So what keeps organizations up at night, in light of all these changes? According to 2010 Forrester research, data leakage and ensuring regulatory compliance in using these platforms are among the top concerns of organizations.

Data leakage is the biggest concern, with 82% of large organizations reporting themselves as “very concerned” or “concerned.” In the transparent social web, organizations – especially those with more than 5,000 employees, which is where this research is focused – have cause for concern. Regulatory compliance is another big concern – 66% of those surveyed said they were concerned or very concerned about maintaining compliance while enabling these social sites.

To address these fears, many large organizations restrict access to these and other “non-essential” programs, with almost 60% of enterprises reporting such restrictions. However, as we’ve talked about in the past, prohibition is not the answer.

Smarter companies are creating guidelines and implementing finer-grained controls on a feature-by-feature basis. This gives employees the opportunity to use key social networking capabilities while still giving the enterprise a degree of control. Up to 86% of enterprises have or plan to have such access in place which would allow advisors to, for example, establish a Twitter account or leverage LinkedIn to the fullest, all in a compliant fashion.

This aligns with our philosophy of enabling users to make the most of social networks for business, rather than blocking them. Innovative organizations seek to understand how social networks are used or can be used to build personal and professional networks, then analyze potential risks. The next step? Develop a policy that works by addressing regulatory issues, educating users on the policies, then enable them to use the social networks in appropriate ways. Over time, firms will review actual usage and results, policies will be updated and new ways to make the most of these networks will be discovered.

In short, while enterprises – including financial institutions – have cause for concern, ignoring the power of social networks isn’t the answer. There are many ways social networks will impact business – including creating new referral sources, helping advisors keep in touch with customers and recruiting new talent.

The companies that “get to yes” first will create a competitive advantage, establish themselves as innovators in the industry and enjoy the financial rewards this new communication channel has to offer.

We’ve already shared some stats around companies that choose to  block access to these sites. For example, Robert Half Technology found that 54% of CIOs said their firms do not allow employees to visit social networking sites for any reason while at work.

The naysayers will point out that giving employees access will hurt productivity,  expose sensitive information,  hurt the brand’s reputation or  cause compliance issues. The reality is that these are all just excuses. There are always risks with any decision and in this case businesses have to make their own assessment and then take steps to mitigate that risk.

My request is that you keep an open mind before jumping to a conclusion. To help you along let’s review reasons you WOULD want to open access to social networking sites:

1. They offer a great channel to recruit new talent
2. It is a unique way to build your brand in the eyes of customers and prospects
3. Go where customers are – let them communicate with you on their terms
4. Drive new sales and upgrades
5. Find new prospects
6. Drive traffic to your site
7. Reduce your customer service costs
8. Improve productivity (yes you read this right – look for proof below)
9. Collaborate with partners, customers and employees
10. Increase your reach by tapping the collective networks of your employees. In other words grow your enterprise social graph

But don’t take my word for it. Let’s look at some other research that points to the benefits of opening access.

• According to Dr Brent Coker from the Department of Management and Marketing at University of Melbourne in Australia, workers who engage in “Workplace Internet Leisure Browsing” are 9% more productive than those who don’t.
• An Accenture survey of Millennial preferences found that they prefer to communicate via instant messaging, text messaging, Facebook and RSS feeds. One Millennial MBA, points out that, “I need to access my Facebook in order to do my job.”
• The Cerner Corporation has found tremendous benefits from opening access to social networks. Here is how one Cerner associate puts it “Cerner supports the notion that “work time” and “personal time” have blurred in the uber-connected world. We used Twitter to gather real-time feedback during our corporate town hall in October. It was amazing to see a meeting of 5,000 associates be steered by the crowd, channeled via social media.”

Is there a social media silver bullet? No. But are you missing out on a great opportunity if you don’t engage and don’t enable your employees? Absolutely.

I won’t analyze every prediction but rather focus on the ones that really caught my eye and will probably surprise most of our readers.

Prediction #1
“By 2014, social networking services will replace e-mail as the primary vehicle for interpersonal communications for 20 percent of business users.”

Today MySpace is the 4^th largest email provider beating out both Yahoo and Gmail. And Facebook recently announced a full-fledged email service, which will instantly make it the largest email provider in the world once launched.

