10 enterprise software companies to watch

Open source, software-as-a-service and other application start-ups of note

From business intelligence to CRM, from scheduling and e-procurement to database management and data governance, there is no shortage of enterprise software applications available to help businesses make their processes more efficient. Choosing can be difficult, however: Do you go open source? Software-as-a-service, or in-house deployment? Every vendor has a sales pitch. Here are 10 worth watching.

Funding: $10 million in venture capital from the Mayfield Fund and Accel.

Who’s using the product? More than 200 customers, including E*Trade Financial; the European Commission; H&R Block; Harvard University; the Massachusetts Institute of Technology; the National Aeronautics and Space Administration; and Sears, Roebuck. The free version of the product has been downloaded more than 500,000 times, the company says.

2. Coupa Software

Founded: February 2006

Location: Foster City, Calif.

What does the company offer? Coupa eProcurement Express, which came out in March and is an open source e-procurement system for midsize businesses. Coupa also plans a software-as-a-service version, and offers an enterprise version in beta that is expected to become available generally in the next couple of months. The enterprise version will cost less than $50,000 to $60,000 for companies with 300 to 500 employees, Coupa says.

Why is it worth watching? Coupa’s founders are Oracle veterans Dave Stephens and Noah Eisner, who played key roles in developing Oracle’s procurement applications. Stephens, Coupa’s CEO, spent nearly 10 years building enterprise applications at Oracle but found they were too complex for midsize businesses. With eProcurement Express, Coupa aims to simplify the purchasing process with Amazon.com-like features that make the product “easier to use than avoid,” in Stephens’ words. As an open source tool, Coupa’s software may appeal to businesses looking for a less-expensive alternative to established products. “What I saw [working at Oracle] was that purchasing systems were working for Fortune 100 companies and maybe to some extent for Fortune 500 companies,” Stephens says. “There never was a solution that had the right ingredients to go mainstream. . . . These software packages came out and cost millions of dollars. You’d better be spending billions of dollars to get any return on investment.”

How did the company get its start? The founders saw that many enterprise employees do not use e-procurement applications because of their complexity, and decided to build a simple-to-use version that would appeal to “average Joe's.”

How did the company get its name? Coupa is the name of a coffee shop where Stephens and Eisner did some of the work developing the application. In addition, Coupa sounds like “couper,” the French word for “cut” — as in cutting expenses through more efficient procurement.

CEO and background: Stephens became a vice president at Oracle in 2002, leading the procurement applications group, where he stayed until founding Coupa.

Funding: Less than $2 million from private investors and the venture capital firm BlueRun Ventures.

Who’s using the product? The open source product has been downloaded more than 4,000 times since becoming available in beta last July, Coupa says. The beta release of the enterprise version has three or four customers in service industries.

3. InvisibleCRM

Founded: Early 2005

Location: Moscow and San Mateo, Calif.

What does the company offer? Add-on products for Salesforce.com, Amdocs and Documentum (now part of EMC). Examples include SalesFolder, which maps Salesforce document repositories to local desktop folders to provide offline access, and automates sharing and delivery of documents. Another product, Outlook Integration for Amdocs CRM, synchronizes Outlook and Amdocs data and streamlines scheduling and communications with customers.

Why is it worth watching? The biggest challenge in deploying a CRM application is getting employees to use it, says Nucleus Research in a report on InvisibleCRM. “InvisibleCRM synchronizes Salesforce.com with Windows desktop applications to automatically update, store, and transfer customer information between the desktop and the CRM system,” the firm writes.“The result is increased user adoption of CRM, better ROI, and a happier sales force.” Nucleus analyst Rebecca Wettemann says the company eliminates the question of user adoption because users never have to touch the CRM system.

How did the company get its start? The founders, who were managing software development companies, decided to make an easy-to-use CRM application after being faced with resistance from sales reps who hated the CRM software provided to them.

How did the company get its name? InvisibleCRM refers to the company’s goal of making users forget they are working with a CRM application. “Our idea was to meld CRM functionality as deep in Windows and Outlook as possible, so people work with their daily tools, but in fact they are also working with CRM,” CEO and co-founder Vlad Voskresensky writes in an e-mail.

