Social Networks Not Ready for Business?

Social networks like Facebook and MySpace have become enormously popular among consumers. But are businesses really prepared to embrace them?

Many businesses aren’t ready to throw open their networks to Web 2.0 traffic unless it meets certain thresholds.

There must be a clear business value and assurances that services don’t pose a security threat.

“I would argue that right now, with the economy where it is, there has to be a clear and compelling case for social networking in your organization,” Nucleus Research analyst Rebecca Wettemann told

“Otherwise, it’s not going to get approval. Certainly the CFO isn’t going to sign off on something that looks like ‘that Facebook thing my kids are on.'”

Wetteman groups social networking with other collaboration tools that have to prove their value before being adopted. “It’s not a field of dreams, there has to be a reason for people to use it,” she said.

“A sales team that can get more details about an account or better ideas on how to sell a client; there’s real value there. The other issue is participation. If one person is doing most of the contributions to the Wiki, that’s not going to cut it.”

Upstart company Central Desktop would like to get businesses on board. It has a set of collaborative Web 2.0 tools for small groups and organizations it thinks is just the ticket for companies that can’t afford higher priced offerings.

Designed as a Software as a Service (SaaS) offering, Central Desktop recently introduced an enterprise edition that starts at $500 per month for up to 100 users internally.

The Wiki-based collaboration platform integrates real-time Web and audio conferencing tools. Central Desktop claims the Obama campaign used its product during the Democratic primaries.

Central Desktop CEO Isaac Garcia said he downplays the Wiki aspects in pitching the platform because less technical employees don’t get it. “We find a lot of users struggle with that concept, basically we’re offering a collaboration platform,” he said.

Garcia said the enterprise edition of Central Desktop offers an extra layer of security. “We can lock down at the IP level and restrict access to specific offices. And we give IT the flexibility to put in whatever password rules they want; if they want, for example, to have them expire and changed every 30 days or whenever. The IT folks like that.”

Intel’s CEO weighs in

Intel’s top executive isn’t quite sold that it’s time to jump in. Add Intel (NASDAQ: INTC) CEO Paul Otellini the list of business leaders skeptical about whether social networks are ready for prime time in the enterprise. This is not to see he doesn’t see a big upside to their eventual adoption.

“I see it as a big opportunity I don’t see any companies addressing,” Otellini said during a presentation at the Web 2.0 Summit earlier this month.

He said IT managers have to be sure the services have adequate security and manageability. There is “a lot of work to do getting Web 2.0 behind the firewall,” he said.

Paul Otellini at the Web 2.0 Summit
Intel CEO Paul Otellini speaks at the Web 2.0 Summit
Photo: James Duncan Davidson

That may come as news to companies like Socialtext and others, which have offered social networking tools for the enterprise for several years now. In fact, Intel is an investor in Socialtext and parts of the company use the product.

During his demo, Otellini showed a prototype social networking system that could help orient a new employee. The graphics-rich screen displayed a diagram of connections between the user — represented by their photo — to their colleagues photos and profiles. It also offered links for expertise relevant to her team.

“I would say Paul Otellini laid out a vision we’re close to delivering after six years of hard work,” Ross Mayfield, chairman and co-founder of Socialtext, told

“This quarter is the strongest pipeline we’ve ever had,” said Mayfield. “Part of it is we have a new version of the product. But also, we’re in a period of uncertainty and the only constant we have is change. That means organizations more than ever need to sense the changes in the market and in their organizations and respond.

“Your people are your competitive advantage. If you don’t find ways to have your people work better together, which is where social networking comes in, you’re not going to survive.”

Next page: Reaching the Next Generation

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The new generation

Some analysts argue that companies that don’t embrace Web 2.0 and social networking tools could risk attracting top level talent to their ranks.

Majid Abai, CEO of online community tools provider Pringo, agrees. “I don’t see how you can get around it, these are the tools this generation is growing up with,” said Abai. “Going back a few years, if you didn’t have email you were considered a backwards organization.”

But it may not be distinct social networking products and services that win the enterprise. Abai envisions social-networking functions built into well-established business software categories such as enterprise resource planning (ERP) and customer relationship management (CRM) applications, enabling colleagues to collaborate more easily and share knowledge on certain topics or customers.

He also thinks organizations will incorporate social-networking capabilities into their intranets to enhance internal communication between employees as well as external communication with partners.

IDC analyst Caroline Dangson said it’s really up to each business to decide how fast and to what extent it wants to hop on the social networking bandwagon.

“People have expectations on the consumer side that comments shouldn’t be prevented from being posted,” Dangston told “But businesses clearly require a higher level of security and moderation.”

One size does not fit all

With budgetary and security concerns, just how and when social networking creeps into the enterprise is likely to vary by company and perhaps even industry.

Socialtext’s Mayfield also points out it’s not just a question of consumer-type social networking migrating to business, but developments specifically tailored to enterprise needs.

He notes two examples his company is working on. One is a kind of micro-blogging or Twitter-like tool designed for the enterprise and the other is SocialCalc, a “social spreadsheet” being developed with Dan Bricklin, co-creator of VisiCalc, the first spreadsheet program for personal computers.

Maybe these are exactly the kind of innovations that Otellini the business executive – not the chip guy — is really hoping to see in the business world of Web 2.0.

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