“The rigid distinction between e-mail and social networks will erode. E-mail will take on many social attributes, such as contact brokering while social networks will develop richer e-mail capabilities,” said Matt Cain, research vice president at Gartner

My complaint with all the great social tools at my disposal is that they all live on different sites. Will there ever be one site to rule them all? I doubt it. But some are going to get very close. Facebook is going to have all of my friends, my live feeds, my photos, my chat client and soon email.

What will all this mean for your business? If you haven’t embraced social networking you need to start immediately. Otherwise you risk missing out on future sales, productivity improvements and valuable connections that can help drive your business forward.

Prediction #2
“By 2012, over 50 percent of enterprises will use activity streams that include microblogging, but stand-alone enterprise microblogging will have less than 5 percent penetration.”

The growth of Twitter has caused many vendors and enterprises to take notice. As more and more people consume information in 140 character bytes there is a natural desire to bring this capability in house. However, the idea that “Twitter-like” functionality will see the same success is a little mis-guided. A key part of Twitter’s success is the size of their network. With a small, enterprise focused network and the fact that the service will be purely business focused it will be challenging to get employees to adopt the replica vs. just using what they know and love, Twitter.

Prediction #3
“Through 2012, over 70 percent of IT-dominated social media initiatives will fail.”

Just as social software is causing the enterprise to reinvent how they work it is also disrupting the way IT departments operate. Business users are testing, using and adopting solutions with or without the help of IT.  The most successful IT groups will be those that partner with the business to better understand their needs and find ways to deliver solutions on their timelines. With so much of today’s software just a few mouse clicks away, all hosted in the cloud and managed off site there is almost no barrier to the business making their own decisions on what is best for them and their business process.

What do you think? Are you surprised by these predictions?

“75% of companies did not have policies for employee use of social media in place and are opting to “wait and see”.”
Come on folks it’s time to get in the game. Social media is here to stay and if you haven’t started thinking through the strategies of how it can impact your business you are going to be left behind. Earlier this week one of the world’s most successful, AND most conservative, companies sent representative to Socialware and over 50 different companies to better understand strategies around social networking and to bring back ideas to the CEO and the rest of senior management on how to adopt these tools for their company. If they can do it, you definitely can.

“19% of Asia-Pacific employers claimed social networking was a good method for promoting collaboration and communication”
Now we are talking. Collaboration and communication is just one way companies can benefit from the use of social networking sites. You could dedicate an entire blog to this topic. In fact, there are over 42 million results on Google around the topic.

“31% of Australian employers cite social networking as helpful in building their brand.”
Quick, you need to reach 400 million people, what do you do? Superbowl ad maybe? Only if you can afford those cute talking babies from E-Trade. If not you better start looking at social media. Facebook grew by 50 million users in the last 5 months to reach a grand total of 400 million. Throw in Twitter and LinkedIn and that’s another 100 million at least. The point is there is no better way to start a conversation with the people that will care about your brand than on these sites. Find the way that works for you and then go say hello.

“Do not block them. If you’re blocking them, then your younger employees, especially those of Gen Y age, are going to either disengage and fold their arms or just get out their iPhones and BlackBerries and access them on there.”
We’ve all been here before. What happens when you forbid somebody to do something? They want to do it even more. Now with that said I’m not suggesting you open the floodgates. There are very good business reasons why you might not want employees viewing Facebook videos or photos at work. All of that activity can clog the network and rob core business applications from the bandwidth they need. So here is an alternative. Define your social media policy, turn on access, lock down parts of these sites that are off limits and then explain to your employees why. Now you’ve given them access to parts of the site that are the most valuable to your business and you’re protecting the company at the same time.

“Ultimately, businesses have an opportunity to use social media in a way that helps employees feel truly connected to the business.”
This is a good way to sum it up. Social media is here to stay. It is having a measurable impact on businesses. You can manage it on your terms. And it will increase, not decrease productivity (I have a blog post coming on that topic next).

Tweet me when you get started.

Cisco

Here are a few of the study highlights.

The first set of findings point to the increased use and integration of consumer-based social networking tools in the enterprise.

“75 percent identified social networks as the consumer-based social media tools they primarily use, while roughly 50 percent of the group also identified extensive use of microblogging.”

This part is old news. Organizations are racing to adopt social networking and microblogging tools to help drive the business and it seems there is a new article about it every day.

“Social networking tools are spreading into core areas of the value chain, including the marketing and communications, human relations, and customer service departments.”

