Do it yourself (DIY) in the enterprise (continued)

Last year I wrote about the newfound productivity of the prosumer, the consumer who is bringing technologies into the workplace in a DIY (do it yourself) fashion.  If IT can’t or won’t get something done, users can simply check the Internet for the latest web-based service or software download to help them solve their problem.  In this month’s CIO Magazine which landed on my desk somehow, the cover article is titled "Users Who Know Too Much and the CIOs Who Fear Them."  The subtitle is "They’re smart, productive and using IT you didn’t provide.  How to manage the modern user."  I think we are at the very beginning stages now of IT’s recognition that the world is changing and like Jeff Nolan says the balance on the continuum of systems and people should move more towards a people-centric vision of technology.  What do the people want and how do we provide them the ability to get things done while at the same time balancing our need to keep a safe and secure environment?  Sometimes these issues are directly competing with one another.  It is still quite early in the CIO’s recognition of a user-centric IT world but the fact that CIO magazine is focusing on this means that it is becoming more critical to its readers.

Over the next couple of years, it will be interesting to watch how the battle between top-down, conservative IT and bottom-up DIY employees gets resolved.  IT wants control, security, and compliance while users just want to get things done.  As the article advocates, the smart CIOs will figure out how to balance the needs of their users and the role of IT.

This will require CIOs to reexamine the way they relate to users and to come to terms with the fact that their IT department will no longer be the exclusive provider of technology within an organization.  This, says Smith (Gartner analyst) is the only way to stay relevant and responsive.  CIOs who ignore the benefits of consumer IT, who wage war against the shadow IT department, will be viewed as obstructionist, not to mention out of touch.  And once that happens, they will be ignored and any semblance of control will fly out the window.

Whether or not CIOs get it, does not really concern me as the nature of sales for many of these DIY apps and services should be focused around the end user vs. centralized IT.  Given this, the sale should be much different, less costly, and with much less friction.  If a user wants to track his sales force productivity, they can go online and sign up for Salesforce.com or create their own through a SugarCRM download.  There is no on-site installation as the web helps deliver the product efficiently.  From a sales perspective, as these companies grow over time, much of their sales can be done over the telephone or through a WebX or GoToMeeting session with only the large accounts reserved for an expensive direct sales rep.  Given this bottom-up, web-based model of selling and delivering software, it will be interesting to see how the incumbent vendors respond.  For example will users adopt a collaboarion platform from IBM that IT has pushed down on them or would it be better for CIOs to figure out what their workers are using and standardize on that?  Does this mean that the smarter incumbent software vendors look to buy startups that already have bottom-up traction versus building their technology from scratch?  As I was writing this post, I just noticed that IBM just signed a deal to pipe Google gadgets through its Websphere portal. 

"These sites are not just valuable to consumers. Businesses want the same content. Why would we keep these two universes separate?" said Larry Bowden, vice president of the IBM Lotus division for portals and Web services.

While Internet access, and thereby Google Gadgets, may be easily available to consumers, many businesses restrict access to the latest Web applications for security reasons, to make network management easier and to limit employee distractions.

By allowing Google Gadgets to work within its WebSphere Portal, IBM is making it easier for companies to give employees access to popular Web applications while keeping control over how they are used. Companies can decide which Google Gadgets they can see.

"The end user decides: We no longer need to go off and call a technician," Bowden said. "The power has been turned over to the people who know best. You know best."

It looks like IBM gets it and is trying to help its IT customers strike the delicate balance between control and giving users what they want.  All I can say is that the intersection of the enterprise and the web-based platform will be an interesting space to watch over the next few years and it is clearly heating up.

GOffice – what’s the big deal?

