My TechCrunch internship has ended, and for my final TechCrunchIT post, I wanted to connect the dots I see within the enterprise space. Thanks for the wonderful time.

When Writely and Zoho Writer launched three years ago, some quickly predicted the end for Microsoft Office. It seemed so obvious: free beats paid, ubiquitous access beats the device-centric, thick-client model.

But IT departments worry about security, Excel junkies remain skeptical of reduced functionality, and airline travelers are only now getting in-flight broadband. Given enough time, these problems will be solved.In the meantime, Microsoft isn’t a dunce. Once the lumbering Redmond giant shifts to a SaaS model and monetizes at the edges, these online clones of Microsoft Office will become commodities. Do you
prefer vanilla or chocolate frosting… Google or Microsoft?

Office documents are dead.

Not because Zoho Office and Google Docs are free. But because when office suites went online, they grabbed hold of the content creation method and promptly tipped it on its side. Writing a document shifted from multiple, one-shot drafts to a single draft with multiple revisions. Online office suites killed the static document model–and file formats. (Perhaps even toolbelt office suites.)

Historically, technology goes mainstream by solving a specific problem. Word processors replaced typewriters because they could fix typos. Dropbox removed worries about my hard drive failing. Online FAQ’s replace help files. Google Docs frees me to work from any browser.

Once mainstream, new technology shifts from facilitating work-flow to rewiring the process. I used Google Docs for several months before realizing the power to co-write. Instead of copy/paste, three of us worked on a single document from separate computers. (Lotus Notes pioneered this functionality twenty years ago, but it required Notes on each machine.)

Suddenly corporate wikis are maintained by users, links to Dropbox replace e-mail attachments, and the idea of a static document is dead.Slideshare is a classic example. What began as an online repository for slidedecks–a souped-up FTP for PowerPoint–is now a destination site. For now, the metadata–tags, favorites, comments, views, downloads, etc–sits on top of a static slideshow. But how long until Slideshare adds editing capability? Then I leave a comment by altering the wording, removing a non-Presentation Zen image there, adding an entire slide here.

When Slideshare spawned its own storytelling meme, “Meet Henry,” users made modified clones of the original slideshow to suit their needs. What if they could alter the original? The line between data and metadata could get very blurry. (The ensuing copyright nightmares are beyond the scope of this post.)

No matter which side of the firewall, it’s a living document–Rashmi from Slideshare told me: “Lots of companies use SlideShare privacy options for sharing and to embed into their intranets… we cannot dig
into it (for privacy reasons)–but one of our large referrers is Microsoft.”

Similarly, wiki’s are morphing from solving today’s problems into tomorrow’s new way to create, aggregate, and filter content. According to Chris Yeh, PBwiki has a long-term vision, “to be the really simple glue across an enterprise. By adding context on top of specific buckets–Salesforce, e-mail, documents, etc–wiki’s become a powerful form of enterprise search.”

Slideshare, wiki’s, SaaS office suites–what happens when they’re integrated? (Already you can view Google Docs from PBwiki and Slideshare from SocialText.)

After the inevitable confusion, the oil and water of new technology and old workflow will coalesce into a new perspective on information. Realtime collaboration will kill the static document model. The line between documents will feel artificial–much like a database view merely constrains the output. When the community can create metadata, “Word documents” become “a print-view” of the wiki
page”–perhaps excluding comments, or maybe limiting them to only comments from the marketing team within the past week. (Prezi is already rewriting the rules on UI and interaction.)

For Microsoft, using “.doc”, “.xls”, and “.ppt” in the same sentence as “floppy” and “AOL” is a frightening prospect. And yet maybe it shouldn’t be. If you can’t dominate a platform, the next best thing is making sure your competitors can’t win either. When files become generic, platform ownership is impossible–examples include .html, .txt, and .jpg.

RIP .doc, .xls, and .ppt. You’ll be missed.

Last month, I e-mailed my entire family and suggested they setup Google Alerts on their name. When a week later someone created a malicious Facebook group slandering my sister (very uncool), I was reminded of the importance of knowing what people are publicly saying about you and your products.

When I first began working on TechCrunch, I immediately looked for a tool to alert me whenever people wrote about CrunchBase online. After demo’ing several products, I landed on SM2 by Techrigy.

Techrigy announced last week that their index of online conversations just broke the 1 billion mark. And two days ago, they announced real-time alerts, fixing my biggest complaint with the service–results previously took a day or two to appear.

Like most website analytics packages, these conversation monitoring tools face a delicate balance between simple interface and powerful statistics. Much like a scientific calculator is very powerful, but a little confusing.

Many of the products I tried were too simple–for a product like CrunchBase, which is mentioned multiple times per hour–the ability to extract trends from mounds of data is far more important than seeing individual comments.

Products mentioned less often will place more value on real-time alerts for individual mentions. I know one of CrunchBase’s competitors left a comment hyping their product on any blog that mentioned CrunchBase.

The service is clearly targeted at larger businesses. While they offer a free version for up to five search phrases, the next plan costs $500 a month.

When I hear SEO, I think of brilliant quantitative guys shut-up in an apartment somewhere running A/B split tests and writing link-bait.

Search Engine Optimization is the way companies make it easy for customers to find their website using Google. Because search engines don’t publish their algorithms, SEO is mostly reverse-engineering.

Despite the guessing game, SEO produces quantifiable results. In a down economy, evaluating success by the numbers becomes even more important.

The very nature of SEO–unknown, constantly changing, and unethical spam tactics–seems diametrically opposed to enterprise culture. So I interviewed Stephan Spencer,  president and founder of Netconcepts. Major clients include Cabela’s, HSN, AOL, SuperPages.com, Zappos, and Discovery Channel, among others.

