It wasn't until rather recently that a broad swath traditional businesses started to be challenged at their very core by the realities of social business, a set of relatively new concepts that are both embodied by and taken from social media that seemed to imply great changes in the way we work, think, and live.

Admittedly, old media and software -- to hold up two industries almost instantly impacted by the global Internet -- were particularly disrupted early on, by social media and open source respectively, in such a profound way that they no longer look nearly anything like they once did. In sharp contrast to these two examples, most other industries just didn't witness anywhere near the same dramatic threat to their own business models for well over a decade.

However, that now finally seems to be changing. The next-generation digital business seems to have arrived in scale. With the advent of a potent new generation of high-velocity online startups aimed much more deliberately at reformulating the basis of what many types of traditional businesses do, the revolution originally entailed by social business does appear to be happening, but not quite as envisioned.

While it was initially believed that existing market leaders could simply convert their own leadership position in the old economy into a similar one in the new digital economy, it increasingly looks like it will instead be led by digital upstarts that are now pushing the boundaries of just about every traditional type of industry and market niche. And fortunately or unfortunately, depending on who you ask, very few classical enterprises seem to be involved this revolution.

The Collaborative Economy: A social business revolution

How exactly is this happening and where? One of the most complete conceptions of how this is currently taking place was recently synthesized by well-known Altimeter analyst Jeremiah Owyang, who has dubbed this next new digital/social revolution the 'Collaborative Economy.'

The basic idea of the Collaborative Economy, like so many major shifts, is actually pretty simple: The world has started moving beyond the simple mass sharing of ideas and media over the Internet. Instead, we have now begun sharing products and services directly with each other en masse using the same social media principles. Owyang believes, and early evidence is starting to support, that this will be much more disruptive than the first wave of social media was.

In his new report, Corporations Must Join the Collaborative Economy, he notes:

Social technologies radically disrupted communications, marketing, and customer care. With these same technologies, customers now buy products once and share them with each other. Beyond business functions, the Collaborative Economy impacts core business models.

He goes on to observe that traditional enterprises don't have to stand idly by and wait for startups to empower the marketplace to meet its own needs:

Companies risk becoming disintermediated by customers who connect with each other. The Collaborative Economy Value Chain illustrates how companies can rethink their business models [DH: my emphasis] by becoming a Company-as-a-Service, Motivating a Marketplace, or Providing a Platform

A typical example of a high impact Collaborative Economy startup is Airbnb, the well-known site where anyone can rent out spare rooms or empty houses for anyone else to use, without the need for an intermediary business that provides the physical facilities. As a clear shot across the bow of the hospitality industry, Airbnb will provide on a peak day placements for up to 200,000 people per night. In comparison, the global hotel megachain Hilton has only 600,000 rooms as noted Thomas L. Friedmen in a recent column about this phenomenon. Thus the size of some of these new startups is now starting to challenge traditional market leaders, often bending or breaking local laws, customs, and regulations along the way, which were never designed for the social business era.

Other examples abound in many industries including transportation (Uber, Lyft), finance (LendingClub), workforce (oDesk), dining (Feastly), corporate real estate (LiquidSpace, ShareDesk), shopping (Yerdle), venture capital (Kickstarter), and countless others, of which these are just a tiny but representative sample.

The real point is that in-the-large it appears to be a broad demographic digital business trend. Owyang's research pegs the current value of the Collaborative Economy at $26 billion today, with other data showing it growing overall at a 25% year-over-year rate. Plotted forward five or ten years, and it is evident that the Collaborative Economy will become a major portion of the world economy sooner or later, and very probably the former.

Part of the reason that the timing appears to be right for these big ideas is that in a consumption-based society we individually now posses so much in terms of usable resources, and yet they are also typically quite underutilized. The sharing economy reaches directly into this vast and largely untapped stored value that consumers now control by helping them make much better use of what they have.

The implications of all this in terms of efficiency, reuse, environmental impact, productivity, value creation, and other important economic, social, and civic factors are potentially enormous. The corollary, however, may be that there is much less room in the economy for traditional businesses which tend to be much less resource-rich, innovative, or cost effective by comparison. In short, they may simply not compete strongly in the collaborative economy, because of a much more labor and resource-intensive legacy approach to meeting market needs.

Much has been made over the extremely rapid change in today's technological landscape, and how slowly companies are adapting to it. For example, well-known data shows that the average lifespan of an S&P 500 company has plummeted from 75 years in 1937 to just 15 years today, and has continued to drop steadily. Part of this is an indictment of how poorly companies have been absorbing new technology in a way that is fundamentally useful to the future of their business. The other obstacle to change is the sheer residual value of following the dying path they are on. In other words, the Innovator's Dilemma for the digital era.