It is not a surprise that Google officially launched Google Apps Premier which is a bundled package of their hosted offerings for word processing, spreadsheets, email, calendaring, and instant messaging.  I wrote about this in the fall of 2004 when Adam Bosworth joined Google from Microsoft and wrote a lengthy blog post on the web-based platform.  Google has clearly been executing on this vision over the last two years, but I do not see this as a Microsoft killer.  While I am huge fan of web-based software and data in the cloud, there is one big problem – you always need to be connected.  For the last two weeks I have been living in a web-based world as I had to send my laptop back for service.  While I could do everything I needed to do, I must admit I was about 60% as productive as usual.  This lack of productivity partly came from clicking and waiting in my web-based Exchange offering and partly due to lots of travel which meant I could do absolutely nothing on the airplane.  What I see Google Apps doing is breaking the market into two segments – those who want to easily share and collaborate information with others in a lightweight manner and the power users who live, eat, and breathe in their productivity applications.  I certainly see myself using Google Spreadsheets to post some information on my blog but it will be a long time, before I even think about replacing my desktop productivity applications. In the meantime all of this is great for consumers as competition is forcing Microsoft to rethink their whole application strategy by incorporating a SAAS component into most of their offerings.  I can only assume that Microsoft will get better at this and make it easier for their users to work online and offline in a seamless manner.  In my web-based world, disconnected applications with an online component will rule.  Let’s see what the Adobe Apollo platform brings to the world later this year.

Small business startup kit for 2007 – mostly free!

A friend of mine called me the other day to ask for advice on what services (email, voice, apps) he should use to run his business with the caveat being that he wanted to spend as little upfront capital as possible and also have minimal ongoing maintenance headaches.  As I started thinking about his question, I remember what it was like setting up our office in 1998 and the headaches and cost of buying a Nortel phone system and phones and hiring a Microsoft networking expert to get our office set up for file sharing, back up, and email.  What a nightmare!  What was even worse was that we had to have this guy come in at least once a month for general maintenance.  So when we moved in the beginning of 2004, I vowed to outsource as much as possible.  In the end, here is what we did:

1. Exchange server – USA.net – pay monthly based on number of mailboxes and mailbox size and eliminates the headache of ongoing maintenance and backup.  also can add mobile devices like Blackberry, Good-enabled, etc. and easily provision without cap x.
2. Voice-outsourced VOIP, we have a direct pipe to a local provider, we leased some Cisco phones, and once again no upfront cap x and lots of great functionality, we pay a base monthly fee for unlimited calling.
3. Security – we bought some Cisco gear but have a small IT firm as our managed service provider remotely monitoring and updating the software with the latest patches and release.
4. Connectivity = We are networked internally on Windows and have a shared drive where we can access files.  In addition, we have a VPN for remote access to this share drive.
5. Productivity – Microsoft Office

Going back to my friend’s question, if I could set up my office now, here is what I would do:

1. Exchange server – I hate exchange and I would bail on this as soon as I can.  Instead, I would get all of my email and calendaring functionality through Google Apps for your domain – it is free and provides 2 gb of email, integrated calendaring with your email, chat and simple voice chat, and an ability to create simple web pages.  Yes this is basic but it is easy.  In addition, I expect a lot more to be offered once Jotspot is integrated along with some of the other basic Google Office apps such as word processing and spreadsheet functionality.  My one big beef which is holding me back right now is the lack of simple syncing with wireless devices.  There are some apps you can plug in to sync Google calendar but they still need some work.
2. Voice – if I want something more robust I would get a Fonality PBXtra for $995.  If you choose to go the really simple route, the PC-only VOIP providers of today have come a long way since 2004. I am partial to Gizmo Project (wait for our new version which will be accessible through a browser – also, full disclosure, I am on the board) but Skype and other services can once again offer you pretty decent voice communications and functionality like the ability to buy your own phone number, call forwarding, and dual ringing on your computer or cell phone.
3. Security – not as important if your files are hosted offline and backed up remotely (try xdrive which is free for 5 gb or box.net (free for 1gb). 
4. Connectivity – a simple wifi network in the office can get you simple file sharing without an IT professional’s help.  If you want to collaborate with remote workers, you can use a wiki like Jotspot  or Socialtext or some of the shared storage services I mention above.  As far as remote acccess, no VPN is needed as a simple GoToMyPc account ($19.95 per pc per month) or LogMeIn (free for base functionality) can get you the access that you need without the headaches and upfront cost of a VPN.
5. Productivity-Microsoft Office but the online apps are getting better and in fact for collaboration or sharing would consider Google Office apps like spreadsheets and writely