What’s your experience with large enterprise and SEO?

When it comes to SEO, enterprise companies don’t seem to care or are clueless or both. For example, ConocoPhillips is #5 in the Fortune 500. Search Google for their brands like “76″ and the top 10 results don’t look like anything relevant. The top result is indeed the correct site, but it doesn’t seem that way from the search listing or the site itself — drivesavvy.com doesn’t even seem like it’s connected to ConocoPhillips from the domain name or from the look of the home page once you get there. That home page is a joke as far as SEO is concerned. There’s no text on it. Not even the brand names. Here’s what the site looks like to Google.

If I’m an enterprise, should I care about SEO?

It depends–but especially for large retailers,  SEO is important. It’s sites like Bizrate, eBay, and Nexttag that keep showing up in the top of Google when searching for Long Tail queries like “yellow queen size flannel sheets”.

These results suck. Where are the brands/enterprises that carry this merchandise? Where is JCPenney? Target? LL Bean? Lands End? They might be advertising through PPC, but 85% of consumers click on the natural listings.

The problem is, these brands are not reaching us where we are at, or on our terms. They are failing to engage the masses of niche markets – at a time when they can hardly afford not to. Instead they’re spending ad dollars on intrusive or avoidable advertising media (PPC, display). The culprit here is difficulty of execution with traditional SEO.

Why is this?

Enterprise and SEO is like cognitive dissonance–SEO is nimble, experimental, dynamic, continuously iterating, never-ending process. A complete anathema to enterprise IT which is project focused, do it and forget it.

There’s also an internal disconnect because SEO crosses IT and marketing. Example: changing from horrible URL’s–super long, no keywords in the URL–to cleaner, shorter URLs is a marketing driven initiative but entirely reliant on IT execution.

Part of the problem lies in that the Fortune 500 enterprises rely on their ad agencies for the “interactive” stuff but the agencies don’t know how to integrate SEO requirements with branding.

Lastly, websites are seldom built with SEO in mind; developers/programmers didn’t know what they didn’t know. It’s much like a house where the electrical wasn’t thought about until years later–a major mult-year project to redo it.

What are some examples of good and bad enterprise SEO?

EMC has a country selector as their homepage. But if you look in the Google cache, they bypassed the country selector so Google indexed the US site. Contrast that with Lenovo–nothing appears in the cache. When you search Google for “site:www.lenovo.com” their homepage is not the first result. If you don’t know SEO, this would never occur to you.

Examples of companies handling SEO well: Cabela’s (search Google for “hunting socks” for example). Another is CheapTickets (search for “disneyland tickets“).

Cottonelle is an example of a major recognized enterprise/brand failing to account for natural search. The Cottonelle site is all Flash and not friendly to spiders. Home Depot is another example, they have they have faceted (“guided”) navigation which offers “infinite filtering” and the rampant duplicate content that results is a very big SEO problem (i.e. it results in duplicate content filtering and PageRank dilution). More on this phenomenon.

Okay–let’s say I’m an enterprise company, and I want to start an SEO initiative–where do I start?

First thing–what are your constraints? No sense hiring a firm to tell you things you can’t implement.

We did some consulting with a company in the kitchen small appliances industry. They called themselves “kitchen electrics”–but although everyone searches for “appliances” they wouldn’t move away from “electrics” on their website. Very frustrating.

Second–get references from partners who are doing well in SEO. Always get references.

Third–decide whether you’re going to bring SEO inhouse, or outsource it. There’s positives and negatives to both approaches.

At Netconcepts, we created a proxy server to rewrite webpages to be more search engine friendly–the enterprise builds their site, then tells the search engine bots to look at our proxy. We clean up the URLs, the data, etc to make it SEO optomized, without huge internal IT projects. It allows sites like Cabela’s to completely outsource SEO.

I also interviewed Jessica Bowman who advises companies how to launch an in-house SEO initiative:

Why does SEO in house fail?

In-house SEO is undergoing many of the struggles usability went through several years ago. It took companies several years to learn how to integrate usability into their product development. That same maturing process is happening with in-house SEO.

Companies fail in three areas:

1. Companies hire the wrong people. They try to save costs by hiring cheaply, but many of these novices struggle to pull off results and may not have managed large projects solo yet. There are also many SEOs who are great at providing recommendations, but lack experience in the challenges involved from recommendation-to-execution. I had two calls this week from companies saying, “We hired someone and our traffic fell.”
2. SEO person isn’t involved throughout the development process. There are many places in the development life cycle where things can go wrong, and SEO needs to be a stakeholder throughout the process to make sure that things go live search engine friendly. One thing I see happening a lot is that a company adds a change for SEO, but that might be later removed by someone who didn’t understand the SEO benefits. At a minimum, SEO should be reviewing the project plan to identify where SEO needs to be involved, wireframes and page designs, and page specifications to give SEO technical requirements to programmers.
3. There’s a human side of SEO. In house experts sometimes struggle to integrate their expertise into the enterprise workflow and secure long-term buy-in from everyone involved in the website. There is also a challenge that, in most companies, SEO sits in marketing–or occasionally in product management and these roles are not typically involved in development at the level that SEO needs to be integrated. Consistently, the companies I work with find the best results when their SEO person sits in the IT department. If you’re in marketing, it can still work, you just have to set up the right touch points with IT to ensure that everything goes live search engine friendly the first time it is launched.

When twitter recently added a “Suggested Friends” feature, I was more than a little disappointed. Unlike Facebook’s “People You May Know” feature, no explanation is provided for why these people were suggested.

In an enterprise setting, the most valuable people are the connectors: “The people who know which people know what”, according to Alan Lepofsky of SocialText.

The larger the organization, the more likely someone else is working on the same problem. And the less likely you’ll find them.

