Enterprise spending used to dictate software trends. But now a new breed of developers that bring such collaborative software as mashups and AJAX into the work force is challenging the established order of enterprise application suppliers. Instead of refreshing an entire Web page, the programming language known as AJAX, or Asynchronous JavaScript plus XML, only refreshes the information that had recently changed, speeding up the loading of Web pages. In consumer applications such as Google Maps and Zillow.com, this sort of constant updating between the server and the user’s computer is now common. Meanwhile, mashups enable anyone with minimal tech skills to create custom applications. Mashups use simple application programming interfaces, or APIs, to combine existing data from disparate sources and develop new standalone products.
In 2003, before consumer mashups were even on the radar, Jonathan Whittle, a principal at Darby Technology Ventures Group LLC, found a software company in Mexico City that had figured out how to update information on a site without refreshing the entire Web page. Whittle thought the technology was interesting and ended up investing an undisclosed amount in a Series A round for AJAX firm JackBe Corp. “We kind of stumbled across JackBe before the world was talking about Web 2.0, and what we were struck by was the simple elegance of the technology,” Whittle says. In November 2005, Darby joined Blue Chip Venture Co. in a $6.5 million Series B. JackBe has since moved its headquarters to Chevy Chase, Md., and counts Citigroup Inc. and McKesson Corp. as customers. While most of these businesses use JackBe’s software to make consumer-facing Web applications run faster, the popularity of AJAX is penetrating deeper. Whittle’s vision includes moving AJAX beyond the user-facing levels of a software program and pushing it into the back end, where integration is more important.
In the past few months, several enterprise software companies using AJAX have received funding, such as San Mateo, Calif.-based Zimbra Inc., developer of a messaging and calendar program, which raised more than $30 million from investors including Benchmark Capital and Redpoint Ventures; Austin, Texas-based FiveRuns Corp., which raised $3 million from Austin Ventures in June; and Chicago-based 37Signals LLC, which took an undisclosed amount from Jeff Bezos, founder and CEO of Amazon.com Inc., in July. Making sure AJAX and other collaborative technologies, such as those used in mashups, can be easily integrated into the back end is what will drive enterprise adoption, says Bruce Cleveland, a general partner with InterWest Partners. He points to InterWest portfolio company Cape Clear Software Inc. as an example of a company that is enabling some of that back-end integration. “Being able to put applications together is the beauty of the Web 2.0 architecture,” Cleveland says. “The problem is they don’t contain some elements that are essential to the enterprise. What happens when I update one application? How will that affect the other?” Finding software companies that can provide some sort of consistency and common framework for addressing those kinds of problems will be important for the growth of AJAX, mashups and other consumer-focused technologies for the enterprise. Cleveland sees a resurgence coming in corporate spending on software as companies begin to embrace the benefits of more open and collaborative software.
Trends such as services-oriented architecture, which aim to bridge differing applications running across an enterprise, and software as a service will make it easier to make user-friendly software for the enterprise. It’s the search for usability that led Steve Smith, CEO of FiveRuns, to create a systems management software package that uses AJAX to keep load times down and users happy. “The systems management arena has been stagnant for the last decade, and the core functionality has been a stone-ax-and-club type of technology that has not kept up. And so the user suffers,” Smith says. He points to companies like 37Signals that are using AJAX and other technologies to make life easier on the user as an inspiration for his company’s systems management software for small to medium-sized businesses. He decided to go after that market because those businesses still had a couple hundred servers that need managing, but the big players such as IBM Corp. and BMC Software Inc. weren’t there. Other firms like Zimbra, whose product is taking direct aim at programs like Microsoft Corp.’s Outlook, believe that the time has come for monolithic enterprise software platforms to go the way of the dinosaur. Already, Zimbra counts tax giant H&R Block Inc. as one of its corporate users, and John Robb, vice president of marketing, says more will come. “The goal is to get applications to talk to each other so we can move out of the model of buying a truckload of IT products from a single vendor and move to a model where people can buy best-of-breed applications and expect them to be open and transparent,” Robb says.