves limited by the constrained capabilities of these mega vendors. Their lack of focus on IPS as a core offering leaves businesses searching elsewhere for platforms that can truly deliver on their vision.

2. A Strategic Void: Why Size Hinders Support

While mega vendors boast impressive resources and global reach, their size can hinder their ability to offer the strategic support required for successful IPS deployment. Intranets are not just technology solutions; they are strategic investments that require careful alignment with an organization’s EX goals. Enterprises need more than a vendor - they need a partner who can guide them through the complexities of implementation, adoption, and long-term success.

Specialized enterprise IPS providers excel in this area by offering tailored services and dedicated support teams. A pure play enterprise IPS vendor understands the intricacies of employee experience and bring a consultative approach to the table, helping enterprises craft tailored strategies that fit their unique needs. In contrast, mega vendors don’t provide this level of engagement and support as their focus is elsewhere.

Their sheer scale means they cannot prioritize individual customers or dedicate resources to crafting personalized strategies. The intranet is just one of many products they offer and on paper, a tiny percentage of overall revenue. They cannot justify providing dedicated support and professional services. Instead, customers are often left to navigate implementation, adoption, and optimization on their own, with limited guidance.

Result: Enterprises require hands-on support to ensure their IPS investment delivers value. Mega vendors’ inability to offer this level of partnership often makes them an unappealing choice for businesses seeking a robust and effective intranet solution.

3. Enterprises Won’t Compromise on Employee Experience

This is now the second year of Gartner® running research on the Intranet Packaged Solution market, highlighting the importance of employee experience as a priority for large enterprises. Unlike other IT investments, an intranet is a visible platform used by employees across all levels of the organization. Its performance - or lack thereof - is under constant scrutiny.

Implementing an ineffective IPS solution can have far-reaching consequences, from disengaged employees to reduced productivity, wasted investment, and more. This heightened visibility means EX-focused enterprises are unwilling to compromise on the quality of their IPS platform.

Mega vendors often pitch their platforms as convenient, bundled solutions that simplify contracting and reduce vendor sprawl. However, Technology, People, and Information leaders recognize that these benefits come at the cost of quality. When it comes to IPS, convenience cannot outweigh the need for a platform that delivers exceptional employee experiences.

Specialized vendors dominate in this space because they prioritize the features and functionality that matter most to enterprises. They invest heavily in understanding employee needs, designing intuitive interfaces, great UX, and leveraging AI to personalize experiences at scale. These elements are critical to an IPS platform’s success and are areas where mega vendors frequently fall short.

Result: Enterprises are increasingly willing to bypass mega vendors in favor of specialized providers that can deliver the robust, high-performing IPS solutions that drive tangible uplifts in Organizational Velocity.

The Future of IPS: Can Mega Vendors Adapt?

The struggles of mega vendors in the IPS market aren’t due to a lack of talent or resources. Rather, they stem from a failure to prioritize IPS as a core offering and invest in the features, strategy, and support required to compete.

To succeed in this market, vendors like Microsoft and ServiceNow must shift their approach. This means:

• Investing in IPS-specific capabilities to address the unique challenges of modern enterprises.
• Offering strategic consulting and dedicated support to guide customers through deployment and adoption.
• Reevaluating their focus on employee experience, recognizing it as a critical driver of organizational success.

Whether mega vendors are willing or able to make these changes remains to be seen. For now, enterprises seeking the best IPS solutions will continue to look toward specialized providers that deliver the focus, functionality, and expertize needed to transform employee experience.

Conclusion: The Gartner Reports Don’t Lie

The latest Gartner reports make it clear: the IPS market demands specialized purpose-built solutions that go beyond the surface. Mega vendors like Microsoft and ServiceNow may dominate other tech categories, but their struggles in IPS highlight the importance of focus, strategy, and commitment.

As organizations continue to prioritize employee experience, the question remains - will mega vendors ever crack the IPS nut? Until they do, specialized providers will remain the go-to choice for enterprises that refuse to compromise on delivering exceptional intranet solutions.