Startups Get The Spotlight At Web 2.0 Summit

By Antone Gonsalves
InformationWeek

Startups are behind many of the innovative services offered in the emerging Web 2.0. While many Internet companies evaporated during the dot-com crash in 2000, new ones have been born in the next-generation Internet, taking advantage of the growing use of broadband and better technology for building browser-based applications. During the Web 2.0 Summit in San Francisco Wednesday, many startups were mentioned as favorites of panelists at the conference’s workshops. Here’s a sampling of the sites that got the nod from their peers:

37Signals

37Signals targets individuals and small businesseswith Web-based software with the least number of features necessary. “Our products do less than the competition ” intentionally,” the company says on its Website.

Products include Basecamp, a project management and collaboration app for sharing schedules, files, messages, tasks and more with team members or clients. Other services include Highrise for tracking leads, clients, and vendors; Backpack for calendaring and organizing ideas, to-dos, notes, photos and files; and Campfire for group chat.

EchoSign

EchoSign is a signature service that claims to be used by more than 125,000 businesses and individuals. The service enables users to sign documents over the Web, or through fax. The service also can store and manage signed agreements. Among the company’s partners is Salesforce.com.

ThinkFree

ThinkFree, which is in beta, bills itself as a “free online alternative to Microsoft Office.” The site offers 1Gbyte of free storage, document collaboration and a document viewer that enables users to edit Microsoft Office documents, spreadsheets and presentations online. The company, which targets small businesses, also offers offline software that’s being optimized for Intel-based mobile Internet devices, which are essentially handheld computers.

Workspace

Workspace has launched its “sandbox release,” which is the testing version of the site’s online development environment. Features includes a syntax highlighting editor for editing text, PHP, JavaScript, HTML, Java, Perl, SQL, and other types of files directly on a remote server. The online utility also provides tools for finding and managing files on a number of FTP sites simultaneously. Each user also gets some storage on Workspace servers.

Virgin Charter

Virgin Charter plans to make generally available in February 2008 an online marketplace for booking travel on private planes. The site offers tools for small aviation companies and potential customers to negotiate deals for private jet travel. People or businesses looking for a private jet initiate the process by posting trip itineraries to solicit bids. The site plans to offer ratings on buyers and sellers to help both sides in the negotiation process.

Zoho

Zoho offers online productivity applications that include a word processor, spreadsheet, presentation tool and organizer. The company’s services, however, go beyond what most people would associate with Microsoft Office. Other Web tools include conferencing software, an organizer, a project management application, a full-feature Wiki, collaboration groupware, and chat. In general, Zoho is a lot about Web-based collaboration and communication.

The event, which runs through October 19, is expected to be chocked full of discussion and debate about the most important issues and strategies driving the Internet economy and what we might expect in the coming year.

Headlining the bill will be Rupert Murdoch, chairman and CEO of News Corp., as well as Microsoft chief executive Steve Ballmer, eBay chief executive Meg Whitman, Randall Stephenson, CEO of AT&T, and Philippe Dauman, CEO of Viacom.

Source: Information Week

How to Learn Search Engine Optimization

By Anita Campbell

Every business wants to be found. Figuring out how to get your business to show up in the rankings when a potential customer uses a search engine is an art form.

Search engine optimization (SEO) is fast becoming a must-have body of knowledge for business owners. Nearly 91 percent of all Internet users resort to a search engine to find information, according to a recent survey by the non-profit Pew Internet and American Life Project. The question is: how easily can they find your business?

You already could be making costly mistakes, such as a home page that is almost all images and little text, causing your site to have unnecessarily low rankings and little traffic. Or worse, you could be using hidden text and winding up with an every more onerous problem because some search engines ban sites that use tricks to improve rankings.

Whether you are a do-it-yourselfer or you use an outside SEO firm, the more you know the more effective and successful your business can be online. I’ve assembled the five best categories of resources for business owners to learn about SEO and search marketing. To help with this article, I interviewed Jennifer Laycock, editor-in-chief of Search Engine Guide, a website designed specifically for business owners and entrepreneurs.

Conferences and seminars

Attending search engine conferences is the fastest way to learn because it immerses you in the subject. When you are starting out, choose events designed to give well-rounded instruction in basic principles, such as Jill Whalen’s High Rankings seminars.

Don’t go to advanced events intended for industry experts until you first learn the basics — trust me, you will just feel frustrated. However, there is one good reason for a newbie to attend events targeting industry professionals, such as Search Engine Strategies conferences. That’s to find and interview SEO vendors. At no other venue will you find so many search professionals in one place at one time.