What is amazing to me is how far and how fast we have come during the last 2 years.  The big difference is that the functionality is even better and so is the price – mostly free!  Given this, I wonder what we will be looking at 2 years from now?  Yes, one problem is that all of the solutions I list above are dependent on having an Internet connection.  What if I am not online and need access to my calendar or some office documents?  Since this is a pretty clear problem, my prediction for 2007 is that online apps get better offline client like functionality.  Maybe it will be the new Adobe Apollo platform that makes it happen for us?  What is clear is that one of the benefits of SAAS for developers is that they don’t have to code in multiple platforms.  Once you start diving into the murky world of multiple operating systems and developing clients for Windows, Mac, and Linux, it can quickly become quite messy and resource intensive.  That is why I also see 2007 as the year that offline apps become big as the Apollo platform is released and allows web developers to build an application on one platform that can be deployed cross operating system.  Also keep an eye out for Microsoft’s WPF/e (windows presentation framework everywhere see an earlier post for more info on wpf).  This is a big deal and will help SAAS-based apps continue its upward trajectory and spread from consumers to SMBs and even further into enterprises.  As an example, take a look at Jeff Nolan’s recent post about how frustrated he is with Exchange and how GMail provides a nice alternative.  With the ability to get my whole office set up with a few clicks, it is no wonder that Microsoft is running scared and embracing SAAS rather than fighting it.

Is the bar lower for a tech IPO?

I am not sure if you saw the news, but Salary.com recently filed for an IPO to raise up to $50 million. On the book is Thomas Weisel Partners, William Blair, Needham, Pacific Crest, and Wachovia. According to the S-1 filing:

Salary.com is a leading provider of on-demand compensation management solutions. Our comprehensive on-demand software applications are integrated with our proprietary data sets to automate the essential elements of our customers’ compensation management processes….

In addition to our on-demand enterprise software offerings, we also provide a series of applications through our website, which allows us to deliver salary management comparison and analysis tools to individuals and small businesses on a cost-effective, real-time basis…

We offer our solutions principally on an annual or multi-year subscription basis. Our direct sales group markets and sells our solutions primarily using the telephone and web-based demonstrations. From the introduction of our solutions in 2000 through September 30, 2006, our enterprise subscriber base has grown to approximately 1,500 companies who spend from $2,000 to more than $100,000 annually, including companies such as Wal-Mart, Home Depot, Procter & Gamble, Merrill Lynch, UPS and Cisco Systems. We also sell to both individual consumers and smaller businesses through our Salary.com website.

From April 2001 through June 30, 2006, we achieved 21 consecutive quarters of revenue growth. During the years ended March 31, 2004, 2005 and 2006, we achieved positive operating cash flows of $0.3 million, $0.9 million and $1.8 million, respectively, and used $0.7 million of cash in the three months ended June 30, 2006. During these periods, we have consistently incurred operating losses, including $0.8 million for 2004, $1.9 million for 2005, $3.0 million for 2006 and $0.8 million for the three months ended June 30, 2006. As of June 30, 2006, we had an accumulated deficit of $21.8 million.

