Intel: Wooing Business Via the Web
Tech and media titans of every stripe are staking out territory in the new, interactive Web. Intel Capital (INTC), the investment arm of the world's biggest computer chipmaker, wants to leave its mark through a deal with several startups to build a package of publishing, posting, and interactive newsgathering programs for businesses. The product, called SuiteTwo, will be available early 2007 and will sell for $175 to $200 per user, per year.
The three-day Web 2.0 summit, a conference dedicated to all things new Web, served as a fitting backdrop for Intel's announcement. For the past three years, the event has gathered representatives from new high-tech companies to discuss emerging Internet applications and the burning question of whether they can make money. Until now, the business model for many new Web companies has been to draw big online audiences with free, or inexpensive, products and then rely on advertising for the bulk of revenue. Intel's announcement offered another, more traditional, model: charge businesses software subscription fees.
Notching Up From E-mail
Intel Capital united five companies behind the idea of a business software suite. Each was chosen because its software included capabilities that could enhance businesses' own internal networks and external systems, says Rob Rueckert, an investment manager with Intel Capital.
Partners SimpleFeed and NewsGator, for example, both provide up-to-the moment news and product information via Real Simple Syndication (RSS) feeds. Such constantly updated feeds could be used by companies that want to keep tabs on news or product information relevant to their industry. Six Apart, a blogging software and service provider, was chosen because companies can use blogs to easily publish information internally and share news with customers. Socialtext was selected to provide businesses with publishing platforms, known as wikis, that groups of employees can contribute to and edit. SpikeSource will oversee the integration of the various companies' software and handle customer support.
Rueckert is confident that the integrated platform will prove appealing for many businesses that want to foster communication between employees and improve the flow of ideas (see BusinessWeek.com, 6/5/06, "Web 2.0 Has Corporate America Spinning").
More than one-third of businesses already use some form of the interactive or user-generated technologies, such as blogging, that get grouped under the Web 2.0 heading, according to Intel's internal studies. Even companies that aren't embracing Web 2.0 are nevertheless using what Rueckert calls precursors—such tools as group e-mails and newsletters. "Most of what is being done by blogging and wikis is really just being done by e-mail now," says Rueckert. "This gives you a central, searchable repository for information…. These tools really do help lower costs and increase collaboration."
Intel is no stranger to new Web technologies (see BusinessWeek.com, 3/08/04 "Intel's Twist on Venture Capital"). This year alone, Intel Capital has invested millions of dollars to support new companies with the potential to drive Internet growth and the demand for more computing power, thus increasing the desire for better processors. "You know you are onto something good when you get the mysterious call from Intel saying they want to talk," says Mark Carlson, president and CEO of SimpleFeed.
That something good may well be a viable business plan. Since taking off in late 2004, SimpleFeed has developed and sold the ability to have information, such as corporate events, sent through RSS feeds and then to track the number of people who pay attention to the feed.
It also can monitor the sales resulting from, say, a person receiving a feed about an upcoming sale at Sears (SHLD), one of SimpleFeed's clients.
Similarly, NewsGator has 50 business clients and 500,000 users of its product, which sends news and information feeds to employees. The technology, which NewsGator initially developed to help average consumers keep track of the news they cared about, turned out to be particularly relevant for employees who need to keep track of information on an industry, competitor, or particular stock, says NewsGator President and CEO J.B. Holston. "What we found was that, for the most part, people who were buying these products were paying for them with corporate credit cards," says Holston. "Most people were knowledge workers who were using this to track content that is relevant to their work."
Six Apart was already licensing custom enterprise versions of its Movable Type blogging platform. The company counts General Motors (GM) and Wal-Mart Stores (WMT) as clients (see BusinessWeek.com, 9/25/06, "Six Apart's Booming Blogosphere"). With a blog, explains Six Apart's chief evangelist Anil Dash, companies can quickly get information out to both employees and customers, as well as receive instant feedback that is easily viewable by large groups. Blogs can also easily be searched, archived, and—through RSS feeds—sent to large groups. "E-mail is less searchable," says Dash. "With a blog, information is still there and people can see what the conversations were that lead to a decision."
Social Networking As Business
Like blogging, wikis also let people easily share information both externally and internally. One of the most famous iterations of wiki usage is Wikipedia, the free, collaborative, online encyclopedia that is counted among the top 15 sites on the Web. Socialtext has 100,000 users of its wiki service, which starts at $95 a month for small firms and lets businesses develop internal Web pages to which that employees can contribute information and comment. It counts Nokia (NOK) and Symantec (SYMC) as customers, says Kris Duggan, Socialtext's vice-president for sales.
Another new Web technology popular among businesses is social networking. It's perhaps most buzzed about for its ability to attract hordes of Internet surfers to a place where advertisers can find and pitch products to them, but businesses are using them to recruit potential employees and foster business connections (see BusinessWeek.com, 9/11/06, "Social Networks: Execs Use Them, Too"). LinkedIn, a social network for business, has 7.9 million users with profiles that include mini résumés and former employers. It also has more than 300 companies that pay for licenses to search its database for connections or future hires. That number has grown from just 50 last year. "There is a transformation in business adoption of new technologies," says Keith Rabois, LinkedIn vice-president for business and corporate development.
Corporate America isn't just embracing the new Web, but also shaping it. "They said Web 1.0 was about content. Web 2.0 was about conversation and how do you foster conversation," says Duggan. "And Enterprise 2.0 is how do you get those same technologies inside a company so we can break down walls and communicate better and foster more trust and productivity."