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Social Networking Startup Goes Self-Service

By Chris Kanaracus

September 02, 2008 — IDG News Service —

Social-networking site provider Socialcast announced a "self-service" pricing model on Tuesday that allows smaller customers to get up and running without the need for a formal sales process.

"Our [sales] pipeline is filled with smaller organizations," said CEO Tim Young. "We thought you'd have to have at least 400, 500 employees to have the gravitational pull for [a social network] but we found there is benefit even for small teams."

Smaller companies also face deployment challenges, given their general lack of on-site IT staff and money for outsourcing, Young added.

Beginning Monday, customers with fewer than 1,000 users can sign up for Socialcast's hosted service on a month-to-month basis for US$5 per user per month, using a credit card.

Socialcast is making the announcement as part of its 3.0 release, which also features an improved user interface and additional commenting and search capabilities.

The company is one of many "white label" social-networking vendors, which in general, enable users to customize the site to their preferred needs. Socialcast backs up and archives material created by customer networks, and an array of data classification measures helps make the information more searchable. It can also integrate with e-mail and incorporate third-party feeds from services like Twitter, YouTube and Google Talk.

While data is stored on the vendor's servers, Socialcast networks can be also connected with customers' LDAP and Active Directory systems for authentication.

Socialcast is built with the Web application framework Ruby on Rails, a platform that has seen its scalability questioned due to high-profile crashes of sites like Twitter.

"Ruby has done a lot in the last year to address scaling issues. It can be done, and very well -- it's how much experience your company has scaling Ruby," Young said.

The vendor's larger customers include the Hot Topic clothing chain and Guitar Center, Young said.

Use-case scenarios for social networks abound in retail, according to Young. For example, if a Guitar Center customer brings in a vintage guitar for repair but the local store workers don't know how to fix it, they could search network profiles for an employee who does, he said.

However, both companies like Socialcast and would-be social-networking users face a similar challenge -- dealing with the roughly 100 similar vendors in the market.

Those numbers show there is no real innovation left in the space, said Forrester Research analyst Jeremiah Owyang: "The technology is commodity."

Instead, customers should focus on factors besides features and functions, according to Owyang.

Social-networking vendors should meet the usual criteria for enterprises making software purchases, such as ongoing revenue streams, capital on hand and an ongoing list of large clients, he said.

 

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