As John Hagel and John Seely Brown were recently quoted in the Wall Street Journal, there are two overarching trends that are pressuring businesses in the digital age where location doesn't matter and market share is a relentlessly zero sum game of who has the biggest ecosystem:

There are two dominant narratives about the institutional changes we are experiencing and neither one of them gives anyone much respite: The first is that companies will fragment to smaller and smaller entities and even down to individual providers; the second is a winner take all world where only the largest survive. We believe that both of these narratives are too simplistic. We see a world where both of these narratives co-exist and are mutually reinforcing rather than conflicting. Scale and fragmentation interact in a symbiotic relationship where the growth of each is what drives the growth of the other.

What are corporations to do in response?

While the track record of companies in making the transition to the world of social business has been a checkered one, I've long identified incremental success stories here. In speaking with Owyang about the emergence and threat of the Collaborative Economy to the industrial age generation of companies, I have challenged him on what the prescription is to successfully transform. Unfortunately, though he too believes it can be done by some, but not by all, the road ahead is as varied as the company and industry. But looking at the few success stories there are (and there are some), these key points stand out as the corporate mindset needed to transition successfully to social business:

• Don't compete with your customers, cooperate with them. Easier said that done in terms of corporate culture, but when Collaborative Economy startups are pitting millions of your own customers against you, there's no reason that companies can't decide to play the exact same economic card, at least while there's still some time.
• Design for change, give up non-essential control, and learn the power laws of networks. Networked social businesses focus on cultivating communities, fostering co-creation, and optimizing shared value, wherever it lies, instead of just creating and selling things. These are also the core skills of Collaborative Economy startups.
• Rethink the structure and processes of your organization to transition gently but swiftly to a social business. How organizations are resources and operate dynamically is very different in the social economy, learn the rules and way forward.

Naturally, this is just a high-level set of factors for changing with the economic times and facing fast-moving new competitors using a very new rule set. The reality will likely be grittier, more challenging, and surprising to the typical classical industrial age business.

Yet, the greater the changes taking place in the marketplace, then the greater the opportunity. The message here is that it's probably later for your industry than you think. Most businesses will have to learn innovative and effective ways to adapt to the Collaborative Economy in order to survive and thrive, even in the medium term. Fom a customer and corporate perspective both, that may not at all be a bad thing.

Each enterprise collaboration platform is presented along with their mobile clients. Whenever possible, their relative popularity in terms of user ratings either in the App Store or Google Play is given, something which is a useful gauge on how easy they are to use, especially in terms of stability and frequency of update from the vendors.

These players cover the gamut from enterprise social networks (ESNs), to some form of content or document management system with social features, and/or an intranet/portal platform. Most of the options presented here offer a range of these capabilties but almost all of them focus primarily in one area or the other.

Finally, based on the e-mail I recieved from the original post, there's a lot of interest in taking a look at the 2nd tier of options, since innovation in collaboration seems to be continuing unabated and new entries emerge all the time. I will be assembling this list soon and posting it here. You can use my feedback form to submit any entries you'd like to see included.

Platforms included in this gallery are Box, Citrix Podio, Cisco WebEx Social, IBM Connections, Jive Social Business Platform, Microsoft SharePoint and Yammer, Salesforce Chatter, and SAP Jam.

You can start viewing the gallery here.

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Though well-reviewed options like Infragistic's SharePlus exist on both iOS and Android.

Though well-reviewed options like Infragistic's SharePlus exist on both iOS and Android.

Nowadays, the cloud version of enterprise collaboration platforms often takes the front seat. Social capabilities are now usually developed natively from the ground up, using the latest concepts in social business. And entirely new product categories have taken up the social collaboration mantle, from unified communication to file syncing. Native mobile clients are still in the process of catching up but are improving swiftly.

That said, although I've been steadily inundated with announcements of many new enterprise collaboration tools and services in just the last year alone, for strategic usage by large enterprises only a short list of credible, capable contenders has managed to emerge.  Some of these are well known, while others are mostly familiar to the enterprise customer.

Thus, given the always shifting landscape, I'm regularly asked who the top players are in enterprise social collaboration. The list below is probably as complete as any, given that there are countless niche players and offerings that either have strong feature sets or best-in-class functions, yet are also unlikely to have the resources or skills to support the many detailed needs of large customers any time soon.