Automatic “Friend Suggestions” shift the connector role from people to software. These suggestion algorithms can use all sorts of data, from mutual friends to similar content (if we both tweet the same thing) to match relevant people. If you have the data, there’s a million ways to slice it. But every attempt I’ve seen seems mediocre at best.

While touring IBM’s Innovation lab at Lotusphere last week, I was surprised to see IBM is also tackling this problem with their “Social Networks & Discovery” project (SaND for short). And it looked FAR better than anything I’ve seen previously.

Their relevant person suggestion engine (screenshot above) uses mutual connections across multiple networks, shared knowledge tags, and even values certain connections above others (like a mutual boss).

Perhaps even more interesting, the IBM aggregation and filtering system works on any entity in a system–people, textual documents, or meta-information (tags). Like Google, searching on any term returns a ranked results list. But unlike Google, pausing over a link shows the relationships between people, tags, and documents (screenshot below).

As I tweeted earlier this week, I rarely read RSS anymore. Too much content, too little time. As this information proliferation grows–on both sides of the firewall–filtering relevant people and content will only become more necessary.

This is still in the research phase, and isn’t shipping in any IBM products yet, but I expect to see it in Lotus Connections fairly soon.

(Hat Tip to TechCrunch fan Ido Guy–an IBM researcher on another project, he pointed this out to me and said, “No one else in consumer or enterprise is doing this yet.”)

Intacct just launched the Winter 2009 edition of their SaaS based financial accounting system. Major highlights include a Global Consolidations product for real-time financial reports across international boundaries, integration with QuickArrow for managing professional services teams, and a plethora of partnerships with other SaaS providers.

In some ways, this isn’t big news–just the latest iteration of a SaaS product. But corporate accounting has seen little innovation in the last two decades. (Barring experimentation with throughput accounting.) It may be the heartbeat of an enterprise, but it’s also typified by boring legislation, non-user-friendly ERP addons, and infrequent software upgrades.

So I asked the Intacct folks how using the SaaS paradigm changes things:

Currently, financial reports happen on a monthly or quarterly timeline. For international companies, gathering this data is further complicated by exchange rates and varied government regulations. By providing a SaaS back-end, we provide real-time financial dashboards–even across national boundaries and differing on-premise accounting solutions.

We’re trying to change the clunky enterprise software model. SAP’s integration of services is hugely attractive to IT, but a pain for users. By using SaaS, we can seamlessly partner with other cloud services–and our average client is now using five SaaS products.

Lastly, we’ve changed the incentive model for resellers. The majority of accounting software sales comes through the reseller channel. By giving resellers a portion of our subscription fees, they’re incentivized to keep clients happy with better on-premise support–without costing the client more. The reseller channel currently accounts for 50% of our new business, up from 20% last year. We project that to grow to 80% very shortly.

Last August, I upgraded from a simple flip phone to a HTC Touch. Immediately I began looking for a way to avoid manually entering my Gmail contacts into the phone.

After several hours of fruitless searching, I stumbled on NuevaSync–a free service that sync’d both my Gmail contacts and my Google Calendar.  Thankfully, they also support Google Apps accounts.

When I got an iPod Touch, I started three-way syncing my contacts and calendar across three platforms: Windows Mobile, iPhone, and the cloud.

As a user, this free service is a dream. I only think about it when I need to change a setting–otherwise everything is seamlessly behind the scenes. And they keep improving. They just announced iPhone multiple calendar support, and expect to break 100,000 users sometime this week.

NuevaSync maintains a low profile–they don’t charge, they don’t advertise, their website is spartan, and yet they’re hiring full-time staff.

So I e-mailed David Boreham, their CEO, with a few questions:

Why do people use the service?

A common story is a husband and wife team who want to share a calendar. One of the pair will typically begin using the service first then ask us if their spouse can share a calendar. We have doctors using the service we well as lawyers, scientists, students and even a few venture capitalists. After fixing a number of user-reported timezone bugs we know that we have users in all parts of the world (including Easter Island). We don’t really track specific companies using the service but we know from support traffic that it’s common for several people in the same organization to use the service together, with shared calendars.

How long have you been around, and what’s the roadmap for the future?

Nuevasync began public service in September 2007. Originally the service was deployed as a vehicle for testing our sync protocol implementation. Google calendar was chosen as the first data source somewhat at random, based on the availability of an API and reasonable terms of service for its use. Over time, and particularly after the release of the iPhone 2.0 in July 2008 users selected the service as a way to sync Google contacts and calendar with their phones. Nuevasync adapted to the influx of new users, deploying more servers and moving our operations to a highly reliable data center in the South Bay.

We just released support for multiple colored calendars on the iPhone and iPod touch. Also the ability to select which Google calendars sync to the device, and sync for read-only calendars (holidays, sports team calendars etc). The next big feature planned is support for e-mail push sync. Longer term you can expect us to add support for more data sources (e.g. CalDAV, other public PIM services besides Google).

How many users do you have–and what devices are they using?

We have 95313 registered users and around 800 new users per day. Device breakdown is as follows:

iPhone : 75%
iPod Touch : 16%
Windows Mobile : 7%
Noika : 1%
Other (Palm, Blackberry, PocketPC2003) : 1%

How many people are using Google Apps?

I don’t have exact numbers for Google Apps users, but based on an analysis of users’ e-mail addresses it’s a roughly 80:20 split.

Given your low profile, how do users find NuevaSync?

We don’t have good data on this but based on the timing of our big new user spikes we think that many users find articles about our service when performing an online search. In the beginning we undertook a primitive form of SEO where we’d try Google searches along the lines of what we’d expect a prospective user to do (e.g. ’sync google calendar windows mobile’ — this was long before the iPhone). Then in the search results we’d look for any pages that had editable content (typically blog posts or forums), and we’d add a comment to the page pointing out our service as a possible solution to the problem being discussed. The current set of articles and forum posts grew from this initial seeding effort and the early adopters that generated.
We also know from user feedback that they often recommend the service to friends and colleagues.

