Enterprise software companies find a new target: individual employees

Reston-based Zoomdata debuted software last week that helps companies turn large sets of data into easy-to-understand charts and illustrations, but the upstart has adopted an unconventional sales approach: It won’t be selling directly to the companies it hopes to count as customers.

Instead, chief executive Justin Langseth said, the software is available to download for free on Zoomdata’s Web site and in Apple’s iPad App Store in hopes that people will find the application useful and incorporate it into their work routines.

The tactic isn’t unique to Zoomdata. A small but burgeoning number of technology firms are working their way inside enterprises by getting employees to use their technology individually. It’s a sort of Trojan-horse approach to sales — get inside a company before they realize you’re there.

“We really see that as the model of the future for enterprise software,” Langseth said. “In the past, you would send a sales guy to play golf with the CIO. What we’re seeing right now is software is being adopted from the bottom up.”

The practice can be a challenge to IT managers, who often get the calls when the programs go awry. Some try to ban it altogether, with mixed success.


Catching the big fish with the little ones. (Yarek Waszul for Capital Business)

Still, the sales thesis is championed by San Francisco-based Dropbox, the makers of a file-sharing service with more than 100 million users. The company first made its software available to consumers, who then took it to the office. Now, the firm is selling employers premium versions that offer more features and greater control.

The company hired Kevin Egan, a 10-year veteran of sales and marketing software maker Salesforce.com, at the start of the year to head its formal enterprise sales effort. Employees at 2 million businesses use Dropbox software, he said, each of them presenting a possible entry point into the entire organization.

“We’re almost teaming up with employees within most companies,” Egan said. “They’re approaching the IT leaders and proactively asking for Dropbox within their corporate environment.”

Free vs. paid

But why would a company buy software its employees can download for free? Applications like Dropbox often limit the number of users who can connect, effectively putting a cap on employee collaboration. Paid versions give IT departments more control over how company information is shared.

“It’s keeping their business environment within the context of the company. There’s something in it for both sides,” Egan said. “If I think about my iPhone, I’m taking personal calls and business calls. It’s all the same. We’re blurring it a little bit.”

Indeed, the practice dovetails with another trend reshaping corporate IT departments: employees using their personal smartphones, tablets and other gadgets in the workplace. The “bring your own device” phenomenon has forced companies to reconsider how they purchase and monitor electronic devices.

But those products merely facilitate work. They make it easier and more convenient to carry out business tasks such as e-mail, conference calls, sales pitches and the like.

Software, on the other hand, plays a direct role in the way a company functions. Depending on the application, it may contain sensitive data that could put the company in a compromising position if lost, stolen or otherwise mishandled.

For that reason, software that helps employees with personal productivity, such as tracking expenses or sharing documents, is more likely to be sold to companies via their employees, said Christine Dover, the research director for enterprise applications at IDC, a market research firm.

“It’s certainly not the accounting applications that are getting picked this way,” she said.

The strategy is also not without its pitfalls. Perhaps the most obvious one is that there’s no guarantee the IT department will opt to buy the firm’s software.

Dover said companies may face competition as employees within a single company turn to different software programs for the same purpose.

“The downside is, you may have multiple tools that have been adopted,” she said. “Then the organization needs to pick one and they need to look at what fits into [their] overall culture and overall IT infrastructure, because you still have to integrate it.”

Regardless, Dover expects the nascent trend will continue, particularly as a young generation of tech-savvy workers floods the ranks of the employed. Hunting for software applications that make everyday tasks more simple is their nature, she said.

“Thinking about the younger workforce and the way they’re used to working and playing and learning, they’re used to making their own choices, so I think it’s going to continue,” Dover said.

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries.
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