Enterprise Startups: A Long Road Ahead

Like the mythical Greek tragic figure, Sisyphus, forced to roll a boulder up a hill only to watch it roll down again, tech startups hoping to woo the enterprise face an uphill battle.

How steep is this hill?

“You have to be 10 times better than the incumbents, not incrementally better,” Tom Gillis, founding member of Ironport Systems (acquired by Cisco Systems) and current vice president of security technology at Cisco, told a packed room at this year’s Demo Fall 2011 Conference in Silicon Valley taking place this week.

Slideshow: Hot Products from DEMOfall ’11

Startups showcased their enterprise offerings at DEMO Fall 2011 this morning. The presentations had a real international flavor:

Chinese entrepreneurs detailed Plastico.com, a cloud-based supply chain management offering. Indian executives described enterprise software called Whodini that searches corporate e-mails and automatically builds employee profiles. A Russian woman discussed Virtual Interactive Podium, which offers a virtual fitting room where people can try on different outfits using videos of themselves.

Virtual cross-dressing jokes opened the panel that followed the presentations.

Humor aside, the panel, which consisted of Gillis, SugarCRM CEO Larry Augustin, and General Partner Paul Santinelli of North Bridge Venture Partners, described the challenges facing enterprise startups.

All three executives said they liked Whodini’s ability for co-workers who have never actually met to find each other and collaborate on projects, but worried about privacy issues over e-mail searching.

“At what point does it cross over from being useful to creepy and intrusive?” asks Augustin.

Augustin also took issue with a startup’s poorly thought out name in regards to Google Search. “Make sure you’ve got the name for Google,” he says. When you Google Whodini, for instance, links to the 1981 rap group of the same name get called up.

The panel also liked Fluxx, a business-intelligence tool that delivers real-time information via an easily digestible dashboard. A sales manager, for instance, will be able to see streams of data from direct reports.

Other presenters included: Conferize, a social network for conferences; Workforward Center, a new module in Metier’s project portfolio managment software suite; and Vidquik, a Web conferencing tool similar to WebEx but requiring just email invitations.

Will tools like Vidquik be enough to unseat incumbents like WebEx? Unlikely, say the panelists.

The best enterprise innovations must solve a CIO’s pressing problem, says Santinelli. Too many startups try to “educate” a CIO about a problem, adds Augustin. That is, they try to create a problem that their solution solves. But this isn’t going to get the job done. The problem needs to be obvious to the CIO, panelists say.

“I have 17,000 sales guys who have a grip on the enterprise,” says Gillis. Startups will need to solve big problems or have an offering that’s vastly superior to an incumbent’s, he says, “if you’re going to break that grip.”

Tom Kaneshige covers Apple and Networking for CIO.com. Follow Tom on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Tom at tkanshige@cio.com