Daniel Debow

Can social apps kill enterprise software?

November 1, 2010: 10:46 AM ET

Big, expensive, custom software from blue-chip software and consulting companies has been a rule of thumb for giant corporations for decades now. Is it possible a new breed of cloud-oriented startups can change all that?

Anyone who's had to sort through a clunky "reply all" email chain at work or tried to post a document to the intranet knows that there's got to be a better way. In fact, they probably already know what that better way is: People are increasingly communicating and sharing information in real time on free services like Facebook and Twitter. Those companies are focused on the general public, but others deploying similar services are now trying to usurp the enterprise software that has long dominated the server farms of most major companies.

We're at a weird place in time in terms of enterprise applications -- those big, expensive, often heavily customized software packages companies like IBM (IBM), Cisco (CSCO) and HP (HPQ) sell to equally big companies, along with hefty service contracts. As much as they are having their moment in the sun -- Microsoft (MSFT) for example boasted record sales of Enterprise apps last week -- people are getting increasingly and undeniably comfortable with social sharing, and several start-ups are trying to capitalize on that.

"To deny enterprise workers the benefit of social networking is equivalent to, ten years ago, forcing them to communicate with colleagues by telegraph," says Matthew Cowan, co-founder of Bridgescale Partners, a tech investment firm that which works with several social media for business startups. He predicts that in two years, social media for business will be the norm. More

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