Did Oracle burst the enterprise 2.0 startup bubble?

Did Oracle burst the enterprise 2.0 startup bubble?

Summary: Is the bubble about to burst for the startups shouting "enterprise 2.0" from the rooftops?


Is the bubble about to burst for the startups shouting "enterprise 2.0" from the rooftops?

TechCrunch50 and DEMO and Office 2.0 were full of young, eager companies with fun and frilly applications touting themselves as the next enterprise 2.0 heroes. Some offered white label social network applications and others offered cloud-based solutions, the latter of which didn't especially offer any security or scalability that would appeal to many businesses beyond their kin -- tiny startups and independent consultants.

But now, with Oracle officially unveiling additional enterprise 2.0 applications and especially the buzz around Social CRM this week at its OpenWorld event, the goliath might be not only given these smaller companies a run for their money -- it might actually take their money.

Here's what Oracle has up its gargantuan sleeve:

  • Oracle WebCenter Suite -- an open user interaction and portal platform that integrates enterprise 2.0 capabilities into ad hoc and structured business processes, as well as custom and packaged enterprise applications
  • Oracle Beehive -- a new collaboration platform for integrated and secure collaboration (note: security being the most lacking feature of many enterprise 2.0 startups)
  • Oracle Social CRM Applications -- user-focused productivity applications that are fully integrated with OnDemand or on-premise CRM and other critical enterprise data, which helps sales professionals focus more on selling and less on data entry

While the applications are important (and it appears that further integration between each of these tools is needed), the biggest concern for the startups should be Oracle's resource engine. The company also announced that it has created a dedicated enterprise 2.0 sales force, has significantly invested in enterprise social networking events, is launching multiple education programs, has dedicated support and services engineers, and it is eating its own dogfood by implementing these tools cross-functionally within the Oracle organization.

These are areas in which many of the startups simply cannot compete. Don't get me wrong, there is always room for innovation. I myself work for a company that wins daily against the giants of the network security industry. I want the "little guy" to win. But is it probable?

So the question remains: Would a Fortune 500 company wanting to reap the benefits of social networking tools to boost their sales efforts and collaboration choose tried-and-true-yet-sometimes-controversial-and-costly Oracle or would it hedge its bets with a startup that offers in-the-cloud-and-potentially-insecure functionality? Especially since there's a good chance that Oracle could gobble up some of these startups, anyway (and I'm sure that's an exit plan for at least a few of them).

The answer is unclear, however considering how many Fortune 500 companies have been reluctant to use existing social networks due to lack of reliability, scalability and security with existing social networks, and that many are charged with developing their own solutions, we might see a heavy lean toward Oracle's enterprise 2.0 applications.

Topics: Oracle, Collaboration, Social Enterprise

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  • enterprise 2.0

    Great article, many enterprise companies want a web 2.0 resolution to help them increase all levels of communication. But will Oracle's solution supply all the tools and apps the companies want?
    • Therein...

      ...lies a good question. I suppose time will tell. Christopher Carfi wrote about how the apps need more, but they are definitely on the right track. I agree.
      Jennifer Leggio
      • RE: Did Oracle burst the enterprise 2.0 startup bubble?

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  • Start-ups offer things Oracle can't.

    I don't think that Oracle will crush the smaller start-ups because I see three problems with their offering...

    1st, Oracle's solutions tend to be extremely pricey. I've worked in Oracle shops before, and while their DB is quite powerful, you pay big dollars for that power. Its the same for their enterprise suites, and has only gotten worse now that they've bought and killed competing products (like Peoplesoft, etc).

    2nd their software is written in such a way that *you* must change your business process to follow it, rather than adapting it to follow your business processes. This one-size-fits-all approach simply doesn't work well for an established and efficient business. Such companies don't want to re-engineer their entire work flow just because Oracle's software can't adapt.

    3rd, Oracle is not the most customer friendly corporation I have ever worked with. Trying to get answers from them is like trying to get answers from a brick wall. Oh, they're very helpful during the sales process, but become unresponsive and rather autocratic once the contract has been signed.

    Start-ups, on the other hand, tend to provide stellar service ... even putting my call through to the developer who wrote the module in question and having hot-fixes developed and delivered before Oracle even returns my call.

    I think that it will be difficult for Oracle to overcome its own corporate culture sufficiently to compete with the nimble and more customer-friendly start-ups. Those it can't bulldoze with its sheer size, are going to build a profitable business irregardless of it's entry into the market.

    Just my $0.02 USD and your opinion may well vary.

    • Good points

      Jon, you make very good points about Oracle's software not being especially adaptable and the cost (which I did highlight as a concern). I agree with pretty much all of what you said, except take this into consideration. There are a ton of large and mid-size corporations that are Oracle shops. They have Oracle everything. Those are the companies that are most likely, from my perspective, to expand their Oracle footprint rather than taking a chance on a smaller startup. Startups absolutely can offer more in some regards, especially in terms of flexibility. And especially since social network on its own should adapt to ones business and not the other way around. But can they get in the door?
      Jennifer Leggio
    • Consider this ...

      "Oh, they're very helpful during the sales process, but become unresponsive and rather autocratic once the contract has been signed."

      While you are describing Oracle in this statement, the sad fact is that this description also fits many enterprise CUSTOMERS who use Oracle. I've worked with large corporations that tend to be *uncomfortable* with the flexibility and looseness offered by smaller startups. Also, there's the human trait of perceiving a higher price as an indicator of higher quality.

      And in the end, many startups fail because they don't know how to market and sell an otherwise excellent technical solution. This is especially deadly when selling into the enterprise. Whatever else you may think of Oracle, it knows how to sell.
      terry flores
  • The Lil Guys Serve the Lil Guys Best

    My impression is that the target market for the spate of web 2.0 collaboration solutions from the "big guys" - cisco, oracle, microsoft, google targets the "medium to big sized business" segment. there are some small companies like <A HREF="http://www.hyperoffice.com"> HyperOffice </A> offering collaboration which are firmly entrenched in the small to mid sized segment. small companies are typically more well equipped to serve the needs of growing organizations (in person support, a flexible solution which you can keep adding to etc).

    also, never underestimate the power of innovation on the net. google and youtube started small remember.
  • Crowd Factory - media/entertainment social media

    One thing Oracle will not do very well is enable consumer facing social media for media companies for example. At Crowd Factory (http://www.crowdfactory.com) we manage infrastructure supporting Martha Stewart, Comcast, Scholastic, HBO, Vh1 social media. The platform scales smoothly, offers security worthy of the enterprises, and is quite affordable. Have a look.
    Crowd Factory