Books

There are a few excellent eBooks — downloadable PDF documents — suitable for beginners. The best eBooks typically come with a package of extras, such as lifetime updates, private forums, sometimes even money-back guarantees.

Aaron Wall’s SEO Book is widely acknowledged as one of the best.

Laycock’s own Small Business Guide to Search Engine Marketing is another I would recommend, because it focuses on SEO from the perspective of a business owner who is not a search expert.

Printed books, another possibility, are less expensive ($15 -$30 for printed books versus $75 – $100 for eBooks). The disadvantage is that printed books can get out of date quickly because search constantly changes. Tactics accepted several years ago, such as doorway pages, today may get your site dropped by search engines. If you opt for a printed book, make sure it is reasonably recent.

Newsletters and blogs

One of the great things about the Web today is that we are lucky to have so many excellent free newsletters and blogs on search. Among newsletters, Jill Whalen’s High Rankings is notable, because she answers real-life questions from readers.

Among blogs designed for business owners, a particularly helpful one is Small Business SEM. Carston Cumbrowski also has a helpful page of resources for SEO beginners.

Search Engine Land featuring search guru Danny Sullivan, is a good one to add to your reading list later on as your knowledge builds. It is industry focused, but has the advantage of experts who write on specific topics such as link-building and contextual advertising — not to mention its excellent blogroll of search sites to explore.

Discussion forums

As you begin to learn some of the basics of SEO, you will have questions. Head to discussion forums to get answers. Discussion forums are excellent sounding boards to bounce ideas off of others. Try Webmaster World and Digital Point Forums.

When you first approach a new discussion forum, read and observe for a while before jumping in to participate. Every forum has a “personality” all its own — make sure you feel comfortable. Observing also helps you learn which participants’ advice to trust. Some participants are more knowledgeable than others.

Interactive tools

No article on search for newbies would be complete without mentioning some of the excellent free or low-cost tools available. I have learned a great deal simply through using tools such as:

• WordTracker keyword tool — Using relevant keywords in your site content and when purchasing search ads can make all the difference in attracting visitors who actually buy. You may already know the obvious keywords, but WordTracker helps you broaden your choices to identify non-obvious terms. A free trial or a single day’s subscription costs around $8.
• Analytics programs — These help you understand which parts of your site visitors use most, such as which navigation links they click on most. Armed with that knowledge, you can make changes to your site to emphasize the most important elements to increase sales and newsletter signups. Google Analytics is a robust free analytics tool. For those who run Google AdWords campaigns and do not like the idea of giving sensitive site data to the same company you purchase ads from, ClickTracks is an alternative. ClickTracks offers a free version called ClickTracks Appetizer.
• SEO Moz page strength tool — This interactive tool gives you a quick snapshot of some of the factors search engines consider when determining site rankings. Don’t take it as the complete word on ranking factors, but do have fun with it.

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The Monster Dilemma

By David H. Freedman

Posting jobs on the Web is easy. It’s sifting through hundreds of resumés that’s a pain.

For business owners plagued by a dearth of candidates for key job openings, the Web was supposed to provide an ideal solution. Job-search sites like Monster.com can put postings in front of millions of applicants instantly. And newer business-oriented social networking sites like LinkedIn provide similarly fertile recruiting territory, supplying access to the contacts of thousands of people. On the other hand, anyone who’s actually tried to hire someone through the Web knows the truth: You post an ad and are immediately flooded with hundreds of resumés, many from people whose backgrounds are wildly inappropriate. So much for the Web making things easier. It’s enough to make you long for the days of print newspaper ads and snail mail.

But just as technology created the problem, newer technology aims to solve it. A new generation of hiring tools promises to screen out inappropriate applicants, allow the suitable ones to put their best foot forward, and even hunt down good candidates who haven’t applied. As these new services get better at these tasks, they may well change the balance of power in the job-recruiting industry and could even redefine the way we think about jobs.

