A lot of vendors said it was a mix of both, the first model for SMB and the second for enterprise. That makes sense. But some were pure play (i.e. no salespeople employed). Before dismissing this as crazy, think of some of the highly successful companies in this category; Basecamp, Atlassian, and Zoho come to mind. But grassroots adoption flies in the face of the enterprise's need for structure and control. So, some enterprise are pouring weedkiller on it (tip of the hat to Oliver Marks for the weedkiller analogy). Presumably, they see these young shoots as weeds and not beautiful flowers or nourishing plants. Why?

This heading was the sort of thing one heard at the conference. It usually meant that the company had not deployed something that was as easy and fun as Facebook and also "enterprise-safe." From merely observing the vendors with stands, there is absolutely no excuse for that. A lot of vendors have collaboration software that is intuitive and functionally rich and that takes care of the usual enterprise concerns about security and control.

Block IP Address X But Not Y

Clearly, though, enterprises want to block plenty of sites. In some cases, their reasons seem obscure and unreasonable to the vendors. In some cases, blocking is motivated by serious deficiencies in the vendor's software, most likely something related to security.

In other cases, the enterprise may have chosen its vendor and want to drive adoption of the product. That is a reasonable strategy in some cases. There is great value in network scale with collaboration tools. This tends to favor the top-down strategy: decide on one tool and force it on everyone. That has tended to lead to clunky, expensive, time-sucking disasters in the past. Getting that balance right is tough. The CIO's job is not a simple one.

This will give firms with big sales teams an advantage. Those big firms will acquire the smaller vendors that have traction but cannot scale on their own.

Bootstrapped vendors, aware of that reality, have either remained in the SMB market or chosen a niche. Atlassian, for example, is growing like a weed without any salespeople by focusing on developers (developers being the kind of people who resist anyone telling them what tools to use).

Overcome Three Objections to Avoid Weedkiller

According to a recent Forrester report, enterprise CIOs are concerned most with these three big issues when considering SaaS:

• Security 31%,
• Total cost 27% (i.e. volume discounts),
• Integration 22%,

Vendors simply have to address these issues. Any vendor that can't address them shouldn't even be in the business. And any vendor with a solid track record in the enterprise will have reasonably good solutions for all three. Probably not perfect solutions, but we live in an imperfect world.

Where Is the Internet Scale + Enterprise Safe Sign-On Service?

In the consumer Internet world, we speak in terms of OpenID vs. Facebook Connect vs. FriendConnect.

Meanwhile, in a parallel universe, we have the Magic Quadrant for Enterprise Single Sign-On (ESS).

It is possible that both actually do exist in the same universe and will benefit from each other. If one of the three players in consumer-land would address some of the enterprise's reasonable concerns, the table might tip in their favor. Or maybe an enterprise vendor could convince people that they can be very open and very secure at the same time. Letting the outside world (you know, those pesky customers) into the enterprise is generally a good thing. But keeping out the bad apples is equally critical.

(Image: James H. Miller.)