October 9, 2006 4:00 AM PDT
'Office 2.0' start-ups knock on business doors
Several start-ups are developing online services that handle tasks people typically carry out with desktop applications like those in the popular productivity suite. And at the Office 2.0 Conference, set to start in San Francisco on Wednesday, many of those companies will show off their latest crop of products.
One company, SmartSheet.com, is launching an upgrade to its online collaboration software, which is built around a hosted spreadsheet and e-mail. Instead of just mimicking Excel in online form, the company is using familiar tools to make project management better, SmartSheet's president said.
"We're trying to create a combination between the paradigms we all know (with e-mail and spreadsheets) and, where we get the benefits of Web 2.0 collaboration and improved processes," said Mark Mader, president of SmartSheet, which is based in Microsoft's home turf of Seattle. "We're not falling into the camp of simply replicating what there is today online, which doesn't improve things all that much."
Workplace use of Web 2.0--the use of wikis, Internet delivery of applications, and Web-enabled collaboration--is the key way these upstarts hope to distinguish their products, as they try to chip away at Microsoft's franchise. Another benefit they tout is that using hosted services, rather than buying applications, can work out cheaper for customers--or at less expensive up front.
In perhaps as significant a differentiator, many Office 2.0-style companies are steering clear of the traditional sales route used by Microsoft Office. Instead of trying to sell directly to IT managers within corporations, many of these smaller companies, which admittedly have limited resources, are looking to spark grassroots adoption by pitching their products directly at the worker who will be using them.
In a model shown to be successful by Salesforce.com, many hosted productivity applications aimed at businesses are cheap enough to be purchased using a credit card by individuals within a company department.
Paul McNamara, CEO of online services start-up Coghead, says that it's not just the viral marketing aspect of the backdoor sales approach that appeals to him. One of the ideas behind Coghead's approach is to let technically savvy end-users gain more control.
"There is a real groundswell for do-it-yourself Web applications, empowering people closest to the business problem to build the solutions," he said. "A lot of people see the Web delivery model and Web 2.0 as a key enabler to end users."
On Wednesday, Coghead plans to launch an open beta, or test version, of its service, which lets technically savvy people build their own workflow applications. It intends to launch its service in the first quarter of next year and to charge a monthly subscription fee.
Service providers as power brokers
SmartSheet's Mader previously worked at Onyx Software, a provider of customer-relationship management applications, where he saw firsthand how individual business users can have an impact on corporate decisions.
In one situation, Onyx was ready to close a large deal endorsed by the customer's IT department. But that decision was derailed at the last moment by people who were going to use the application.
"Teams will make decisions--if they see value, they will move. We had a wonderful plan, and business (people) overrode it, because they were bringing in the business," Mader said.
SmartSheet charges a monthly per-user fee, with a basic service starting at five users and 50 viewers. The viewers can see common documents and update them, but not author new documents.
Being quick and easy-to-use encourages people to try a new Web application. At the same time, however, it makes it relatively simple for them to try an alternative.
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