A shot at diverting a river of weak applicants is the chief advantage offered to employers by Protuo, a Woodstock, Georgia-based start-up that launched its service in January. Protuo isn’t only a job-listing site; it also forwards its clients’ listings to some 270 established job-listing sites, including Monster. But applicants can’t respond to a Protuo posting unless they spend seven minutes or so filling out a survey that asks about experience, skills, workstyles, and job preferences. Employers can customize the survey by choosing from a wide field of prepared questions or by adding their own, and they specify which responses get a candidate’s resumé past the screen. Has the candidate managed a technical project? Is he or she willing to move? The approach is modeled, to some extent, on the sort of compatibility gauging one encounters on a matchmaking site like eHarmony, notes Jennifer Gerlach, Protuo’s co-founder and vice president of marketing. Gerlach went through the dating process on eHarmony just to research the technique. “I learned a lot,” she says. “And I met some very, very nice people.”

With online job postings sometimes pulling in more than a thousand applicants, the ability to winnow the flood could mean the difference between being able to retain control of the hiring process and having to bring in a professional recruiter–at a typical cost of $30,000 for a midlevel hire. The time and expense of dealing with a huge influx of resumés is all the more frustrating because much of the flow comes from online applicants who indiscriminately bombard hirers with resumés. You can try a keyword search on the resumés to narrow things down, but applicants have learned to load their resumés with them, often by pasting in phrases from the job posting. Even LinkedIn has suffered from inflation, as many users aggressively build networks of people they don’t really know in order to make themselves appear better connected. “There’s no value in a lot of these contacts,” says LinkedIn user Chris Knudsen, who heads business development for podcasting company Podango in Salt Lake City. “It can just be someone whose card you got at a trade show.” (A LinkedIn spokesperson commented via e-mail: “Anyone can join the LinkedIn network; however, the quality of your own personal LinkedIn network is the responsibility of each individual.”) But a well-designed survey, contends Gerlach, allows users to skim the cream.

Fred Donovan, who runs Donovan Networks, a seven-employee computer network security firm, has been flooded with applicants responding to previous postings to Monster.com and other online job boards. He is currently conducting a Protuo search and likes what he’s seen so far. “I can specify that I want to see only resumés from people who say they have 10 years’ experience in negotiating sales and are familiar with the software development process,” he says. “I’m seeing a small, better-qualified subset of the applicants.” There must be something to the idea. Other hiring sites, including Market10, Jobster, and Taleo, are introducing their own approaches to automated candidate screening. And Monster is doing the same, making available–for a fee that adds about 20 percent to the cost of posting a job–the ability to direct applicants to a questionnaire designed to rank the suitability of candidates.

Sure, candidates can try to game these surveys by being less than truthful. But Gerlach insists that surveys can be designed to stymie such people by asking questions that don’t have an obviously right answer–such as whether the person prefers to work independently or in groups–and by warning candidates that they can be rated as overqualified. Protuo, which costs hirers $44 to $295 a month depending on the number of jobs they’re posting and is currently free to job seekers, also offers applicants a chance to do more than post a resumé. The firm invites users to create online portfolios that can include whatever documents, photos, videos, or other material that best represents that person’s career to date. (Monster is currently testing a similar capability.)

ZoomInfo, in Waltham, Massachusetts, takes a different approach. It assembles profiles of potential job candidates from all available online data, whether or not they’re looking for jobs. Starting with the same techniques that Google uses to gather Web data associated with a person’s name, ZoomInfo adds the significant additional step of crunching the results to pull out the most relevant information, weed out data referring to other people of the same name, and assemble a professional profile. ZoomInfo has an R&D team of 35 working on the technology. So far, the company has assembled some 34 million profiles, and as far as I can tell, most of them are fairly informative and accurate. (Check out your own name to put it to the test.)

But somebody has to pay for all those scientists, and that somebody is you. The company charges $5,000 a user per year for the ability to dig up personnel profiles by company or industry. It sounds like a lot, but ZoomInfo’s COO, Bryan Burdick, notes that if you get the right candidate for a single vacancy, the price is one-sixth that of using a recruiting firm. The company also offers less expensive, more limited searching capabilities aimed at smaller companies, as well as free access to searches on individuals. Many major executive search firms, along with some 500 other corporations, already use ZoomInfo, claims Burdick. “I can find personal information, professional backgrounds–and, sometimes, damning evidence–on tens of millions of people without having to go through 1.5 million Google hits on each one,” says John Boehmer, managing partner at executive search firm Barlow Group in Norwalk, Connecticut.

Boehmer is quick to point out that as ZoomInfo-like services get better, and more companies get comfortable using them, corporate hirers won’t need professional recruiting firms like his to turn up candidates. “It’s commoditizing the front end of what we do,” he says. “Eventually, everyone will know where everyone is and how to get hold of them, so we won’t be able to charge for identifying and contacting candidates.” Search firms will still be valuable for assessing candidates, he contends, though he acknowledges that new e-hiring systems could eventually eat into that end of the business as they get smarter and have more online data to work with.