Such needs often include extensive customizability for specific business scenarios, deep integration with existing back-end systems, and the ability to support roll-outs that span dozens of countries and legal geographies, with the complex management, administration, security, and governance requirements this inevitably entails.

However, before we explore the today's enterprise collaboration landscape, I'd be remiss in not pointing out that having made a vendor/product decision is actually as far as one could be from making said choice successful in a given organization. In fact, the top success factors for a new collaborative technology are typically not technology concerns at all.

For example, much has been made of the likely underperformance of a particularly high-profile type of collaboration tool -- enterprise social networks (ESNs) -- if rollout is conducted without the requisite supporting behavioral, cultural, and process changes. We forget at our peril that collaboration is a fundamentally human activity. This implies that any use of enabling technology without taking into account how people actually conduct their work, their inclinations to share information and interact with each other, and in particular how the proposed technology will empower them and alter their collaborative behavior for the better/worse, is bound to disappoint.

That said, workforce collaboration can be greatly boosted by the right enabling technology that 1) effectively collapses time and distance, 2) lays down clear digital pathways that improve team-based outcomes, and 3) makes the right information and people eminently easy to find wherever and whenever work gets done in the organization. While technology alignment with the rest of the organization is always desirable, in reality, the solution that provides the lowest friction and highest enablement of collaboration has the most business value in my experience.

Maturity, Social, Mobile, and Cloud Today's Collaboration Focus

So with that out of the way, let's focus on the offerings. Here are the top players today -- in alphabetical order by vendor -- based on my personal experience in what clients are currently focusing on in their product evaluations and comparisons. Please note this list is anecdotal and not exhaustive, but I believe it covers the majority of the big players in the space today. I'd also observe that there is a distinct tendency of the large established companies to buy up the small collaboration vendors once they have any measure of success, so buyer beware.

Box. One of the better funded enterprise collaborative startups, this comparatively recent pure play cloud offering focuses on files as the center of the collaborative experience. Offering content management and online workspaces, Box offers many different ways of interacting with files while offering the enterprise-grade security that IT departments insist on these days. Mobile access is very good with apps on iOS and Android devices. Box also offers off-the-shelf integration with Google Apps, Salesforce, and NetSuite, as well as an open API for custom integration needs. Box has had a great ride over the last couple of years and has rapidly becoming one of the standards for enterprise file-based collaboration in the cloud.

Citrix Podio. Lesser known than many of the big marquees in the enterprise collaboration space, Citrix has long made a name for itself with a variety of communication and network-based solutions for enterprises. Podio is a workspace-based collaboration environment that emphasizes project management, along with all the usual social networking features. CRM, recruiting, and event management are also core use cases. Like some of the other top offerings, Podio has an app store where businesses can find and select templates for other types of collaborative business processes. Vitally, Podio also allows collaboration to occur across the firewall with customers and business partners, a hot emerging capability that lets companies access some of the highest value collaborative scenarios. The Podio mobile app is one of the most highly rated enterprise collaboration clients in the iOS App store. One of Podio's big strengths is Citrix's extensive experience with cloud and enterprise networks, but the company has its work cut out for it to grow beyond existing Citrix customers.

Cisco WebEx Social. The enterprise social network formerly-known-as Quad has recently been renamed, but remains one of the most comprehensive available, with rich support for communities, e-mail, and content management. WebEx Social also stands out from the pack with strong support for and integration with unified communications. It also has some of the strongest mobile capabilities overall. While Cisco has clearly been challenged in arriving later in the game than some of its top competitors, it remains one of the more compelling offerings, though like Podio, it's much more likely to be found at committed Cisco customers than elsewhere, for now.

IBM Connections. At this point probably the pre-eminent grande dame of enterprise collaboration, IBM Connections has gone through a long process of evolution and maturity to arrive today as a shoe-in on the short list of almost any major enterprise collaboration selection effort. IBM Connections goes well beyond the basic enterprise social network and offers full-fledged integration with the entire collaborative experience, from e-mail and content management to unified communication and all the standard office productivity suites. Connections offers the extended feature set you'd expect from one of the most mature and advanced enterprise collaboration suites available including social analytics, intranet integration, and APIs. As you'd expect, mobile support is excellent as well. The sheer size and technology footprint of Connections might be daunting for anyone but the large enterprise, but then again, Connections is about as capable as enterprise collaboration tools come these today.