Napera, a recent Seattle-based startup, is looking for 100 IT and Network Managers for a closed beta test of their new 24-port gigabit network switch. Details below.

Napera is testing a relatively new concept–targeted security software subscriptions installed onto the network hardware. These security subscriptions recognize that different industries face different threat profiles–for example, the health industry versus the financial services industry.  Each industry is also willing to pay for different levels of security. CEO Todd Hooper explained it to me:

A good analogy is the trial antivirus software that is bundled with
computer. Imagine if networking hardware came with bundled security features
you could activate for a trial and subscribe to remotely, rather than being
a new single function box you had to buy just for this purpose.

The recent mini-epidemic of the Conficker worm shows that breached network security remains a very real threat for the enterprise. Networking hardware is now sophisticated enough that installing applications on the switches themselves results in extremely fast and cost-effective deployment–particularly for businesses too small to hire a full-time security guru.

On the flip side, subscriptions to security in the cloud means your usage statistics can also be collected for continuous improvement. I don’t know if Napera intends to do this, but it certainly seems the logical next step.

Beta details:

Napera is looking for 100 IT and Network Managers to join a closed beta test
of our most innovative product features. We will ship you a fully
functional, business class, 24-port gigabit network switch. Install it on
your network, use it, and keep it, with our thanks for participation in our
beta program. We will ask you to turn on and use advanced features, never
before seen in network switching equipment. Give us your feedback, ideas,
and comments.

The beta test is open to US residents only and will take 90 days.
Participants responsible for hardware shipping and handling.

Apply to participate in the Napera Project Indigo Beta Test at
http://www.surveymonkey.com/s.aspx?sm=3_2bo0W86aSCZR65aT2zIU5g_3d_3d

IT Hit just launched the Beta version of their web-based file manager.

Certainly the ability to create, edit, and save Microsoft Office Documents on the server–without downloading the file or any plugins–is the most immediately useful feature.

Unfortuntely, the Microsoft Office integration requires Internet Explorer; however, I successfully used the IE-Tab Firefox extension to edit a Powerpoint deck within Firefox.  Try it yourself at the demo site–no registration required.

On the backend, the file manager uses the WebDAV XML protocol to exchange data with the server. It will run on any WebDAV-compliant server based on .NET Framework, Java, PHP, or any other programming language.

Because the file manager was built entirely in Javascript, it works across the four major browsers–Firefox, Internet Explorer, Chrome, and Safari–in any OS, without requiring additional third-party software.

The pricing varies depending on your needs, and I found it a little complicated to interpret–but don’t expect to get started for less than $1250.

Update: IT HIT e-mailed me to clarify pricing.

Our main target audience are the developers of DMS/CMS/CRM systems that require standards-compliant communication with a server for file management. For such customers we provide a Redistribution License: $2250.
Usually this license is for customers that want to redistribute IT Hit AJAX File Browser as part of their product.

Users that want to install AJAX File Browser on a single website (single domain name) can purchase Single Server / FQDN license: $1250

Often our customers require both client and server WebDAV library, so we also provide packages with significant discount:
IT Hit WebDAV Server Engine for .Net Redistribution License + IT Hit AJAX File Browser Redistribution License: $3350
IT Hit WebDAV Server Engine for .Net Single Server License + IT Hit AJAX File Browser Single Server / FQDN license: $1950

More info on the AJAX File Browser Homepage.

Tomorrow morning Zoho will announce new import functionality for migrating Google Notebooks into Zoho Notebook. This comes on the heels of Google’s decision to stop Google Notebook development and quit adding new accounts.

Also updated is a the Firefox Extension for Zoho Notebook. Much like Delicious, the Zoho extension provides Notebook access via a pop-up menu. Handy functionality includes web page screenshots-both entire page and specific selections, quick text add, and a synchronized copy of your notebook.

Migrating is simple because Zoho allows sign-on using your Google account. Just sign into Zoho with your Google ID, install the new Firefox extension, and type a command when you visit your Google Notebook account. More details Zoho’s blog.

IBM just announced Lotus Notes ActiveSync support will be released later this year. The code is already live, and was demonstrated in a seminar earlier today at Lotusphere.

This is native integration with the iPhone–within the native mail, calendar, and contacts. Previously, iPhone users were forced to use the mobile Safari browser to access the Notes Web Access interface.

Lotus is playing catchup with Microsoft, who released push e-mail for Microsoft Exchange in March 2008.

No news yet on Android support, though Ed Brill, IBM Director of Messaging, said few customers are requesting Android support. Similarly, nothing was said about supporting the new Palm Pre platform.

Genius Inside just released a fully-featured SaaS version of their project management software.

And by fully featured, I mean more than just advanced task tracking–like 37 Signals’ Basecamp product. Genius Project includes Gantt charts, project portfolio analysis, and tracking contractor progress in both relative and absolute terms.

I just watched a demo here at Lotusphere, and was impressed by the customization possibilities. The demo guys completely changed the project requirements–using only the browser menus–in about 15 minutes.

Their website emphasizes the Notes/Domino integration, but the new SaaS version is completely stand alone.

SaaS models are known for fast deployment, and Genius Project is no exception. Several recent installations were small teams within large companies who weren’t willing to wait for the IT department.

They also offer on-premise versions for operating behind a firewall, exporting to Microsoft Project, and a new Blackberry plugin.

For a small web-startup, the software is completely overbuilt. But for medium-large enterprise–or project management teams within large enterprise–this might be a cheaper and more flexible option than thick-client stalwarts like Microsoft Project.