For that matter, it’s easy to imagine the not-all-that-distant day when online tools make it so easy to find people to fill a specific slot that the notion of permanent jobs becomes irrelevant for many positions. Why hire a manager for years when you can find a new one with exactly the skill set needed for the precise tasks at hand? That’s not necessarily bad for employees: Think of an economy where top employees are constantly being sought out and bid over by companies that recognize them from their Web trails as the perfect short-term solution. And talented employees would be just as smart about whom they choose to work for–using similar services to weed out companies that aren’t good matches for them. You’ll want to treat those people well. If you don’t, and they post that fact online, it could haunt you for a long, long time.

Numbers on the Net

By JOANNA L. OSSINGER

With accounting, taxes, payroll and all the other financial necessities, it’s a wonder small-business owners have any time to do actual business. But some companies are creating online tools to make all that number crunching a bit less time-consuming.

A number of offerings are popping up that give small-business owners quick access to their financial data without a lot of investment in technology.

Sarah Endline, founder of New York chocolate company Sweetriot, says she likes Intuit Inc.’s QuickBooks Online Edition because “everyone [in the company] has access, and it doesn’t matter where we are in the world.” Even on the road, she can take out her computer and “pull up how we’re doing on our numbers.”

On the market since 2000, QuickBooks Online can be set up to show whatever data the business wants to see, and is designed around the simple format of “money in” (such as invoices and sales receipts) and “money out,” (credit-card purchases, cash expenditures, bills). A section for recent transactions can do an overview of all transactions, or just show a particular slice, such as sales. It is also possible to write and print checks, bill customers, set up bank accounts, make deposits, and generate reports such as profit and loss, or sales by customer or product.

To keep its customer data secure, QuickBooks Online reviews its log systems to scan for hackers and other questionable activity, has quarterly security scans by VeriSign Inc., a Mountain View, Calif., online security provider, and offers users the option of controlling the level of security for their own accounts, among other things.

The basic version of QuickBooks Online costs $19.95 a month, but upgrades are available.

Suggestion Box

The product has an online suggestion box where people can make comments and ask for additional product features. A number of people have complained about having to enter credit-card charges and other information by hand. QuickBooks Online says it’s working on these issues. According to Product Manager Kirby Freeman, the company makes weekly updates — usually small tweaks — to the product.

MyBizHomepage.com, based in Middleburg, Va., is an online accounting-reference system that launched last month. It’s a free, ad-supported service that integrates with the widely used non-Web version of QuickBooks accounting software. Registered users can see a financial snapshot of their business each time they visit the Web site. The site pulls key data from users’ Quickbooks files and puts them into an easy-to-read format.

The focus is on five key accounting areas: payables, receivables, cash, cost of goods sold and sales. Chief Executive Pete Justen says small-business owners indicated those areas were most important for them to track in order to keep their businesses going.

Several graphs show trends in the business’s important financial data at the top of the page. The site also can display such functions as stock quotes, news updates, Google search and other features that the user chooses.

It’s All ‘Right There’

Wanda Good, chief executive of temporary-staffing firm Professions in Winchester, Va., says she likes MyBizHomepage because “all the information is right there” on the screen, and she doesn’t have to take the time to run five or six reports to get it. The page makes it easier to see “trouble spots and trends” in her cash flow, Ms. Good says.

Mr. Justen says his inspiration for the Web site came in part from his background in mortgage banking and leveraged-buyout offers — or, as he puts it, “creating efficiencies in highly inefficient markets.” He was bothered by statistics showing that many small businesses close down even when profitable, and he figured if he could create something that would make the accounting easier, it might help relieve some of the burden on the small-business owners.

The site has worked closely with QuickBooks on security issues. “There’s nothing we pull out of your QuickBooks that anyone is interested in except you,” Mr. Justen says, explaining that the software doesn’t do anything with account numbers or credit-card numbers, for instance. MyBizHomepage offers the same security guarantee that QuickBooks offers its users. It uses VeriSign’s secure socket layer, or SSL, technology to preserve the security of data on the Web site. It also has a secure sign-on, as well as other security features typical of online-banking sites.