Organizations are now moving beyond social networking silos. They’ve already proven there is value in tapping these tools as stand alone solutions and now they are looking for ways to integrate social into their enterprise processes and systems.  This is the next big wave.

While usage and integration is skyrocketing, companies have been lax in regards to governance and involving IT in their decisions.  Ultimately, this creates a great deal of risk and exposure.

“Only 1 in 7 companies noted a formal process associated with adopting consumer-based social networking tools for business purposes, indicating that the potential risks associated with these tools in the enterprise are either overlooked or not well understood.”

This is likely a result of the unbridled growth of these tools and all the buzz associated with them.  But like any good business decision, companies need to step back, understand what they are trying to achieve, evaluate the risks and put the tools in place to manage the program. I will say that the companies we’ve been working with in regulated industries are taking a very programmatic approach to adopting social.  While other industries may not face the same challenges they can learn a lot from these institutions.

“Only 1 in 5 participants identified any policies in place concerning the use of consumer-based social networking technologies in the enterprise.”

This point has come up before.  If you fall in this camp be sure to check out this list of sample social media policies.  As of today there are over 115 examples.  In addition, here is a great list of government related social media policies.

Be careful in thinking that a policy alone is all you need.  Deloitte found in an Ethics & Workplace Survey that 49% of employees say a company policy won’t change how they behave online. As a result you should evaluate tools to help you monitor activity to protect your employees and your brand.

“Due to the unstructured nature of social networking, companies continue to struggle with policy creation and adoption, as copying an established governance process from other, more structured areas (for example, information technology) often doesn’t work for social networking.”

Until recently companies have had two choices when it comes to social networking sites. Open the floodgates or completely block access. Since these are consumers sites there are no built in management controls for the enterprise. This is one reason why social middleware has become such a hot topic.  With it companies can apply structure, define policies, control access and protect their brand on these open, consumer sites.

“Businesses also find difficulty in striking the right balance between the social and personal nature of these tools while maintaining some degree of corporate oversight.”

We hear this a lot from our clients as well.  On Twitter users can easily create multiple personas.  However, on Facebook and LinkedIn you are only allowed a single account under their terms of use.  As a result there is no way to separate your personal activity from the professional on these sites.

Again the need for social middleware becomes clear.  Adopting this middle layer creates the ability for employees to choose whether or not content is personal vs. professional.  As a result companies can implement policies that give employees the ability to choose what category the content falls under and as a result how that content will be monitored, retained and managed by the enterprise.

“Only 1 in 10 respondents noted direct IT involvement in externally facing social networking initiatives. Although the IT department is typically not involved as a primary decision maker, respondents did recognize the need for these tools to scale and properly integrate with existing business processes to reap maximum benefits.”

There are two items of note here. First for companies to realize the full benefits of these tools they will need direct integration to their people, processes and systems. Building loose connections in a one-off manner to each of these sites it not the answer.  IT will want a single point of integration to marry enterprise processes with the top sites of today and those that will be the next Facebook tomorrow.

The second reason it is critical to involve IT is that these sites have a very real impact on the infrastructure of the enterprise. A report from Blue Coat noted “a company based in the US was having problems connecting with its South Africa office” due to the fact that “the bandwidth on its WAN link was completely consumed and it found that 75% of that traffic was Facebook.”

Of course blocking access is not the answer. In that same report they highlighted a customer that “blocked Facebook and within 48 hours they had to unblock it.  Marketing and HR had complained that it was critical to them getting the job done.”

There has to be a happy medium.  Companies will be forced to open up access to these tools but at the same time they need to manage that access.  One solution to the bandwidth problem is to govern access to those parts of the site that consume the most, like videos and photos.  This way you meet the needs of the business by giving access while not crippling the rest of the network.

In addition to the analysis in the report there are some great perspectives by industry leaders on why adopting these social tools will ultimately be a driver of success and competitive advantage.

“Companies who will succeed in embracing the tremendous power of social networking will be those who design a collaborative IT architecture capable of supporting the use of these technologies and mitigating the risks they pose.”
Nick Earle, senior vice president, Cisco Services

“Businesses need to embrace social media not only to remain competitive, but also to continue to attract top talent. The next generation of leaders will be exceptionally savvy with these tools, so 3M is using social media externally to help us with recruiting. Several of the graduates we hired this year specifically told us that they hadn’t considered 3M before they saw our employer profile on social media.”
Hugh Murphy, e-Channels, 3M U.K. and Ireland

Thanks Cisco for a great report on a hot topic. I’m looking forward to part 2.