Jive Social Business Platform. The largest player in the top-end of the space that is purely dedicated to enterprise social networks, Jive has carved out a sizeable and respectable niche with large customers and others that appreciate its refined and sophisticated offering. Built from the ground up for social, the Jive social platform plays in the usual strategic areas while also emphasizing what few of the others do: A deliberate focus on structured business outcomes in CRM, customer care, and employee engagement. Jive has an app store with a growing number of applications to make it possible to engage in many kinds of work activity right in the collaborative environment. The platform also has strong integration features, a growing set of gamification capabilities, and increasingly sophisticated mobile apps.

Microsoft SharePoint & Yammer. In SharePoint, Microsoft has the largest presence of any collaborative tool in the enterprise, except possibly e-mail, where it also is a top player. However, SharePoint has long been a platform for document management, and as such has been slow to evolve the latest collaborative features involving social networking, file syncing, and lightweight messaging. While it can be augmented with platforms like Newsgator, which add many of these 'missing' capabilities, Microsoft acquired Yammer last year as a solution to address some of these shortcomings on its own. While Microsoft has recently published quite a bit of information on how it intends to reconcile and integrate the two platforms, both of which have extensive market penetration, the jury is out on exactly how effective the effort will ultimately be. That said, most companies already have one or both platforms and any enterprise collaboration strategy has to be clear on how these are involved, or not. That said, both are strong platforms for their core competencies, though mobile support for SharePoint remains quite poor, and Yammer is still lacking in enterprise sophistication. Cloud support for SharePoint is being offered through Office 365, while Yammer has long been a cloud native and has very good mobile support.

Salesforce Chatter. The social features added to Salesforce in the form of its Chatter platform were intended as a path towards creating a Facebook for the enterprise, at least originally. Chatter has a strong presence in the marketplace and I occasionally hear from IT managers that are feeling pressure from their sales teams to deploy the product more broadly. Chatter began as a functional but basic enterprise social network in the cloud in its first incarnation, to a much stronger contender more recently with the release of Chatter Communities which allows employees, partners, and customers to collaborate together, a key use case as I noted above. Chatter has a growing range of social networking capabilities, including workflow support, IM, file sharing, and smart conversation filters. Capable mobile clients are available as well.

SAP Jam. A tough one to decide to incorporate on this list, SAP Jam is the newest entrant on this list, which I covered in detail here last October. Yet I believe it's one that many organizations will at least consider, given its pedigree, ambition, and support from one of the companies that most understands social when it comes to applying to their business (I profiled the impressive SAP Community Network as the opening case study of my recent book on social business.) In addition to the usual offerings, SAP Jam includes pre-designed situated solutions for high value business use cases in marketing, sales, HR, customer care, and others.

How To Choose A Collaborative Platform: Meet Business Needs

Given the growing number of good choices at a wide variety of price points and feature sets, I see most selection efforts for enterprise collaboration solutions ultimately employ one of two lenses to make the choice:

1) A desired set of target features that's believed to be desired within the organization such as document sharing, microblogging, news feeds, file syncing, or mobile knowledge access, along with supporting technical capabilities like application integration, search, administration consoles, and governance features.

2) A more abstract set of business requirements selected to address a list of long-standing functional challenges like poor collaboration, better access to knowledge, reducing travel costs, or speeding up business processes.

In today's BYOD and BYOA world, workers can easily access the apps that meet their point needs, even if it fragments the information landscape of the enterprise. However the latter of the two lenses above is a perspective from which businesses can still have the most impact by bringing in technology solutions that solve specific and ongoing issues for a broad swath of the business.

However, having participated in a number of enterprise collaboration platform showdowns over the years, I can attest to this: Having a clear understanding of a) how your workers will actually use the tools, b) maximizing their impact through deliberate design thinking when it comes to enabling key features, and then c) testing the tools under these conditions is the only way to have a good chance to find the right fit. Otherwise employees will increasingly self-serve with the countess free and easy-to-use applications they find that really solve their problems.

After all, recent data show that the top enterprise collaboration tool today may actually be Facebook, based on real-world usage. I continue to encounter HR managers who have found it's hard work to stop this without a compelling alternative. Instead, companies are likely far better off investing real time in finding the solutions that truly meet their workers needs for collaboration while creating the right strategic changes to the business to make success likely. Then, and only then, driving adoption in a far more receptive and effective environment.

Related Reading:

The new digital customer journey: Cross-channel, mobile, social, self-service, and engaged

All together now: cloud collaboration, social and docs

The convergence of mobile and social: The next IT battleground

Not coincidentally, open standards have also been absolutely instrumental to the success of the Internet itself, making it possible for you to read this very piece on any device of your own choosing, running any operating system, any browser, on any network connected to the Internet.  As long as they follow the open standards that underpin the Web, that is.