CEO and background: Voskresensky co-founded Afortio, a software development company, and was its CEO.

Funding: $1.5 million in venture capital from Martinson Trigon Venture Partners and ABRT Venture Fund.

Who’s using the product? About 50 customers including Blue Cube Security and Fernbrook Services.

4. Kineticsware

Founded: September 2006

Location: Kirkland, Wash.

What does the company offer? Kineticsware sells extensions to the Microsoft Dynamics and Microsoft Dynamics CRM platform to companies in the supply-chain-intensive high tech, consumer goods and apparel industries. The software addresses customer and supplier collaboration, e-procurement, business-to-business integration, sales and operations planning, supply chain planning, and customer life-cycle management. The company launched its product line in March. Most deployments will cost $50,000 to $300,000.

Why is it worth watching? Kineticsware was founded by Jeffrey Sampson and Richard Barnett, the former heads of the Microsoft Dynamics line of products for financials, supply chain and CRM.

How did the company get its start? Sampson and Barnett left Microsoft in June after the $100 million sale of the thePlatform for Media to Comcast. Sampson had been managing partner of a venture capital firm that funded thePlatform, and decided to leave Microsoft when he received his share of the sale’s proceeds.

How did the company get its name? Kineticsware refers to kinetic energy — the extra energy an object possesses because of its motion — as opposed to potential energy, which is stored for later use. Barnett says they chose the name because Kineticsware lets customers innovate quickly and adapt to opportunities presented by the Microsoft Dynamics product line.

CEO and background: Sampson, president and CEO, spent two years at Microsoft. He began his career as an investment banker, and was a senior executive at several start-up software companies before joining Microsoft.

Funding: About $2 million, largely from Sampson and such limited partners as Ron Conway, one of Google’s earliest investors, and PeopleSoft co-founder Peggy Taylor.

Who’s using the product? The first customer is Microsoft’s Xbox.

5. LucidEra

Founded: July 2005

Location: San Mateo, Calif.

What does the company offer? Business intelligence for midsize firms in the software-as-a-service model.

Why is it worth watching? LucidEra lets customers outsource business intelligence with an application that is relatively simple to set up and use. “Behind the scenes, LucidEra prepares and presents the business data to you,” the company says. “We house the platform that delivers the information; all you do is point the LucidEra service to your company’s applications and other external data sources. No special skills are needed.” The company went to market in March after several months in beta. Pricing starts at about $3,000 per customer, per month, which covers the first 100 user seats, connectors to three data sources and forecast-to-billing software that combines sales and financial data.

How did the company get its start? CEO and co-founder Ken Rudin, who was formerly the vice president of marketing for Siebel Analytics and ran a consulting company that did business-intelligence implementations, wanted a business intelligence tool that would be affordable for midsize businesses. Instead of answering “any question about anything you can think of,” LucidEra focuses on answering the questions business employees are most likely to ask, Rudin says. “I was always frustrated by the fact that (business intelligence is) so complex, that unless you’re in a very large company, implementing one of these solutions wasn’t going to be feasible,” Rudin says.

How did the company get its name? “LucidEra” signifies the company’s goal of providing visibility into what is happening within a business.

CEO and background: In addition to Siebel, Rudin has worked at Salesforce.com, NetSuite and Oracle. After his stint as vice president of marketing for Siebel Analytics, he was vice president and general manager of Siebel CRM OnDemand.

Funding: $7 million in venture funding from Benchmark Capital and Matrix Partners.

Who’s using the product? About a dozen customers, including IronPort Systems, Ingres, 3PARdata and SuccessFactors.

6. Panoratio

Founded: March 2003

Location: Munich, Germany, and San Francisco.

What does the company offer? The Dynamic Data Discovery Solution, which enhances business intelligence with technology that creates dense images of complex data sets, thus allowing large amounts of data to be analyzed in files small enough for a PC or laptop. Data files are reduced to a fraction of their original size without any analytical detail being lost, the company says. The product has been available since late 2004.