Audit Trail

SmartOnline.com is another Internet tool that can be used to keep track of finances. One feature keeps an audit trail for each stage of a customer’s transaction. Created by Smart Online Inc., a Durham, N.C., provider of online business applications, the site works mainly through partners to integrate bank services into an accounting product. It charges a subscription fee starting at $10 a month per user, which can increase if customers want to add other applications. The site’s main collaborators are New York-based JPMorgan Chase & Co. and Union Bank of California NA, a unit of San Francisco-based UnionBanCal Corp. SmartOnline.com says it is also in discussions with six more banks about possible partnerships.

At Smart Online, one person is the administrator and has full access to the accounting software. Every other user has a level of access determined by the administrator. Data are backed up regularly, and are housed on redundant servers in case anything happens to the primary server.

The banking function allows users to view deposits, withdrawals, fees and other transactions in their bank accounts, as well as reconcile various accounts. A vendor feature allows users to list their suppliers and include related information such as discounts, credits or debits. It is also possible to view supplier account histories and pay or void bills.

A similar feature for customers shows data on credits and debits, plus recorded and reversed payments. Users also can generate reports showing cash flow, shareholder equity, summaries of figures such as revenue or profit, and lists of banking transactions.

“It’s a product a small business can get into quickly at very low cost,” says SmartOnline.com customer Michael Lindsay, president and CEO of small-business technology-support company C’Bay Technologies in Yorktown, Va. Mr. Lindsay uses Smart Online and recommends it to his clients. He says he likes the fact that his accountant can access the information without having to transfer CDs.

Smart Online works with its bank partners on security. The company says SunGard Data Systems Inc. hosts its data, which are encrypted.

Banks and other financial firms are also expanding online tools that can help small businesses keep track of their money. Bank of America Corp. includes a number of features in its Business 24/7 portfolio, which is designed for businesses with 20 or fewer employees.

Payroll Program

The Business 24/7 suite offers a payroll program, which is free to customers if all payments go to Bank of America accounts. It guarantees that state, federal and local withholdings will be done accurately.

Business 24/7 also has a program that helps business owners obtain a line of credit, allows electronic billing and payment receipts, and can feed right into products such as QuickBooks and Quicken, another Intuit financial software tool. It can even send payment-reminder emails to customers.

To bolster security, the bank uses a special login that uses questions associated with a visual prompt. Also, if a customer is logging in from a computer that hasn’t been used before to access the account, there is a much more rigorous login process, in order to help prevent unauthorized account access.

New York-based American Express Co. offers customized expense-management reports for any credit cards from its OPEN small-business division. It offers different levels of account access, a way to pay bills online, and alerts that can notify a customer when spending thresholds have been reached.

 

The Friendly Face of Business Software

By Sarah Lacy

Last fall, AMR Research analyst Bruce Richardson was sitting on a couch in San Francisco’s Moscone Center during one of Salesforce.com’s many customer conferences thinking about the phenomenon the software company had become. As a scrappy upstart, it took the industry by storm, offering a cheaper and easier to install program to manage sales teams.

Dancing in Richardson’s head was a conversation he just had with the chief information officer of a large industrial company who was planning to ditch Salesforce.com’s (CRM ) software for one of the market leaders, Oracle (ORCL ) or SAP (SAP ). But when he ran into a chatty conference attendee from the same company, he asked her about the CIO’s plans. “Over my dead body,” she exclaimed. It was fierce loyalty unlike anything Richardson had encountered in his 26 years covering business software. In fact, it was downright Apple-esque, he says (see BW, 9/19/05, “An eBay for Business Software”).

Such fierce user loyalty may be the first spoils in a growing design renaissance in business software. The feature wars are over. The new software upstarts have a powerful one-two punch: cheap startup costs and drop-dead ease of use. While much of the attention in the software industry has focused on inexpensive applications that undercut pricey traditional business programs, it’s the new design movement that could prove more important. In fact, it could end up reshaping the user experience across Corporate America.

THE GEEK FACTOR. Forget what the corporate IT department thinks about business software. The actual users will tell you programs like those offered by Salesforce.com may be the first truly intuitive pieces of business software they’ve ever used. “My mom could pick this up in about three or four minutes,” says Chris Corcoran, CEO of Sunset Companies. He’s a customer of NetSuite, another on-demand company that’s getting ready for an Initial Public Offering this year (see BW, 2/13/06, “Giving the Boss the Big Picture”). “Most salespeople will tell you to take their right arm before you take away Salesforce.com,” jokes Kim Niederman, senior vice-president of worldwide sales for Polycom, a Salesforce customer.