I’m at Lotusphere 2009 today through Thursday.

Main announcements this morning: IBM highlighted partnerships with LinkedIn, TripIt, Skype, and Salesforce.com. On the internal side, the Notes crew demo’d very functional Blackberry integration, voice chat integrated within Notes, and a very nice browser-based UI.

The emphasis was clearly on social computing and collaboration–including the new Lotus Live–IBM’s latest SaaS effort. Quite timely, given my controversial post on Lotus Notes and the Web 2.0 world.

Clearly, IBM recognizes the growth of social collaboration, and they’re trying to funnel that through the front door–yes, you can use Flickr, Skype, etc–but everything is designed to happen within the context of the Notes platform.

From an IT administrative perspective, this enviroment is far easier to manage. But from a user’s perspective, collaboration squishes through walls–trying to make Notes the knowledge management OS feels restrictive.

While these worldviews continue to collide, they’ll never merge. As testimonials this morning from Coca-Cola, HSBC, and NetJets demonstrate, large enterprise prefers a single piece of software for scalability. Despite users continuing complaints about the lack of flexibility.

Buzz Bruggeman of ActiveWords and I discussed this tension between partnerships and single piece of software–he wondered why IBM didn’t partner with Twitter: “If the next phase  of the ‘net is about discovery rather than search, than anyone in the enterprise space should harness the power of twitter. Otherwise, they’ll be left behind.”

Don’t expect a lot of live-blogging. For real-time updates, follow the twitter stream. Otherwise, wait for the daily TechCrunchIT recap. (Or ping me on twitter if you want to meet up.)

Enterprise RSS promised to be far more than just Google Reader on steroids.

It allows groups to keep abreast of private updates using push technology without cluttering up e-mail. Similarly, I use SM2 everyday to monitor news about CrunchBase. Currently I get a daily e-mail, but it’d be nice if I could subscribe to a password-protected RSS feed.

On Monday, Marshall Kirkpatrick claimed enterprise RSS is dead–citing Newsgator’s continued infusion of cash as evidence the market is dead. Brad Feld responded with his thoughts on why enterprise RSS is alive.

Yesterday, I spoke with JB Holston, Newsgator’s CEO, and asked him for his thoughts:

You’re known for RSS readers–what problem do you want to be known for solving?

First, though our brand is associated with consumer RSS readers–FeedDemon, NetNewsWire, iPhone RSS reader–we never intended to build a consumer-focused product and flip it to Google. From the beginning, we were targeting the enterprise.

We want to be known for solving collaboration problems. We have social widgets, for example Reuters widgets use our technology. We also have a Social Sites application that basically turns Microsoft SharePoint into Facebook for the enterprise. [Screenshot below.]

Our enterprise RSS service has two sides: a Saas deployment used by approximately 150 vendors, and an on-premis server that sits behind the firewall–currently about 125 clients.

Why do you keep raising cash?

Newsgator was first funded four and half years ago–really, we’ve had three rounds of funding from separate groups. Technically it’s been six rounds, but only three events with different lead investors. So far we’ve raised $39 million.

This seems like a lot if we were just an iPhone developer (our iPhone application made TIME magazine’s top 10 list), but as I said before, we’re very focused on the enterprise. Raising $39 million is common in this space.

What’s your response on the death of enterprise RSS?

Who cares? It doesn’t have to be called enterprise RSS because that’s just the backend protocol. From our perspective, enterprise RSS–whether deployed for CMS, or portal enhancement, or social computing, or replaicing external information sources–is just the enabling technology.

Our customer’s don’t come to us and say “we want enterprise RSS”. They come with specific problems like “fix our portal”, “help us drive collaboration”, etc, and then we go use RSS. They don’t care how it happens.

From our point of view, the conversation has moved beyond RSS in the blogosphere. It’s a little startling to see people saying “because enterprise startups require cash, the enterprise RSS market is dead.”

RSS is fabulous technology, and if no one is talking about it, that’s just because the market matured to emphasizing solutions, not technologies.

It’s certainly an interesting argument, but I don’t think the market’s moved into understanding the power of enterprise RSS.

Maybe we’re just too stuck with bad inbox habits to worry about disentangling news from our inboxes. Certainly we’re just beginning to use online collaboration without having to think about it. Only time will tell how deeply RSS penetrates the enterprise.

These days, when I have  technical question, I reach for Google long before customer service. What if customer service could reach for Google?

Salesforce.com just launched a new customer service application called Service Cloud. The new application, built on a SaaS model, tries to capture the crowdsourced pools of knowledge floating across the internet and use them for commercial customer service.

Traditional on-premise contact center technology is disconnected from the experts and knowledge found in the cloud. Yet so many customer service questions are already answered online in forums, Facebook, Google, Amazon, or others. Or the answers are sitting on your personal Instant Messaging history, e-mail history, or corporate intranet.

The Service Cloud includes plugins to each of these environments. (See screenshots.)

“The Service Cloud is the first customer service solution that empowers companies to join and manage all service conversations happening in the cloud,” said Marc Benioff, chairman and CEO of salesforce.com. “This has been made possible through the emergence of native cloud computing platforms like Force.com that are built to harness the power of other clouds like Facebook, Google, and Amazon.com.”

Here are the major components:

1. Online communities–talk with the company and with other customers.
2. Connections to existing social networks and the blogosphere–funnel existing knowledge into a company’s knowledge base.
3. SEO–make sure your company’s community shows up high when I reach for Google.
4. Sharing with business partners–the cloud makes it easy to share portions of your knowledge base with partnered companies.
5. Contact center technology–give your customer service agents access to this knowledge base.