Why is it worth watching? Panoratio, a spinoff from German industry giant Siemens, makes “a precise and complete image of the entire complex data set in a file format that can be easily managed and distributed for use by individuals and applications across the organization,” analyst firm Gartner wrote last year in its “Cool Vendors” report.

How did the company get its start? When Panoratio founders Reimar Hofmann and Michael Haft were at Siemens' Artificial Intelligence/Machine Learning Laboratory, they developed software to address the problem of sensors throughout Siemens Westinghouse power plants creating data sets so complex they could not be analyzed efficiently. The software Hofmann and Haft created to reduce the size of the data set without losing its detail or complexity led to the founding of Panoratio.

How did the company get its name? "Panoratio" is a combination of Greek and Latin words that roughly make up the phrase “all-seeing method,” says President and CEO Brett Kilpatrick. "Pano" is similar to the Greek word "pan-", which means "all," and that reminds Panoratio executives of their mission to be "all-seeing." "Ratio" is Latin for “method.”

CEO and background: Kilpatrick has more than 20 years of technology experience at Accrue Software, Alterian, AvantGo, Determine Software, IONA Technologies, Narus, Oracle and Versant.

Funding: More than $10 million from sources including DVC Deutsche Venture Capital and Siemens Venture Capital.

Who’s using the product? More than 40 customers, primarily in healthcare, e-commerce, electronic media and industrial businesses. Customers include Siemens, AOL Germany, and Yahoo.

7. TimeBridge

Founded: May 2005

Location: San Francisco and Rehovot, Israel.

What does the company offer? TimeBridge for Outlook, a personal scheduling manager that adds Web 2.0-like collaboration features to Microsoft Outlook. “With TimeBridge one-step scheduling,” the company states on its Web site, “you select participants and send alternative meeting times using your Outlook e-mail. TimeBridge does all the rest — collects everyone’s availability, quickly finds and confirms the best time, creates an online space for documents and comments, and updates your calendar.” The product launched in beta five months ago.

Why is it worth watching? Some industry watchers have pegged TimeBridge as one of the most interesting Web 2.0 startups. An advisory board stocked with executives from AOL, Google, Yahoo, O’Reilly AlphaTech Ventures and other organizations selected TimeBridge as one of 13 innovative new companies allowed to launch products at last November’s Web 2.0 summit in San Francisco.

How did the company get its start? Co-founder and CEO Yori Nelken wanted to make knowledge workers more productive. He had discussions with more than 100 experts and concluded that no one had solved the problems that prevent efficient meeting scheduling. “We are decidedly not a calendar, but we fill the space between calendars,” Yelkin says in an e-mail.

How did the company get its name? TimeBridge was originally called Zaplink, but the founders changed the name to reflect more accurately their product’s function.

CEO and background: In 1997, Yelkin founded Banter, which used natural-language-processing technology to handle the flow of unstructured data, such as e-mail, into customer service centers. Banter is now part of IBM.

Funding: $6 million in venture capital from Mayfield Fund and Norwest Venture Partners.

Who’s using the product? Several hundred beta users, typically busy professionals who schedule an average of eight meetings a week, the company says.

8. Varonis Systems

Founded: Early 2005

Location: Herzeliya, Israel, and New York

What does the company offer? Intelligent Data Usage, a line of governance software products that control which employees in an enterprise can access data.

Why is it worth watching? Varonis’ product gives organizations control over unstructured data, such as PowerPoint presentations, Word documents and spreadsheets. “About 85% of . . . the data in most companies takes unstructured form,” says Johnnie Konstantas, vice president of marketing. “We have created a solution that essentially tells organizations who is accessing that data, and what they’re doing when they access it. . . . These are sort of all the pieces to get control of unstructured data and make sure only the right people are looking at the right data to do their jobs and nothing more.”

