The social networking technologies that have shaped the way people communicate in their personal lives are moving into the workplace with increasing speed, in some instances taking the place of endless meetings and e-mail exchanges.
That’s grabbed the attention of entrepreneurs, investors and researchers who see the software sector as a place where companies will spend an increasing amount of money and come to expect more innovative products.
“We’ve already seen how the consumer world and personal world have changed dramatically. No one is questioning that we live our lives differently,” said Tony Zingale, chief executive of Jive Software. “But when we come to work in the morning, we’re still using 15- or 20-year-old technologies.”
Zingale took his Palo Alto-based company public in December, a milestone for any burgeoning sector. The software provides each employee with a profile where they can see others’ activity and convene groups, among other functions. Capital One and the World Bank are customers.
“We believe that the enterprise has become very cool again because it’s in the midst of retooling itself after years and years of investment in automating business processes,” Zingale said.
Researchers have pegged these social enterprise technologies to become a large, and growing, segment within the software sector in the coming years. Forrester Research, for example, projects companies will spend $6.4 billion on them by 2016.
Meanwhile, research firm IDC found in a survey of about 400 companies last year that 42 percent had already deployed the software either within the office or to engage with customers, said Michael Fauscette, group vice president of software business solutions.
“When we first started asking questions companies were really focused on out-bound [communication]” such as marketing or customer service, Fauscette said. “Now it’s much more broadly focused around the business.”
He added that the companies reported an improvement in productivity that ranged from 11 to 30 percent, a figure that Fauscette admits can be highly subjective and defined differently across several organizations.
Proving a return on investment for corporate executives has been among the toughest sells for social networking technologies. While everyday people who use Facebook or Twitter may find that the technology benefits their social lives, companies need to see those benefits on the balance sheet in order to justify the expense.
District-based NationalField integrates its intra-office social network with the reams of information about sales, marketing and other business practices that companies store in databases and other software products.
That allows individuals within the company to monitor their work output and compare it against co-workers, and it allows employers to set measurable goals, Chief Technology Officer Justin Lewis said.
“At some point, everyone can do the generic copying of Facebook and Twitter,” he said. “You have to take the next step, and that’s where a lot of the innovation is happening now. That’s where we think we’re doing things that people haven’t done before.”
Zingale at Jive Software said customers have seen a reduction in the time it takes to close a new sale and an increase in customer satisfaction — two metrics of productivity. And then there’s this statistic: Use of e-mail has fallen by as much as a third at some firms, he said.
“Companies that are building platforms for communication, content, and knowledge sharing within an enterprise that work more fluidly than e-mail is a really interesting market,” said Sean Glass, an investor at Novak Biddle who plans to debut an accelerator for enterprise software companies this summer.
“One team can start using the product and then it can spread within the large organization,” Glass said. “One doesn’t need a top-heavy sales and implementation process. This is really good for start-ups, and I think there will be additional winners in this space.”