It’s certainly an interesting idea. I trust my friends to not only know technical answers, but also to tailor their explanations to my competence level. If that knowledge could be captured and systematized, it could save a lot of money on call centers.

But don’t expect miracles. Unlike CRM, customer service is a much squishier problem. In theory, capturing the knowledge in the cloud sounds great. And it’s easy to suck in via RSS, API’s, and the like. It’s much more difficult to sort and quickly regurgitate for my specific problem.

For an enterprise looking to retool their customer service system, moving to the cloud makes sense. The SEO benefits alone might be worth it.

A little over three years ago, Ray Ozzie wrote his famous memo re-focusing Microsoft from software to services. We started seeing results of that memo last October, when Microsoft announced Windows Azure.

The SaaS emphasis is also hitting mainstream products like Microsoft Exchange. This morning Steve Gillmor and I talked with Rajesh Jha, the VP of Development overseeing Microsoft Exchange, about the upcoming release of Exchange 14.

While he wouldn’t say much about the actual release timeline, he did say they’ve been working on Exchange 14 for about 18 months. Currently they have 3.5 million test users, mostly in university settings. He contrasted that with Exchange 2007, which had a mere 5,000 test users at the same point in development.

He also highlighted the emphasis on SaaS from the ground up:

Exchange 2007 was first a server, then we built on top of it to make it a service. The feedback on the service came too late–the server design was already complete.

While there are about half a million seats of Exchange 2007 SaaS, the huge number of test users for Exchange 14 means it’s currently the largest multi-tenet Exchange offering–and we haven’t released it yet. From the beginning, the emphasis on co-developing the server and the service aspects of Exchange 14 allowed us to perform much more robust usage tests.

The emphasis on SaaS technology has also attracted a few frustrated Notes users. According to Rajesh, about 5.1 million Notes seats have switched from Notes Servers or Notes Online.

He gave more specifics on learning derived from 3.5 million testers:

From an IT administrative perspective, the university was surprisingly similar to large enterprises. Users struggle to use the software, and administrators struggle to balance privacy with the need to research e-mails for compliance and discovery issues. We’ve tried to architect Exchange 14 in a way that facilitates this.

Our major learnings are scale based–having 3.5 million testers versus 5,000 is no comparison. Since this is the first full-integrated SaaS version from the ground up, having this many users taught us how to optimize deployment, core technology stuff like I/O server footprint, and minimizing help desk call through better usability and web access.

All in all, it sounds like this next version of Exchange should be well-vetted.
(Which means the inevitable frustrations will be all the more aggravating!)

Pirelli Broadband Solutions, the broadband arm of the Pirelli Group, announced they adopted Neptuny’s Caplan SaaS.

Capacity management has long been the domain of large enterprises; it wasn’t cost effective for smaller companies. The cost to implement a capacity management system was higher than the cost savings from optimizing capacity.

Neptuny claims the new SaaS version of their Capacity Management software uses the benefits of the cloud to make capacity management accessible to small-medium enterprises. No on-site infrastructure installations, the servers are supported by Neptuny, and upgrades happen seamlessly. Pricing plans can be tailored specifically to client needs. And the entire interface can be access through the web.

The largest cost of Capacity management remains the people time–analyzing and implementing a new capacity plan requires manpower. But it’s certainly an interesting extension of the SaaS model, and should open up a sweet spot for small-medium size enterprises.

Expect more and more enterprise management tools to hop on the SaaS bandwagon.

LogRhythm just joined the Payment Card Industry Security Council (PCI) with the goal of making log info more secure.

IT departments typically use logs to monitor security breaches, whether malicious employees or outside hackers. While it can indicate unsuccessful attacks, the data is particularly valuable for identifying actual intrusions. 

Just this week, the IRS put out a report saying they weren’t properly collecting cybersecurity logs for the past 20 months, meaning taxpayer data could have (or may have) been hacked over the Internet. 

While the PCI group is focused on payment security–it was founded by American Express, Discover Financial Services, JCB International, MasterCard Worldwide, and Visa Inc.–the addition of LogRhythm will extend the focus toward making logs across all organizations more secure. 

“A significant percentage of LogRhythm’s customers must comply with the Payment Card Industry (PCI) Data Security Standard (DSS), so we have acquired deep domain expertise in helping organizations meet its requirements,” said Andy Grolnick, president and CEO of LogRhythm.

The New York Times had reported that president-elect Barack Obama would announce a national CTO today, but no one has been named as of yet.

Also unknown is just how much power the new CTO will wield–don’t expect rumours of Steve Jobs to come true if it’s just a powerless propaganda role.

This morning I spoke with Sophie Vandebroek, CTO of Xerox about some of the lessons learned during the Xerox turnaround over the past seven years. (The company turned a net income loss of $300 million in 2000 into a $1.1 billion profit in 2007.)

Her recommendations for the future US CTO:

• Go green: Sustainable and environmentally-conscious technologies are a priority right now, and the US should be leading the charge in investing in and funding green research.
• Go global: Work with other world leaders in increasing transparency and sharing knowledge.

• Go long-term: Rebuild the foundation of science, technology, and math/engineering in the United States. Two-fold: 1) Allowing more high-tech H-1B visas to be awarded to deserving scientists will help US compete with countries that are churning out and retaining world-class engineers. 2) Increase the academic focus on these topics.

Sophie repeatedly emphasized a long-term view of R&D investment, despite the inevitable criticism. She repeated a quote from the Xerox CFO during the difficult times in early 2000’s: “Why should I rescue today by jeopardizing tomorrow?”

Xerox currently spends close to a billion dollars on R&D, and credits that with enabling them to pay off $17 billion in debt. And they continue to reap the benefits: Today, more than two-thirds of the company’s printers and document management offerings come from R&D projects launched amidst much criticism in the early 2000s.