I would usually put IPO filings in the nonevent category but as I dug deeper into the company and financial performance, it did raise some interesting questions for me.  First and foremost, the traditional rule of thumb that most investment bankers have quoted me in the last couple of years was that in order to go public a company needs to have an annual run-rate of $40-50mm of revenue and a couple quarters of profitability.  While the Salary.com numbers are strong (read the S-1 here), they are not close to those metrics.  In fact, during the last 3 fiscal years for the company, it did $6.4mm, $10mm, and then $15mm in revenue.  The trailing twelve month number is closer to $20mm in revenue.  While slightly cash flow positive, the company is not GAAP profitable.  So the natural question for me is to ask whether or not the barrier for a private company to go public is much lower today and whether or not this will signal an ongoing trend in the future.  This is obviously relevant for a number of reasons.  Outside of a few outliers, most of the returns generated for VCs have been from M&A transactions.  If the IPO markets open up again, it would give investors and entrepreneurs another option to create value.  Using a back of the napkin analysis, most companies sell about 20% of their stock to the public, so one could assume that Salary.com is valued at around $200mm pre-money implying a 10x multiple on trailing twelve month revenue.  I must say that sounds quite appealing.  Anyway, we should all watch this company as it goes through its paces because if it does well, it could open the door for plenty of other companies like it.  There must clearly be an appetite from the institutional money managers who are looking for more upside from rapidly growing small cap companies.  By the way, one other interesting point about Salary.com is that is an on-demand application play with some web-based advertising thrown into the mix.  It is also mostly a subscription-based business which means it has a highly predictable revenue stream which is great for forecasting future performance.  Finally, the company only raised $5mm of VC dollars so it is highly capital efficient.  If you read from the S-1 above, most of the sales are generated through the telephone or through web-based demos, all of the traits for a nice frictionless sale and great business model.

Utility computing for the web and startups

There is a great BusinessWeek article outlining Amazon’s ambition to be a utility for web businesses.  This reminds me of a conversation I had last month with a founder and former CTO of one our of our prior portfolio companies who said his goal was to have a highly successful SAAS play with 1 operations guy instead of 20.  When I asked him how he would do it, he quite simply said Amazon – Amazon EC2 (Elastic Compute Cloud) and Amazon S3 for storage.  Sure, I had heard about this before when Amazon launched it during the summer, but what really got me thinking was that here was a guy who had been there and done it – scaled a SAAS business to incredible numbers and he had been playing around with Amazon’s infrastructure and was willing to offload a majority of his new startup’s business on the Amazon infrastructure.  When we talk about the commoditization of technology and how cheap it is to launch a new business on the web, we think open source and commodity servers. Now think about being able to launch a new web-based business and only paying for what you use.  If it takes you awhile to scale you don’t have to burn alot of capital upfront and only pay for minimal usage.  If you are hugely successful, then you don’t get caught with your pants down because you have the opportunity to quickly load a few more virtualized images on the Amazon EC2 infrastructure and pay more for that usage – bandwidth, storage, and compute time.  Think about it –  the upfront cost of starting a new web-based business if you went the Amazon route (when it is ready for primetime) has been driven down another order of magnitude as you can get started with little to no capital expenditures. The numbers are pretty incredible too – $0.15c per GB per month for storage or $150 per terabyte per month, $0.20c per GB for bandwidth, and the use of a pretty standard server (1.7Ghz x86 processor, 1.75GB of RAM, 160GB of local disk, and 250Mb/s of network bandwidth) for $0.10c per hour or $72 per server per month.  Not too bad when you think that you can scale up or scale down pretty easily.  It will be interesting to see how many startups look to use the Amazon infrastructure after it gets more publicized at the Web 2.0 conference.  As a startup, your job is to allocate your scarce resources as efficiently as possible – time and money.  If you can stretch either of these and give your company more of an opportunity to hit critical milestones or get better product out the door, then it is a huge win for you to spend your dollars on making that happen, rather than on capital equipment.

