Joe Kraus from JotSpot calls it “The Consumer Enterprise“. Ray Lane from Kleiner Perkins calls it “The Inter-Personal Enterprise“.

I suspect we’re naming things the way we originally called the automobile “the horseless carriage”. In other words, we are naming things based on the old worldview.

We probably need a new name for the software that is created for and sold to small groups of people but that can scale from the Very Small Business (<$100M) up to the Small and Medium business (SMB) ($100M-1B) and even up to deparments of Enterprises (>$1B). What do you call software that has that range, that can be used with small teams, and that creeps into large corporations the way PCs did in the early days?

I like this article at Sandhll where Joe says that building, marketing, and selling this type of software is much more like selling consumer goods than it is like selling traditional enterprise software. I love his tag-line “expenseable, not approveable”. It is the key to how these apps get in the door. People expense them on their credit cards rather than building a business case and shopping it around for executive approval. Before you know it, you have 1000-10,000 wiki pages inside your company that the IT department knows nothing about.

This is where enterprise software vendors are starting to move to….slowly. I doubt that many of them can make the switch. Too many things are different. The product development is shockingly different, the marketing channels are different, the sales strategies are different, and the ongoing support and maintenance of the relationship requires much more customer focus than most enterprise vendors are capable of. Not to mention the sheer scale of dealing with many MILLIONS of customers instead of thousands. How do you scale up your already overloaded brittle systems to bear an order of magnitude more transactions and support requests?? You probably don’t.

A great example of this is the content management sector. Why would anybody spend $1M for a heavy weight content management system like Documentum these days when they can go build lightweight blogs and wikis with RSS feeds and tags that are lighter, faster, simpler, and cost $50,000 to deploy? They don’t. That’s why that sector collapsed.

Maybe this is why SAP is lead sponsor on the Gartner “Small Business Vision” conference in November 2006?

We live in interesting times!