ReinventMobile recently released a study of user preferences regarding their mobile PC. The study analyzed close to 4,000 conversations about mobile PC’s across the web to extract user likes and dislikes about current mobile PC’s.

Most of the findings (below) are mere statistical validation for common sense. Things like wishing they could revert from Vista to XP, faster end-solution (leaner software or faster hardware, users didn’t care),  and longer battery life.

The surprise was how strongly users felt on a few particular issues–they abhorred long boot times, hated trialware (prefer to just pay up front), and wished wi-fi issues would disappear.

Main findings:

• Boot-up time is wasted time that lasts too long and reduces productivity
• Too many unnecessary software add-ons are slowing down mobile PCs
• The tribulations of too many trial software offers and applications is an issue
• Heat build-up and noise during continuous operation annoys users
• Power management and batteries need a boost to buy more operating time
• Trying to connect is often a disconnect, particularly in the wireless world
• Weight weighs heavily on their decision about what system to buy
• Poor ergonomics and badly designed input devices are a strain
• Insufficient RAM, weak graphics, faulty motherboards are big areas of complaint

Full study available here.

Yesterday, major websites across the US slowed to a crawl when Level 3 Communications, which operates one of the largest internet backbones in the world, experienced technical difficulties.

For knowledge workers, losing internet access is a big deal. (How much of your job would be impossible without internet?) But the internet not only enables our jobs, it also frees us to collaborate globally while working away from our desks and away from the normal 8-5 (should we choose).

The freedom of working from home means we are not forced to leave work. The very technology that’s freed us has become our lifeline. As a result, this fascinating survey shows we now feel guilty if we don’t work during the holidays.

Currently, I’m writing from a friend’s ranch house in the middle of North Dakota. In previous years, my cell phone wouldn’t work, nor would my EVDO modem, and dial-up speeds never topped 30Kbps. Coming here meant zero functional internet–a guilt-free vacation.

But this year my cell modem works. Tonight, I’m able to wrap up some last-minute work. And I’m also faced with a choice–do I unplug for three days as originally planned, or do I check e-mail tomorrow?

Research shows knowledge workers can’t afford to NOT spend time away from work exercising, sleeping, and de-stressing. Continuing to work simply results in feeling productive, rather than being productive.  Personally, I find my creativity withers, my energy tanks, and my planning horizons shrink.

But knowing and doing aren’t the same.
As a co-worker observed, “This is the season when everyone PRETENDS to not work.”

See you in four days.

Next month is the annual Lotusphere conference. IBM is giving two free tickets to TC readers–leave a comment saying why you’d like to go to Lotusphere, and we’ll pick the winners by Monday morning. (Note: Passes cover conference registration only, not travel/hotel.)

Few pieces of software are as polarizing as Lotus Notes. When my last job forced me to use Notes, I found the interface clunky, the graphics Win 95′esqe, and the workflow architecture non-intuitive. Granted,  I was using Version 6.5 (Notes is now on Release 8), but even so I found it frustratingly unproductive. And I’m clearly not alone.

Probably the most famous Notes aficionado is David Allen of Getting Things Done fame. (The eProductivity application–built off the Notes platform–is David’s personal GTD tool.)

When I recently attended David’s GTD seminar, I was struck by the contrast between his fresh ideas, and the outdated nonsense of the Notes 6.5 interface. During this podcast, David directly asked, “Why do end users hate Lotus notes?” And then pointed out that most Notes users have no clue of the power of the tools they are using.

Which leaves me wondering–has IBM’s Lotus Notes lost touch with the user-centric web 2.0 world?

To answer these questions, I interviewed Kevin Cavanaugh, IBM’s VP in charge of the Notes/Domino group. Also joining us was Ed Brill, IBM’s Director of Messaging and Collaboration.
(My conclusions after the interview.)

Most people I talk with think Notes is dead or dying…

Notes has had seventeen straight quarters of growth. This year alone, we experienced 17% growth in Q1, 20% in Q2, and 10% in Q3. Over 60% of IBM business is overseas, and that’s mirrored in Lotus. Currently, out of the approximately 46,000 companies using the Notes/Domino platform, only 30% are US based.

What’s your target customer size?

Traditionally, IBM as a whole has focused on large enterprises. [The Notes group] average customer is a little smaller than the rest of IBM–we’re certainly more active in the small to medium business market.

Are you jumping on board the cloud bandwagon?

Generally, security concerns and the economics of cloud offerings aren’t as appealing to IBM, and larger enterprises. However, we recently released several cloud offerings for Lotus, including the Lotus Foundation, a remotely managed appliance targeting companies smaller than 250 people.

What’s up with the clunky UI?

Until R8, the UI was from 1995 era. We kept renovating under the hood, but not the UI. For R8, we significantly improved the UI, including over 2,000 usability tests.

New UI:

Clearly, you’re marketing to IT managers. Are you reaching out to end users?

Ed: We’re actively reaching out both online (Facebook, LinkedIn, YouTube, Twitter, etc) and offline, trying to help people understand the power of Notes. When I was last in London, I met with a blogger to try to understand why he was so frustrated with Notes.

Why do so many people hate on Notes?

Ed: Users live in their messaging environment, and blame everything from network problems to a full inbox on Notes. But in this case, the ease of Notes deployment means many current installations are ten years old or more. They’re functional from an IT perspective, but still using the older UI.

Previously, I suggested that the next wave of knowledge management innovation may come from consumer applications invading the enterprise space. What are you doing to make the enterprise more accessible to users? (How are you avoiding a device-centric model?)

