It's not even available to the general public yet, but Facebook's (NASDAQ:FB) enterprise software, Facebook at Work, seems on its way to 1 million users. Royal Bank of Scotland and its 100,000 employees have signed on to to use the new Facebook tools currently in beta testing with select businesses. Facebook says it now has 300 businesses using the enterprise version of its network, including companies such as Heineken, which has put its entire U.S. workforce on the site.
In September, Re/Code reported that Facebook will open Facebook at Work to the public by the end of this year. With a solid start in the closed beta, Facebook may have a way to diversify its revenue from advertising, which currently makes up more than 90% of its total revenue. That percentage continues to grow as the company's payments business shrinks and advertising revenue grows.
While 100,000 or 1 million users might not sound like a lot -- especially in comparison with Facebook's 1.5 billion users -- it's key to put it in perspective. Facebook at Work's biggest competitors are Slack and Yammer, which Microsoft (NASDAQ:MSFT) bought in 2012.
Slack announced this summer that it has 1.1 million active users, two years after launching. Yammer has 10 million users, now seven years after its launch. The early success Facebook has had since launching its closed beta in January indicates that it could quickly surpass these benchmarks.
The Royal Bank of Scotland will help it get there. The company will have 30,000 of its employees on the network by March and 100,000 by the end of next year.
Opening up to the public could help even more. Facebook already has established relationships with 45 million business, most of them small and medium-sized, through its Pages product. Facebook can target messages at Pages to get them to sign up for Facebook at Work and grow the product rapidly, overtaking Slack and Yammer.
Facebook at Work is a freemium product, just like Slack and Yammer. Without any paid services, users can follow co-workers, join groups, and generally use Facebook at Work to communicate with whomever they need to reach in their own company. Facebook will charge businesses in the future to integrate other apps with the social network to facilitate things such as sharing and editing documents with Microsoft's Office 365, collaborating on code repositories with GitHub, or uploading and downloading files with DropBox.
Slack says 300,000 of its 1.1 million users are paying for additional services on its platform, converting more than 25% of free users. Yammer is now integrated with Microsoft's Office 365, which has 18.2 million subscribers and grew 70% year over year last quarter.
Overall, enterprise social software is expected to grow to a $8.13 billion market by 2019. Facebook is expected to generate $17 billion in revenue this year and $23 billion next year, so Facebook will have to take a sizable chunk of that market for it to have a meaningful impact on its financials.
But Facebook can also benefit from bringing more businesses to its platform and getting them more engaged with Facebook. That opens up additional advertising opportunities for its consumer-facing product, enabling Facebook to benefit in two ways from its enterprise software. It will take a long-term outlook for Facebook to make Facebook at Work a success, but that's to be expected from the company's management.
Adam Levy has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Facebook. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.