To really appreciate the change, consider just how frustrated the buyers of business software had been. Companies spent buckets of money in up-front costs, and then more dough getting that software to work. Even more galling for tech managers is the reality that a lot of people outside of, say, the accounting department, never bother to use the products because they’re too geeky and complicated.

That’s why two big software movements have been gaining steam. The first is on-demand computing, where companies such as Salesforce run the program for the customer, selling use of it over the Internet for a monthly fee. The other big trend is the open-source software movement, where vast communities of coders collaborate to build software that’s freely available online.

POSITIVE IMPRESSIONS. It’s not that all of those open-source contributors are great designers. The key to the appeal is the try-it-before-you-buy-it nature of the open-source movement. When the software works and it’s easy, it catches on fast within companies and quickly builds a grassroots following. Increasingly, open-source designers understand that their audience is counting on them to develop easy-to-use programs.

Take customer relationship management company SugarCRM. It even seeks to provide some entertainment with different “skins” it offers for its interface. Sales people can log client meetings and organize contacts against a backdrop of palm trees or a golf green. “It seems a little silly at first, but they smile the first time they see our application,” says Clint Oram, co-founder of SugarCRM. “That’s an important first impression.” (See BW Online, 10/3/06, “Open Source: Now It’s an Ecosystem.”)

Good design is becoming more than a nice-to-have feature. Thanks to slick Web sites like Amazon.com, people are coming to expect software that takes no or little training to use. In fact, Salesforce’s first prototype bore an intentional resemblance to Amazon.com. The only difference: The tabs were changed from categories such as “Books” and “DVDs” to things like “Contacts” and “Sales Leads.” Says Parker Harris, Salesforce’s co-founder: “We want to get a toe-hold, and once people start using us, we know they’re going to like it. That’s our secret sauce.”

TALENT SHORTAGE. It shouldn’t come as a big surprise that on-demand software is focused on the user experience. The down side of letting customers pay by the month is that they can more easily switch to a rival. So on-demand software providers have to keep their customers happy with uncluttered, user friendly designs that, at least for now, the old guard can’t match.

“SAP and Oracle may be the standards, but if you get something that works, people will hold onto it forever,” Richardson says. Security software company IronPort Systems is one of several who tried to switch from Salesforce and faced a full-on revolt from the rank and file. “We’re stuck,” says CEO Scott Weiss.

That’s a good news/bad news scenario for usability companies such as Adaptive Path in San Francisco. Jesse James Garrett, director of user-experience strategy at Adaptive Path, says his business is booming and it’s near impossible to find good freelancers to bring in to meet all the demand. If they haven’t taken jobs at Google (GOOG ) or Yahoo (YHOO ), they have taken jobs with the new software up and comers.

ALWAYS EVOLVING. A lot of these are consumer-oriented Web sites, but just as many are Web applications aimed at businesses. The talent pool of good designers is getting so dry that venture-capital firm Sierra Ventures has hired Adaptive Path on retainer to consult with startups on usability and design before they even write a line of code — a big departure from the way software is usually crafted.

It’s not just a greater focus on usability. Companies like Salesforce and NetSuite have a natural advantage. Since they host the software, they can track every mouse click, just as an e-commerce site can watch how shoppers navigate the virtual aisles. So user feedback is almost instantaneous. If people are getting stuck, companies can make real-time changes to the site. It’s like the entire user base is in a real time usability lab. “We actually host companies’ Web stores, so we learn how great Web stores work,” says Evan Goldberg founder and chief technology officer of NetSuite.

Such constant tweaking — largely invisible to customers — represents another major difference in the way software is made and maintained. Traditional software companies do one big release every few years, and the upgrades are time-consuming and expensive. Hosted software is more an eternal work in progress. It’s continually updated, based on traditional focus groups and on watching how people use the software.

ADVANTAGE: SMALL FRY. That kind of direct connection struck Todd McKinnon immediately when he became vice-president of development for Salesforce.com. He previously worked for PeopleSoft, now part of Oracle — a company known for its good user interfaces. “At PeopleSoft we couldn’t get a release out in two years,” he says. “Here, we do it every four months, and a day later it’s being used by hundreds of thousands of people.”

Adds usability guru Garrett: “The big guys just handed this advantage to the smaller players.” And, as the overbooked calendars of usability experts show, scrappy upstarts aim to make the most of it.

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