How to get bought by Google (or IBM, or Oracle)

Startups are trailblazing in the enterprise sector again, but where will the trail lead?

May is a month of rebirth and new beginnings. It's a time when flowers are blooming, trees are flowering, and young bucks lock horns in battle over the privilege of choosing a mate. Those kinds of biological imperatives are a bit masked in the super-refined atmosphere of Silicon Valley, but it's safe to say that betrothal is on the minds of many a young company these days. They're complex emotions, to be sure, but they find their truest expression in a question that flits across the mind of many a traveler on Route 101 or, if articulated, is done so only in whispers: "How do we get bought by Google?"

After all, despite all the buzz surrounding new companies in the space that's been dubbed "Web 2.0," you don't need a business degree to see that many of their executives and financial backers are banking on an exit strategy that involves swooning into Google's embrace or that of some bigger, wealthier firm -- especially if the alternative is having to find a way to actually make money off, say, mobile blogging (Twitter), family tree building (Geni), or social networking (umm…take your pick).

That's why we here at InfoWorld have always felt that May is a good time to take a survey of the land and size up some of the new companies and technologies that are clashing horns in Silicon Valley, Route 128, Research Triangle Park, and elsewhere.

Last year, for example, Contributing Editor Galen Gruman brought you Tech Startups to Watch, which highlighted 15 technology startups with an interest in the enterprise. (Galen will be revisiting some of those companies later in the month). This year, InfoWorld is going one better and is designating May the Month of Enterprise Startups (MOES), in which our writers and editors will bring you a new enterprise startup each day for the month of May -- 31 in total.

Why enterprise startups, you ask? There are lots of reasons. For one thing, young companies that sell into the enterprise space tend to get lost in the media stampede toward trendy operations like Facebook and megadeals like Google's $1.65 billion offer for video sharing site YouTube in November 2006. That 10-figure deal symbolized much of what this next wave in technology was about: the Web, youth, media, and content sharing. But the froth over those deals obscures an equally important transformation that is happening in the enterprise, where Web- based applications and collaboration are transforming the way that work is done.

After all, the massive YouTube deal overshadows a host of smaller Google acquisitions with more enterprise flair -- CRM software maker NeoTonic in 2003, 2Web's Web-based spreadsheet in 2005, and Upstartle, makers of the Writely online word processing program.

Second, new companies are sprouting up across the technology sector and offer a lot more to businesses than just social networking and Web-based spreadsheets. From data integration to application development to clean technology, startups are blazing trails in areas that will shape the workplace in the years to come.

So which hot new companies will be swallowed up by the Googleplex in Mountain View? Not surprisingly, the folks at Google aren't talking. Google Enterprise spokesman Mike Nelson said the company doesn't like to even talk about startups because it "might lead people to read too much into our intents and direction."

But handicappers who want to bet on the next hot enterprise technology might look to what's happening in the consumer space for ideas, said David Smith, an analyst at Gartner who helped compile that company's list of Cool Vendors in Web 2.0 report. "What we're seeing on the Web is that most of the cool, innovative companies and technologies are coming in the consumer space," he said. "These are technologies that tend to come into enterprises later through consumerization."

Google's evolving Google Apps suite, which includes elements of Upstartle's Writely word processor and 2Web's spreadsheet technology and online calendaring, is a great example, he said. It's not like enterprises are making strategic decisions to migrate from Office to Google Apps, but those programs are beginning to augment legacy enterprise platforms like Microsoft Office.

Evidence of that shift has been popping up recently -- like the recent story about employees at consulting powerhouse McKinsey & Co. and JPMorgan Chase using public Google Calendars to schedule meetings. "Lots of users go around the systems that are in place," Smith said.

That story highlights one of the big themes with the latest wave of tech startups: collaboration tools that allow teams of workers to view and edit the same documents together.

Those kinds of features are still sorely lacking in many enterprises, especially when teams need to include members who are outside of a company, where domain restrictions, compliance worries, and IT security policies often curtail true collaboration. Web-based suites like Google Apps create a free and easy way for ersatz teams to collaborate, while platforms like Yahoo Mail and Gmail often provide more storage, better search capabilities, and easier access than can be found on enterprise desktops.

"Not a lot of organizations have rolled out those kinds of features, so individuals within enterprises are on their own to seek out Google Desktop Search or similar products from Microsoft and Yahoo," Smith notes.

But the disjunction between what's going on in the consumer space and in the enterprise may be short lived.

"A lot of these features have started to be delivered by larger companies," Smith notes, pointing to Microsoft's Sharepoint platform, IBM's Lotus, and products from BEA, SAP, and Oracle. "You're going to see a lot of enhancements come out."

In a short time, Smith and others agree, lightweight, Web- and standards-based tools as well as the growth of software-as-a-service applications could make traditionally thorny and expensive enterprise projects like knowledge management and collaboration affordable and ubiquitous -- a message you'll hear from more than one aspiring CEO during our Month of Enterprise Startups.

As for becoming the next YouTube? Smith said that megadeal probably isn't a good yardstick by which to measure the potential of the enterprise startup market. Google is more concerned about protecting its core markets in search and online advertising to wade too deep into the enterprise market, whereas giants like IBM, Oracle, and Microsoft have more diverse product offerings and are far better positioned to scoop up promising startups.

"Google's not a traditional software company, and I don't think they have aspirations to be that," he said.

Ah well. There's always next year.

Copyright © 2007 IDG Communications, Inc.