Revolutionary technology with evolutionary implementation

I was riding on the train this morning and was talking to a friend about one of my fund’s portfolio companies.  She mentioned that the management team had done a great job during a recent sales presentation because instead of going for the "rip and replace" strategy, they went with the "co-exist" philosophy.  Too often, entrepreneurs can get too enamored with their own technology and forget that the customer may not need every feature that you are offering today.  In fact, while revolutionary technology and vision is great, what the customer may want is an evolutionary approach to implementation.  What I am talking about here is reducing the friction in your sales process (See an earlier post on frictionless sales).  Convincing a customer that your technology or product can coexist with an existing investment is a much lower barrier to sales than convincing them to "rip and replace" or "forklift upgrade" a significant prior investment.  The sales prospect will have a hard enough time buying a product/service from an unproven startup, let alone ripping out an existing investment from a safe choice, a much larger public vendor.  Once you land the customer, you will always have the chance to expand your footprint.  That is why I continue to be enamored with SAAS and downloadable software because I believe that it is inherently a more efficient and cost effective way of selling and delivering a product or service.  Granted, most of the initial target market opportunities will be the small/medium business market but I still firmly believe that this market is untapped and offers great upside.

Google and enterprise SAAS

There has been lots of discussion about Google going after Microsoft with a focus on collaborative office tools vs. siloed, desktop-oriented ones.  I can definitely see a need for some of what Google has to offer particularly with the ease of use of unlocking data and analysis and sharing it with others.  All that being said, I have a hard time viewing their offering as a replacement for Microsoft office.  What I have always thought, however, is what Charlie Wood mentioned in his blog – that a partnership between Google and Salesforce.com could make sense .  For more background, I suggest reading a recent Red Herring article and one of my posts from Oct 2004 about goffice and specifically about a Google/Salesforce partnership.  My thinking has evolved over the last two years and while there may or may not be a partnership, I certainly envision a time in the future where Google offers an even lower end offering -think free, ad-supported hosted CRM and other simple ERP related apps for the SMB market.  This would allow Google to leverage its strength – online distribution and a huge user community.  Of course, customers and users will have to get over the data privacy issue but free and easy can be quite compelling.  In addition as more users sign up, I could see Google offering APIs so that its own users could build custom templates for certain verticals ala Salesforce’s community approach.  As the widgetization of the web happens, think how easy it could be for a SMB to have a hosted web portal that is password protected and a number of widgets like a sales pipeline, presence and one click communication for the employees, and certain financials embedded in the page with a few simple clicks.  All of the enterprise portal infrastructure like Epicentric that used to cost boatloads of money and take months to integrate can now be used by many a SMB as we move towards a one-click world.  I am not saying that free and ad-supported SAAS apps will take over the world but Google will eventually do it and it will be interesting to see how the market reacts to it.  Ok-enough said on that.

Citrix Online – a SAAS powerhouse

Everyone knows that hindsight is 20/20.  Back in 2003 when we were deciding whether or not to sell Expertcity (GoToMyPC and GoToMeeting) to Citrix or continue fighting the fight and attempt to take the company public 1 year later, it was quite a gut-wrenching decision.  Ultimately we decided that the risk/reward ratio to sell at that time was better than going for the public offering.  As it turns out, we all did quite well and it is great to see that a few years later that Expertcity (now known as Citrix Online) is continuing to drive the numbers that we believed we could do.  When most people think of the poster children of SAAS, they think of Salesforce.com, WebX, and RIghtNow.  As Phil Wainewright of ZDNet mentions in his blog, let’s not forget about the powerhouse that is now Citrix Online.  According to Phil Wainewright:

Acquired as Expertcity in February 2004, the Citrix Online division is an on-demand giant in its own right, with trailing twelve month (TTM) revenues of $121.6 million to June 30th this year. That makes it even bigger than the number 2 on-demand CRM vendor RightNow Technologies, which reported a TTM of $99.3 million for the same period, and more than a third the size of web conferencing leader WebEx, with a TTM of $343.7 million (for comparison, on-demand poster child salesforce.com posted $396.6 million TTM with its latest results).

