Meta’s future in enterprise could flounder on trust issues

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Facebook‘s parent company Meta appears to be pushing further into the enterprise market, dropping the consumer version of its Portal video conferencing device, focusing on developers with its AR headset, and investing in its Workplace corporate social networking platform. But while the virtual business environment is a market ripe for growth, Meta’s reputation may stop it taking full advantage.

Meta is focusing its efforts on the future of the metaverse, bringing work and life into the virtual world. (Photo by reklamlar/iStock)

Meta’s new corporate focus was reflected in a new partnership with McDonald’s, which will result in 1.9 million of the company’s restaurant and corporate staff start using Workplace from Meta over the next 18 months.

The tool, designed to allow remote and frontline workers to stay in contact with each other and corporate staff, is already used by McDonald’s franchises in Spain, Australia, Portugal, New Zealand, Slovakia, Czech Republic and Poland, as well as some company-owned restaurants in the US.

Meanwhile, the company has decided to stop consumer development of Portal, which had been seen as a potential rival to Amazon’s smart home display, the Echo. But further development of Portal will now focus on its use in enterprise environments, according to a report from The Information.

These are the latest moves towards the enterprise market for Meta, which already has a strong business through WhatsApp messaging and advertising services.  Even Workplace has an estimated seven million users, although the most recently published figures are from early 2021.

But will more corporate users take to a platform based on Facebook? Shelly Kramer, principal analyst and founding partner at Futurum Research, doesn’t think so. “It’s pretty safe to say consumers and users alike have zero trust in Meta, and deservedly so,” she says.

Facebook has been beset by scandals around the way user data is handled, and its seeming unwillingness and inability to deal with harmful content. “Using a collaboration platform is all about trust,” Kramer argues. “Who’s going to opt for Meta for Enterprise collab over Microsoft Teams? Cisco Webex? Zoom? I’m going to go out on a limb here and say no one. Good try, Meta. You’re drunk.”

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Some analysts suggest the move is Meta trying future-proof its business, as growth on its primary platform Facebook begins to slow down for the first time. The company posted a declining number of users in the fourth quarter of 2021, with its daily active user total dropping by 500,000, the first time this has happened in the company’s 17-year history.

“Facebook is bleeding users,” Kramer argues. “The only thing that keeps some of us there is the connections we’ve made near and far over the years, but mostly, we hate it. Young people? No way are they using it.”

The decline is thought to be one of the reasons the company’s founder Mark Zuckerberg is championing a transformation which will see the business become a metaverse company. It changed its name last year to reflect this focus on the metaverse, the idea that people will carry out their everyday work and social activities in a virtual, rather than physical world.

One stepping stone towards that could be the rise of augmented reality, where a virtual world is overlaid on the real world through a headset or glasses. Meta has an AR headset in development but confirmed it would initially only be available to developers, rather than consumers.

Kyla Lam, a research analyst at IDC, specialising in virtual worlds, as well as augmented and virtual reality, told Tech Monitor: “The increase of the enterprise side is not necessarily reducing the consumer market, but more about increasing the use cases of the metaverse, in other words widening the audience.

“For instance, the virtual consumer market has a solid gaming industry whereas the virtual corporate environment is only beginning. The ad-sharing and industry changes are definitely raising a lot of regulatory concerns, but also opening a lot of possibilities. Hence, the desire to enter the metaverse persists, and while the consumer side is growing, the enterprise will as well.”

She explained that for the enterprise, the metaverse will be another channel allowing them to widen visibility and allow corporations to improve engagement and interactivity with customers and staff.

“The metaverse represents a new level of decentralisation and inclusion, an alternative to people who want to explore new kinds of identities and interactions, which resonates with its new generation of audience,” Lam says. “Hence, companies are seeing the opportunities to complement user behaviours such as shopping, social communities, real estate, art collection and dining, with billions of investments into the metaverse.

She adds: “While being at less than 10% of market share in 2021, the enterprise segment in AR/VR headset devices is expected to continue growing in share at a double-digit annual growth rate, which will complement the development of the metaverse.”

Read more: Virtual worlds, real money: Why big business is investing in the metaverse

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