So what does that mean…what does it look like…how do you support it and what can we learn from great cultures that we are all familiar with like Google and more local to Austin, Bazaarvoice.

For Socialware it all starts with the team. We are looking for and hiring the top talent across every group. Our goal is to build a company that people are passionate about.  And also to create an environment that is fun, fosters teamwork and is ultimately a place that people are excited to come into each and every day.

To help along these lines we’ve taken a few steps:

Couches, Yes. Desks, No.
Reception desks are so yesteryear.  Every great Web 2.0 company that we have visited has a comfortable lounging, socializing, gaming area at the front of their office…we are no exception.  Nothing brings a company together better than literally sitting around and ideating or just hanging out and gaming together.

Kindle anyone
Taking a page from great companies such as Zappos, we wanted to encourage our team members to read and absorb the things that we believe.  We took the approach of loading up Kindles for folks to grab and read at any time.

DJ booth
Why a DJ booth…first of all it’s cool.  More importantly, we wanted a novel way to rally the team and in our case each event is associated with a song snippit and the team members that drove it get to “mix it up” to announce it.  BTW, I’m pretty sure we beat Twitter to the punch with this one.

Whiteboards everywhere
For ideas to flow and transparency to happen we decided that painting our walls with anything short of whiteboard paint would not suffice. As we say around the office “if it is white you can write”.  Thanks Ideapaint!

“The Best Around” award
In any culture it is key to single out individual accomplishment. Our version is “The Best Around” award aptly titled for this classic number from a Karate Kid movie whose sound track was indelibly logged in our CTO’s mind

Maybe most importantly we are all about drinking our own Kool-Aid or eating our own dog food whichever saying you prefer.  As the Social Middleware company we are fully leveraging our own solutions.

For instance, our Social Stream is driven by our Social Marketer product allowing our employees to separate their personal social networking posts from their professional ones and to promote our company and products using their existing social profiles.

We are just getting started and realize it isn’t the destination but the journey.  So far that journey has been a blast and we will continue to work to make Socialware a place that everyone loves to work.

By the way, if you have an interest in working in this kind of environment let us know.  We have immediate openings which you will find at our jobs page.

The article gives an overview of the company, the problems we are solving in the social space, background on our funding and a perspective from the industry.  On that front here are a few of my favorite quotes:

“Matthew Lees, vice president of the Patricia Seybold Group, a Boston-based research firm, said the social middleware business is still in its infancy as businesses figure out the role of the social Web.”

“Everybody is thinking about how they can use it effectively and prevent what they don’t want to happen from happening,” he said. “What’s definitely here to stay is the tension between what’s appropriate and what’s not appropriate. That’s still being hammered out.”

Michael Coté, an Austin-based analyst for RedMonk said “There’s a need for companies to be more involved with social networking, I think it’s an extremely manageable risk.”

We couldn’t agree more on both fronts! Thanks again for a great piece ABJ.

The sharing of ideas and innovation has long been deeply tied to social settings like Starbucks, a pub or your favorite restaurant.  It seems that entrepreneurs seek each other out to share ideas and test concepts.  The picture above was taken at a local Austin restaurant called Guero’s.  Not only did this table produce a hefty bill from all the margarita’s and Corona’s, it also produced several very successful companies that have reshaped how we communicate.   The founders of Twitter, Adaptive Path, Gawker, MetaFilter, Flickr, Six Apart, Get Satisfaction, Typekit, Jenville, Measuremap, Mighty Girl and Blogger were all here to collaborate, innovate and have a little fun in the process.

As part of the next startup generation I wonder what our table will look like?  Is collaboration evolving beyond dialog over an enchilada plate at Guero’s?  I don’t know if social networking will take the place of a coffee shop or local pub, but the reality is that the ability to share thoughts and collaborate has expanded well beyond the restrictions of geography.  People will still meet and innovators will still be drawn to each other, but the genesis of those meetings may very well start on social networks.

Another question. Can we consider collaboration on these platforms a necessity for innovation and growth?  Think about the possibilities of adding 30 writers to the conversations and dialogs had by CS Lewis and J.R.R Tolkien at the Eagle and Child pub in Oxford. Now think about this concept in a corporate setting and ask yourself, are large companies stifling creativity by blocking access to these sites?

