The Coming War for the Social Workplace
December 19, 2011
The hard-nosed competition for billions in corporate software spending is heading for an improbable showdown: Will the boss “like” that product prototyping cost projection?
Last week Salesforce.com, a leader in cloud-based corporate software, bought Rypple, a little-known outfit that specializes in creating and observing what is called “the social enterprise” — which uses things like Twitter posts, status badges and Facebook-esque likes to set goals, manage teams and recognize performance.
Rypple is at the far end of a movement to sell companies on the idea that the modern worker, armed with a cellphone and a tablet computer, having access to a nearly infinite amount of computing power in the cloud at all times, is a new kind of beast. Just as our social lives have changed because of Twitter and Facebook, the argument runs, so too must our working lives change…
Salesforce did not say what it paid for Rypple, which was financed with just $14 million and had a few notable young companies, like Spotify and Facebook, among its clients. Salesforce executives say the social product will make its way into most Salesforce software, however.
“This is a big step in a different direction,” said John Wookey, the executive vice president for advanced applications at Salesforce. “Social software is like cloud computing 10 years ago. We will redesign core applications to make people work better.”
Initially this will mean incorporating more rapid communications and updates about projects in Salesforce’s products for the management of sales and product services. Longer term, Mr. Wookey said, software that closely follows and provides feedback on what everyone is doing is “going to drive a new management model for industry.”
Marc Benioff, the co-founder and chief executive of Salesforce, figures that orientation also gives him an edge over larger competitors like Oracle and SAP of Germany. Most big enterprise software, he notes, is for back office functions like finance and manufacturing. Cloud products like Salesforce, he says, will attack front office functions like sales, marketing and customer service, where there is less competition.
With its emphasis on collaboration and quick completion of tasks, “the social enterprise model will blur what is sales, what is service and what is finance,” Mr. Benioff said in a recent interview. “This isn’t about supply chains,” he said, “this is about the most important relationship a company has, the customer.”
While they are unlikely to start offering products that award gold stars for good e-mail, traditional sellers of enterprise computing products and services, which globally make up a $3.5 trillion annual business, are also jumping on the trend to social business. Cisco Systems, usually a maker of networking hardware and software, is investing heavily in collaborative tools, particularly video, to better run globally dispersed teams.
I.B.M. sponsors global “jams” that are something like the weekend-long “hackathons” run by Facebook and others, bringing people from different corporate functions together to spur innovation on the fly. I.B.M. also does a lot of internal research on social networking, though its own policies on such communications have a distinctly “old company” feel. Among younger tech giants, both VMware and Google sell new kinds of software for collaboration on the fly.
This month, SAP said it would pay $3.4 billion for SuccessFactors, which also looks at work processes and tracks jobs. SAP’s vice president, Sanjay Poonen, said his company would expand the business by buying and building “a suite of applications for the cloud” in areas like travel and expenses.
That kind of growth makes sense, because the usual customer for this kind of software, which also functions as a kind of ongoing performance review, is the personnel department. SAP will also increase investing in social software, Mr. Poonen said, but wants to start with more conventional products “that touch every employee.”
To Mr. Benioff, “SAP hasn’t offered a vision for the front office” with its plan for SuccessFactors. With his social software, he said, “we can integrate our products to connect to their general ledger product, and transform how their customers collaborate, build and sell products.” More than worrying about SAP and Oracle, he said, “I worry about how to transform my leadership” to be more social.