How did the company get its start? The founders, Yaki Faitelson and Ohad Korkus, both worked for NetVision, an Israeli ISP, where they became interested in how employees receive permission to view data, and how it is often difficult to find out why employees had permission to view data after it is deleted mistakenly.

How did the company get its name? Varonis means “lion” in Latvian. Faitelson, the CEO and president, admires the lion for its strength, endurance, power and loyalty.

CEO and background: Faitelson held leadership positions in global professional services and systems integration divisions at NetVision and Network Appliance.

Funding: $13.5 million from venture capital firms including Accel, Evergreen and Pitango Venture Capital.

Who’s using the product? Condé Nast, the Museum of Modern Art, Msystems, and various unnamed banks and financial institutions.

9. Vertica Systems

Founded: March 2005

Location: Andover, Mass.

What does the company offer? A database management system that runs on Linux-based hardware. The product, expected to be released in the second half of this year, is described by Vertica as a “grid-enabled, column-oriented relational database management system” that handles data warehousing, business intelligence, fraud detection and other applications in networks with hundreds of terabytes of data. Vertica founders say their system will return query results 10 to 100 times faster than current products. Databases built with a row-oriented architecture are optimized to write data into systems quickly and reliably, they say. Vertica’s database system, on the other hand, stores content by column rather than by row, and represents data in the format in which it is meant to be viewed, as opposed to the way it was written into the system, according to Vertica.

Why is it worth watching? Vertica was co-founded by Michael Stonebraker, the main architect of the Ingres and Postgres database management systems. Ray Lane, Oracle’s ex-president and COO, is a special adviser to Vertica, and former Oracle senior vice president Jerry Held is Vertica’s chairman.

How did the company get its start? Stonebraker and fellow co-founder Andrew Palmer, Vertica’s CEO, wanted to make data more accessible to enterprise employees. “We believe that more people in the enterprise need access to more data than ever before. Their expectations in terms of the speed of that access are going up rapidly,” Palmer says.

How did the company get its name? The name Vertica represents the company’s column-oriented approach to database management.

CEO and background: Before Vertica, Palmer was a member of the startup team at Infinity Pharmaceuticals in Boston, and was senior vice president of operations as the company raised more than $140 million in financing and grew to more than 100 employees.

Funding: $23.5 million in venture capital from Kleiner Perkins Caufield & Byers, New Enterprise Associates, Highland Capital Partners and Bessemer Venture Partners.

Who’s using the product? Ten early adopters, including HP and Red Hat.

10. Workday

Founded: March 2005

Location: Walnut Creek, Calif.

What does the company offer? Software-as-a-service ERP, including human capital, revenue, resource and financial management. Workday began offering its services in November after having operated in stealth mode since its founding. So far, only the human capital management service is on the market.

Why is it worth watching? Workday co-founder Dave Duffield, the PeopleSoft founder and former CEO, is using the software-as-a-service model to compete with SAP's and Oracle’s ERP applications that are deployed and managed by enterprises internally.

How did the company get its start? When Duffield and fellow co-founder Aneel Bhusri were working together at PeopleSoft, they decided to overhaul their product strategy while attempting to fend off Oracle’s acquisition attempt, according to Workday CTO Stan Swete. After Oracle succeeded in buying PeopleSoft, the pair “came out of that situation charged up and with some real ideas about how new solutions could be written to reinvigorate this space,” according to Swete.

How did the company get its name? Company management wants to make ERP software more relevant to everyone’s workday. They say their products are designed to meet the regulatory needs of the back office, such as financial reports written by human resources, and to provide a more accessible user interface for regular employees. “We want our system to be relevant to both sides of the business,” Swete says. “We think those two worlds can both collaborate over the same set of data.”

CEO and background: Duffield founded PeopleSoft in 1987 and served as the company’s CEO and chairman of the board before it was acquired by Oracle in January 2005. Before PeopleSoft, Duffield helped build two mainframe application software companies.

Funding: Primarily funded by Duffield, with some investment from Greylock Partners. Amount not disclosed.

Who’s using the product? Ten customers including Salesforce.com, KANA Software, McKee Foods, and RightNow Technologies.

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