Ed: Notes has an online component–not just e-mail and calendar, but multiple collaborative tools including integrated IM, bookmarking, etc. We support Blackberries, Windows Mobile, and iPhone. RIM, in particular, is a huge partner, not just because they’ve deeply penetrated the enterprise space, but because they’re actively supporting this partnership. We’re also starting to partner with more startups building off the Notes platform–startups who traditionally weren’t in the enterprise space.

It was a fascinating interview–especially because IBM admits there are things that WERE wrong with Notes…

Over the past few years, Notes lost touch with users. David Allen may love the power, but those features are useless if people can’t figure out how to access them. It isn’t just poor training either–a proper UI intuitively guides users. (Note: I haven’t used R8, so can’t comment on current UI.)

What does the future hold for Lotus?

Clearly, Lotus is making money, and growing. Few web 2.0 companies can claim seventeen straight quarters of growth!

But refocusing on the international market avoids questions about Notes growth in the US market–a key group of core “small-medium enterprise” customers.

According to eProductivity founder Eric Mack, Lotus must shift focus:

The secret to a renaissance with Lotus Notes will be to focus on what end-users are doing with Notes. Come on, we are living in a web 2.0 world; users expect to have a say and they want to take ownership of the tools that they use. As long as [IBM] perceives Lotus Notes as something pushed down from the top–part of the ’system’–the tools won’t become personal.

Couldn’t have said it better myself!

Update: Originally I’d quoted Kevin as saying 10,000 companies use the Notes/Domino platform. Ed e-mailed me to say it’s actually 46,000.

This summer, I worked under marketing thought-leader Seth Godin. I’ll never forget his quote about innovation: “Creativity thrives under constraints.”

Last spring, I spent a week shadowing one of the world’s top lean manufacturing experts–a Japanese sensei who had worked under Taiichi Ohno. The lean manufacturing movement began when the Japanese realized they couldn’t directly compete with Detroit. So they innovated the car manufacturing process. Their success is evident.

Gradually, concepts from the Toyota Way permeated all manufacturing industries. But only now is it starting to hit mainstream knowledge management process–like software development. Wikipedia calls it “Agile Software Development.”

Certainly, moving to Agile isn’t pain free–there is risk involved–but companies that take the risk consistently report strong results, including those listed on the banner above. (Expect it to be flavor of the week if you apply it like the flavor of the week.)

On Friday, I interviewed Ryan Martens, CTO & founder of Rally Software, about agile development. (Rally offers Agile lifecycle management products and is a key player in the online Agile development community.)

Ryan told me that approximately 30-40% of ISV’s have begin experimenting with Agile practices, but it’s only penetrated 10-15% of major enterprises. Enterprises typically use success metrics oriented towards cost, rather than time-to-market.

If you want to experiment, Rally recently created an ROI calculator based on previous client work. Some of it feels like smooth marketing, but there’s also a few gems about the radically different paradigms in Agile development.

I wonder.
If Seth’s quote implies Agile adoption rates will skyrocket in the face of a tanking economy.

A friend of mine who recently switched jobs.

I receive my fair share of PR pitches for surveys, analyst reports, and experts offering their opinion. Mostly, I pass–I prefer to post news, not opinions.

But with over 100,000 tech employees laid off recently, this survey about orphaned user accounts–accounts left active when an employee moves on–seemed particularly timely.

Risk=probability*consequences. While the probability of someone maliciously accessing data seems low, 15% of the respondents reported this happening. And the consequences can be serious.

Symark International surveyed more than 850 security, IT, HR and C-level executives across all industries.

Highlights:

42 percent of businesses do not know how many orphaned accounts exist within their organization.

30 percent of respondents said they have no procedure in place to locate orphaned accounts.

Approximately 27 percent of respondents said that more than 20 orphaned accounts currently exist within their organization.

More than 30 percent of respondents said it takes longer than three days to terminate an account after an employee or contractor leaves the company, while 12 percent said it takes longer than one month.

More than 38 percent of respondents said that they had no way of determining whether a current or former employee used an orphaned account to access information, while 15 percent said that this has occurred at least once.

More details.

Let’s face it–no matter how tech savvy Gen Y is, enterprises will forever need an IT department. (Some employees can’t figure out how to turn on their computers.) But as more and more data moves to the cloud, the role of IT will change.

For example, Cathedral Partners contracted with Appirio to build an entirely cloud-based database on the SalesForce.com platform. The new system was designed and developed in less than four months by Appirio, and it works seamlessly with Cathedral Partners’ existing Salesforce CRM application.

Michael Wolverton, Cathedral Partners CEO, told me that “Security and scalability were the major obstacles for building out own application–by using the Force.com platform, we shifted those responsibilities onto them.”

It’s an interesting dilemma–the reverse of the classic Spiderman quote “With great power, comes great responsibility.” With much of the IT responsibility,outsourced, Cathedral Partners is now entirely dependant on SalesForce.com and Appirio to keep everything running. Similarly, their ability to grow is tightly intertwined with Appirio.

Granted, Cathedral Partners is a small firm, but it’s no small feat for every single employee to focus on working with clients. Similarly, Appirio last year had 500% year over year growth as measured by revenue.

And the underlying platform, Force.com’s Sites technology, has more than 51,800 customers including such heavy hitters as Sprint Nextel and Dow Jones Newswires. Previous coverage here of Force.com.

JackBe, an enterprise mashup company, today announced a $5 million funding round and appointed Wayne Jackson as the new Chairman of the Board.

They’ve raised at least $14.5 million, counting the $9.5 million they raised a little more than a year ago.

The $5 million funding was secured from existing investors including Harbert Venture Partners, Core Capital Partners, Blue Chip Venture Company, Intel Capital, and Darby Technology Ventures. The investment will be used by JackBe to expand sales, marketing, and partner activities worldwide.

JackBe’s mashup concept was explained more fully in our previous coverage.