Enterprise to Social and Back Again?


So, I’m hearing that venture capital is investing in enterprise software again, and social has lost it’s luster?  Really?  Then explain to me Amazon.com’s (AMZN) acquisition of GoodReads (www.goodreads.com) for $200 million, or approximately $10 per user.  And what about Yahoo’s (YHOO) acquisition of Summly for $30m.   OK, Summly is mobile, not social, but it’s definitely not enterprise.

And what is enterprise?  Salesforce (CRM), SAP, Oracle (ORCL), EMC (EMC), IBM (IBM)?  A SAAS, ERP, manufacturing or database application?  Enterprise can be an application, security, or sales oriented.  Most of all, it’s presumed to be used by a large corporation or  organization, and large ticket—as in hundreds of thousands to millions of dollars per installation.

If one looks at the IPO market, it’s an enterprise game.  If one looks at the M&A market, it’s a social game.  This year the IPO’s have been Workday (WDAY), Trulio (TRLA), Kayak (KYAK) and Palo Alto Networks (PANW).  While these companies may not be enterprise software, they are all very tactical and used by individuals and large enterprises.  There is nothing social about them.

Social companies are being acquired.  The social companies, tend to be point products that assist an organization in building communities.  And communities are what deliver stickiness, brand loyalty and personality to a brand.  Last year, Oracle acquired Vitrue, Collective Intellect and Involver; Salesforce acquired Buddy Media.  Microsoft acquired Yammer.

This begets the next wave, which is social being integrated across all types of functions and applications.  Data, analytics and ROI will continue to be attractive.

My burning question is:  Where will Hubspot end up?  Who will be the acquirer and when?  Along with other companies of its ilk.

What social application is compelling in your company?  What has the potential to generate the greatest ROI?

*Source FLICKR Laserficherio