Many of the clients that I speak to on a daily business are committed to the marketing and customer support aspect of social networks, but is that enough?  The most successful companies today are the ones that continue to innovate – the rest wither and die on the vine. As we enter a paradigm shift in communication it is my belief that companies that are not encouraging the full use of social networking platforms are fostering a corporate culture of complacency.  Early adoption of this new strategy will prove out the winners and the losers in this next decade.  Don’t believe me? Just look at the study by the Altimeter group. They found that those brands deeply engaged in social had an “18% increase in revenues over the last 12 months, compared to the least engaged companies who on average saw a decline of 6% in revenue during the same period.”

The new voice of innovation and creativity will be louder and louder on this platform and for enterprises to compete they will need to hire and train a collaborative workforce.  The corporate culture of segmented departments and the separation of thought leaders into distributed think tanks will become a liability. Collaboration within the enterprise needs to transform as well.  The answer?  Start leveraging these social networking platforms for internal and external collaboration. Go out and participate in the discussion and encourage your employees to do the same.  And don’t forget the most important part of engaging in social media is to listen. Listen to your customers, your promoters, your detractors, your competitors and your employees.

The long and winding road to arriving at what we consider to be the perfect description of the void in the technology and market landscape that we fill with our technology is an interesting one and it is worth sharing details of why we chose this label and why it is so important.  Category naming and claiming is a big deal…we don’t take it lightly. Hopefully the following will share some insight into why we thought that it was so important for Socialware.

As a recent ReadWriteWeb article so eloquently put it, “Socialware talks in a language that IT can understand”.  Thank you for that great line Alex.  In a week full of Socialware visibility, this was one of, if not, our very favorite line because it so neatly represents the genesis of Socialware.

We are asked a lot about why Cameron and I were inspired to create the company in May of 2008 and why we were able to come up with this novel, albeit logical approach to filling such an important gap in the market.  The response is always that it was a direct result of the unique background and experience that we had had in two worlds, the world of enterprise software which we spent the better part of 10 years in, and the world of web 2.0 which Cameron and I had both been fully immersed in for the past 4 years.

For us the idea that enterprises would want to embrace the public infrastructure of social technologies, which are free to use, innovate faster than enterprise software, and that employees are clamoring to use, was the obvious next step towards the consumerization of IT.

But based on our experience we were also keenly aware of the challenges of identity management, policy management, business process management, legacy integration and more.  How would we go about “enterprise enabling” the consumer social web?  The answer was of course to extend the old familiar notion of the glue layer, the traditional middleware that is used intra-enterprise to tie together legacy systems.  So in Alex’s words, the repurposing of the term middleware and applying it to social provides comfort to IT teams in a world where they are confronting a whole new array of technologies with a unique and daunting set of challenges.

Conveniently enough the use of the term middleware in general has fallen out of popularity since the consolidation of that market occurred.  There was no one actively staking claim to that term and in the new world of the “Hyperextended” enterprise, it was clear that middleware had to take on a new dimension. It had to reach beyond the four walls of the enterprise and encompass the open social web.

Another great part of the Social Middleware convention is that is says – security, control and enablement – all at once.  Early on in Socialware’s life we really struggled with the question of: are we about control or are we about enablement? We knew the answer was both but that was always hard to get across to the market.  We have always known that while the present environment is about control, i.e. access control, governance, compliance and more, the future is really to achieve true collaboration across consumer social networks.  Nothing encapsulates this better than the term Social Middleware.

Finally, Social Middleware is a bit of a shout out to the legacy of our hometown, Austin, TX.  In the technology world, Austin has been perceived traditionally as an enterprise software town having been the home of enterprise software juggernauts like Vignette, Tivoli, a large IBM office and more recently companies such as Webify Solutions and Solarwinds.  Austin is making a concerted effort as a tech community to form a new identity in the web 2.0 world.

Local high profile startups such as Bazaarvoice have helped to further that cause.  Given this history and the knowledge base of both experiences, enterprise software minds combined with fresh blood and thinking on the web 2.0 front, I can’t think of a better location to build a Social Middleware company. We are all excited when we think about the impact that Socialware as a company might have on the local Austin technology scene which we have all been a part of for many years.

So how has the term been accepted so far?  Use of the term web wide within 24 hours of our launch date (Dec. 9^th) went from next to nothing to over 19,000 references.  To me that sounds like acceptance of a new category in a day.

We look forward to connecting with you and sharing more details about Social Middleware and what it means for your business.