Even more impressive is the fact that the company grew from $35mm in revenue from the end of 2003 to around $121mm in revenue 3 years later – not too shabby for an on-demand play going after the SMB market.  In addition, at the time of the sale, the company had raised around $30mm in financing but still had $16mm on the balance sheet when the transaction was completed.  So it is hard to argue that the SAAS model if done right can be capital efficient and offer tremendous growth opportunities.  In my mind, there are two ways to look at SAAS offerings – vertical market applications or horizontal plays.  Of course the challenge is that many vertical market app plays may not be big enough and the horizontal plays have probably been done already and are quite competitive.  All that being said, I am still quite interested in looking at companies offering a SAAS platform for Prosumers and SMBs.  If you have any of these types of companies that you want to show me, I am all ears.  I love the model and numbers like this show that the SMB market is really ready for these types of offerings.  As Brett Caine, head of Citrix Online says:

"Companies such as Citrix Online and salesforce.com and lots of others are starting to demonstrate in a very real way that companies of all sizes are able to use services to meet their needs in a cost-effective manner," Caine told me. "I think SMB has fully embraced the services model. There’s no doubt about that. Companies of all sizes have started to seriously embrace the software-as-a-service model."

I know I am preaching to the choir as none of this is new, but I must admit that the growth is pretty impressive.  As you know, SAAS will only get stronger as broadband penetration increases, as our wireless devices gain more processing power and better connectivity, and as the tools to access, share, and deliver timely data get even more powerful and easier to implement (think AJAX, enterprise mashups, lightweight integration with other apps, RSS for simple data delivery).

Going back to the earlier point on deciding to hold and go public or to sell at that time, with perfect information it is easy to conclude that we should have held on to the company and continued building it up.  However the decision is not that easy as there was lots of uncertainy at the time – we were only a two trick pony at the time and had not launched GoToMeeting and did not know how successful it would be, we did not have a sales channel to leverage like a Citrix, the IPO window was virtually shut for 2 years and we did not know when and how big you had to be for it to open (Google was one of the few Internet companies to go out in 2004), our growth rate was slowing while our subscriber churn was slowly increasing from just the remote access product, and the price was quite attractive.  Once again you can always question your decisions looking back with perfect knowledge but I can honestly say that everyone still feels that we chose the right path given what we knew in 2003.

Can Microsoft reinvent itself?

Microsoft released its third quarter numbers the other day and while revenue growth was strong, the stock got hammered and dropped over 10%.  Why? Microsoft plans on investing for the long term and putting another $2b into the Internet and other new technologies like the XBox.  To sum it up, here is Rick Sherlund, Goldman Sachs’ Software analyst, "It sounds like you’re building a Google or building a Yahoo! inside the company."

Looking at the long term, I am quite excited about the prospects of all of this money coming into help grow the Internet sector and SaaS.  First, having another big player push the concept of software as a service will only help further educate and soften the market, particularly business customers  Secondly, this will mean that Microsoft will be aggressive with hiring and with acquisitions.  I remember being at the Microsoft VC Summit a couple of years ago and hearing Steve Ballmer talk about his acquisition strategy.  He would either do huge, billion dollar ones or look at acquisitions less than $20mm.  That has been changing and will change rapidly with this renewed empahsis and focus.  That only means good news for VCs and entrepreneurs.  And as a VC, I wholeheartedly agree with Microsoft’s CFO, Chris Lidell when he says, "Today, we believe we face the largest array of opportunities for growth and innovation the company has ever seen." I certainly feel the same way from a VC investment perspective.

Whether Microsoft succeeds or not is another story, but $2b invested in new technologies will go a long way towards solidifying their position.  I would say that they did alright in 1995 when they decided to point their guns at Netscape to make sure the browser and Internet would not circumvent their monopoly on the desktop.  The problem is that once they won the browser wars, Microsoft became satisfied, fat and happy. And as we all know, fat cats don’t hunt.  Others came around and outinnovated them – Firefox, Google, etc. 

