Strategy to keep cloud's simplicity while letting wary companies retain some control made Socialcast a no-brainer acquisition for VMware.
Enterprise Social Networks: A Guided Tour
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For enterprise social networking, you can have on premises, you can have the cloud, or you can have a choice.
Socialcast might be the enterprise social networking player that has done the best job of balancing the convenience of the cloud with the demands of large enterprises that tend to demand more control. That enterprise appeal helped lead to Socialcast's acquisition by VMware in May. Last week, I visited with Socialcast, which is now the flagship of a social software division of VMware, at its offices in San Francisco. This was a few days after my visit with Yammer CEO David Sacks, so one natural topic of conversation was the difference between Socialcast's approach and Yammer's singular focus on the cloud, or the strategies of other contenders such as Jive Software.
Socialcast founder Tim Young, who was CEO before he became head of the VMware social software group that also includes products such as Sliderocket, said he believes his company has an edge over competitors like Jive because its products were architected from the beginning for a multi-tenant cloud architecture. However, Socialcast also decided to not be as much of a purist as Yammer, which does not support any deployment model other than software as a service from a remote data center.
It's that flexibility that has won Socialcast customers such as SAS Institute, Nokia, Humana, and Philips Electronics, he said.
"Early on, we chose to focus on large enterprises as our customer base, where the requirements are pretty divergent from what they are for sub-500 person companies. We felt that in order to prove a lot of the network effect concepts we had in mind, we needed to work with large enterprises and see how they behaved," Young said.
"We stumbled across some on-premises opportunities early on," Young continued. "These were organizations that were very IP [intellectual property] sensitive and wanted more control. As an on-premises option, we came up with the idea of a virtual appliance, which led us to VMware's doorstep."
As a technology partner, VMware offered Socialcast a way of preserving some of the simplicity of the cloud-computing model without having to walk away from those customers who insisted any corporate collaboration application would have to run behind the firewall. In the private-cloud model, an instance of the Socialcast application runs on a virtual appliance--not actually a piece of hardware, but a complete application instance that runs in the VMware virtualization environment. This spares Socialcast the burden of having to support a myriad of server configurations, while still keeping the data and the decision of when to upgrade to a new release in the hands of corporate IT.
The virtual appliance approach isn't entirely unique to Socialcast. Socialtext, another contender in enterprise social networking, offers something similar in addition to a cloud option and a physical appliance, too. However, Socialtext has chosen to focus more on small- to mid-size customers, whereas Socialcast's enterprise ambitions and virtualization-friendly approach made it a natural acquisition target for VMware.
One of the advantages of cloud computing is that it allows the vendor to focus on supporting a single version of the software. Yammer's Sacks says that allows him to keep costs down and pass those savings on to his customers. That's in contrast with the deployment model of Jive, where even many of its application hosting customers are continuing to run a 4.x version of the software, half a year after the release of Jive 5. Jive is working on something called Project Thunder (disclosed in a February earnings call), which it says will allow it to operate more in the style of software-as-a-service companies that offer automated self-provisioning of accounts. The exact parameters of this program are unclear, and a Jive spokesperson said this week that the company is not ready to offer further details.
Socialcast falls somewhere in the middle of this spectrum, because the on-premises customers typically get updates to the software about a month after cloud-hosted customers, and they then have discretion over when to apply those updates. The majority do so as soon as they are available, "in part, because we make it so easy for them," Young said.
To deploy a new release, an IT team can "spin up" new virtual machine instances running the new software while the current release continues to operate. Once the new instances have gone through a self-check for integrity, they can be switched on, and the old ones switched off, without any interruption to operations--although conservative organizations might choose to make the change off-hours anyway. "We've tried to make it a pretty efficient process for IT," Young said.
The organizations that don't upgrade immediately might wait an extra month or two, but not much more than that, Young said. They don't tend to lag too much because Socialcast makes changes as incremental improvements, rather than abrupt upgrades, he said. "There's no real shock to the system, where you're going to wake up one day, and it's going to be totally different."
Customers with on-premises deployments also get test accounts in the cloud as part of the package, allowing them to experiment with a new release before they deploy it to their users, Young said.
Like Yammer, Socialcast offers a basic version of the product on a freemium basis, meaning you can use it indefinitely for no charge. However, one distinction is that Socialcast offers free administration tools, whereas Yammer requires companies to establish a paid account before appointing an administrator. The freemium version even includes a "light version" of Active Directory integration, Young said. That is important to organizations that want to keep their social networking application in sync with their enterprise directory.
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