Socialtext Gears Up Enterprise Expansion

For Eugene Lee, the decision this week to join enterprise wiki company Socialtext as its new CEO was a no-brainer.

Lee, formerly an executive with Adobe and Cisco, said Socialtext is helping to lead the so-called “Enterprise 2.0” charge that he called both disruptive and sustainable.

“It feels like we’re in the early phase of an exploding market,” Lee told before reeling off a list of corporate customers that
includes Humana, BASF, IKEA and Symantec among its 4,000.

Wikis, blogs and other services that Socialtext enables behind the firewall are reaching a wider range of knowledge workers than the technology initially attracted, Lee added. “This is about solving real problems; it’s more than creating a wiki for engineers to use.”

Technology research firm The Radicati Group pegs the market, for what it
calls business social software, at $920 million for 2007, sloping
aggressively upward to over $3 billion in 2011.

Socialtext did its part this week and closed $9.5 million in a Series-C round from its existing investors, which includes Draper Fisher Jurvetson, Omidyar Network and SAP Ventures.

Lee’s arrival at Socialtext won’t cause too much movement in the executive ranks. He replaces company founder and former CEO Ross Mayfield, who will stay on as chairman and president of the Palo Alto, Calif.-based company.

Mayfield, who has been very much the public face of Socialtext, said he’ll become less of a “talking head” to focus on strategic initiatives and some new wiki communities.

He began talking wikis five years ago when he had to explain what they were — and how they were different from Wikipedia. “In the last year
and a half to two years these kinds of services have become an established
part of enterprise software.”

Still, he acknowledges that the adoption of wikis and blogs requires a
different way of thinking about enterprise software, which is typically defined by rigid business rules and designed to drive down costs and automate processes. “Those rules are very different than software that augments capabilities.”

Socialtext was an early player in the team collaboration and social software market and Gartner gave it high marks in a report last month as a top “visionary” among others in the space.

“Outside of those upstarts
Microsoft, IBM and BEA,” joked Mayfield, “we’re in a great position.” But he concedes Socialtext has to “play nice” with other corporate
software it competes with. One example is that its software can run as a fully-integrated wiki component on Microsoft’s popular SharePoint server.

Socialtext is also part of the Suite Two set
of Enterprise 2.0 services for creating and managing blogs, wikis, and RSS

While Lee is a “fine addition” to the management team, said analyst David Ferris, the technology is ultimately what will make or break Socialtext.

“There is
a strong interest in wikis in corporate environments, and most tools don’t
give you the features Socialtext offers, like access controls, which are
really important in the corporate space,” Ferris, president of Ferris
Research, told

Socialtext competitor Near-Time also offers access controls in addition to a hosted and on-premises version of its wiki-based publishing platform
for business.

“We offer different levels of security, audit trails and
history so who did what is all captured,” Near-Time CEO Reid Conrad told

“If necessary, you can lock down the process and you don’t have to rely on
e-mail, which isn’t always secure and isn’t nearly as rich for different kinds
of content.

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