This is Round 2, which really started with Microsoft’s purchase of Groove Networks and Ray Ozzie last year.  To refresh your memory, I suggest reading Bill’s email from October 2005 (also see the Ray Ozzie memo) where he leads the battle charge for the next generation web, the SaaS era. 

Today, the opportunity is to utilize the Internet to make software far more powerful by incorporating a services model which will simplify the work that IT departments and developers have to do while providing new capabilities…..

However, to lead we need to do far more. The broad and rich foundation of the internet will unleash a "services wave" of applications and experiences available instantly over the internet to millions of users. Advertising has emerged as a powerful new means by which to directly and indirectly fund the creation and delivery of software and services along with subscriptions and license fees. Services designed to scale to tens or hundreds of millions will dramatically change the nature and cost of solutions deliverable to enterprises or small businesses.

And yes, it sounds alot like the memo Bill Gates wrote 10 years ago called the Internet Tidal Wave where he helped the big battleship called Microsoft reposition itself and point its guns at Netscape and others.  Round 2 is no different from Round 1 but the stakes are higher and it will cost Microsoft oodles more cash this time to create a dent in this market.  While we all know that memos often do not mean a whole lot, it is clear that Microsoft is quite serious as they are not afraid to piss off Wall Street and really put dollars to work for the long term position of the business.  This will certainly be an interesting battle to watch over the next few years.

DIY in the Enterprise

As I wrote last year, this "web as platform" gospel is starting to spread quickly from consumer to thoughts on the enterprise.  In my mind, what has enabled this enterprise web phenonomenon has been two thoughts – lightweight and simple.  Of course, lightweight and simple equals cheap and fast to implement.  It is quite easy now for sophisticated users to find and download new software and run it themselves, for them to take simple scripts and tie together various web apps.  We are quickly moving to a world where the end user on the edge can and has taken matters into his own hands rather than wait for IT to get something done for them. I call this the age of DIY (do it yourself) in the Enterprise.  Why go through centralized IT and their processes when I can get something done with my own departmental budget?  Linux, Jboss, and many of the open source opportunities started at the edges first before being brought into the centralized IT organization.  As we all know, many new technologies are typically adopted by consumers and then pulled into the enterprise, not pushed.  Amazon and other web apps started exposing their APIs and existed long before Salesforce.com. 

Jeff Nolan points to an interesting post from John Hagel which highlights this changing enterprise world. What has been deemed as the agile enterprise driven by SOA has actually turned into anything but.  The enterprise version of "lightweight" called SOA stands in stark contrast to the next generation web perspective of lightweight.  As John correctly points out, enterprise lightweight in the form of SOA means plumbing, it means expensive, it means complex, it means lots of consultants, and it means lots of dollars.  In contrast, next generation web technologies are easy, incremental, and driven by the edge and focused on people, not plumbing.  While some of these next generation apps may not scale, there is clearly something that centralized IT can learn from the edge, their frustrated internal customer, that things can get done more quickly and more cheaply.  As these two philosophies become more tightly coupled we will have some interesting opportunities to invest and make money.  While not directly related to this SOA/web mashup discussion, one of the companies I have always found interesting is Splunk which is bringing a Google-like approach to network management.  It is downloaded, driven by the edge user, and then pulled into the corporation from the bottom-up rather than the top-down.  It stands in stark contrast to EMC’s (Smarts) and IBM’s (Micromuse) way of selling and using their respective products.  There will be many more opportunities like this in the enterprise as enterpreneurs leverage user interfaces and technology from the consumer world in the enterprise. Of course, this means a whole new way of reaching customers (frictionless sales), selling to them, and supporting them but this is saved for another future post.  The good news is that this new age of DIY in the Enterprise is not going away and is only getting stronger everyday.  This also means the creation of many more disruptive enterprise software opportunities in the next 5 years.  I agree with Jeff that this is an interesting area to watch and is beyond web mashups-rather, it is a philosophy enabled by all of this new technology, the philosophy of DIY in the Enterprise.