I've long been following the story of open standards and social media, one of the most meandering standardization stories I'm aware of, from early initiatives like DataPortability.org and OpenID to the raft of social standards contenders that had emerged by 2010. The reasons for this are varied, but basically boil down to the highly competitive nature of the big public social networks, a poor understanding of the utility of IT standards by many enterprise social media practitioners, and frankly, a limited comprehension by the industry of what we actually needed in the early years.

To be clear, the benefits of open standards are potentially quite considerable: All our data would be open in any social network, we could export our contacts and conversations whenever we want, we could easily find knowledge anywhere it lies any social system, and innovative new social tools would be easier to adopt because they talk to everything else already (and I do mean everything, since standards like OpenSocial mean even all our applications are integrated into the social fabric.)

If this is so great -- and it's hard to argue a convincing countercase -- then why hasn't it happened? As I pointed out earlier this week, companies already feel like social media is steadily encircling them, service by service, app by app. But making this rapidly growing portfolio of social tools talk together, securing them, and ensuring they are compliant with global regulations and laws is extremely challenging. In other words, social media needs to be a single medium that can be treated one way for all our concerns, not an increasingly fragmented collection of them.

And frankly, another big reason standards adoption has been slow is that digital networks have slightly different rules for success than other ecosystems. One of them is that already successful social networks can easily be tapped by new ones to grow, at least if they're open past a certain point. In other words, the services with the people in them already often don't want to be connected to the services that don't have them, no matter how good it might be for their users. To them, it can sometimes seem like a matter of survival not to support standards.

Social business standards: We're the beneficiaries

There are also other reasons open standards for social business haven't taken off, but in the end they just don't matter that much. That's because there's a very important piece missing, and that piece is end-user demand for standards and interoperability. Unfortunately, we have only to look in the mirror for why this is the case. We are not requiring our providers of social media to support them, and especially, to enable them in a way that provides us the value we seek. This locks us in and forces us to lose control of our own information. We've forgotten the priceless lessons of the 1990s when application providers were routinely turned down by companies if they didn't support standards. And it may even be too late to change this.

Today the network effect of Facebook, Twitter, LinkedIn, and the whole host of other services is so large that they can't really be ignored. Your companies and employees must use them, because everyone else does. And to be fair, almost all social network services, both consumer and corporate, support some of the open standards that are now common in social media: OpenSocial, Open Graph, Activity Streams, and to a lesser extent Pubsubhubbub, Portable Contacts, and the Salmon Protocol, to name some of the top candidates.

However, for all these reasons, there simply isn't critical mass in the social media industry today around open standards. Worse, there's no consensus on how best to use them to achieve the larger benefits that are possible. Back in the era of blogs and wikis, we all had control of our own social media platforms. Certainly, the Web itself wouldn't exist if we hadn't defined and defended the standards that make it up. Nowadays, commercial providers provide everything in the cloud, including our friends and data, largely using their own technologies. This has led to the fragmented silos and social apps that increasingly isolate our digital activities into parochial conversational islands within our businesses and across the Web.

There's also good news though: There is a chance the horse may not be all the way out of the barn. If we are proactively as an industry, we might be able to better define and position open standards for social business, identifying the problem and the solutions we want to address with enough clarity that we can create consensus, and from there, achieve effective action.

The W3C and OpenSocial: Joining forces on open standards

While this has been tried a few times before, we now see that leading social business standards groups believe there is enough maturity and understanding of what we really need in both consumer and enterprise social media to come together as an industry to sort it out. Thus, I'm pleased to announce that the W3C, the prestigious group that created the standards that underpin and make the Web work, and the OpenSocial Foundation (of which I'm an invited industry expert board member) have come together and are trying to achieve these goals, which namely are the following:

• OpenSocial Foundation and W3C are combining forces to attempt to create a next generation of social standards.
• The intent is to describe a social business architecture to make sense of the currently heavily fragmented standards landscape around social media.
• It will have an emphasis on HTML5, making social media a "first-class" part of the underpinnings of the Web itself, something only the W3C has the credibility to do.
• Ensure that it's grounded in real needs, the effort is use-case driven, with major vendors (IBM, SAP, Ford Motors, etc.) and start-ups (Crushpath) supporting.

To begin this work, the W3C and OpenSocial Foundation are hosting a two-day workshop in San Francisco this August, graciously sponsored by AppFusions. This effort is open to all that would like to participate. Titled the Workshop on Social Standards: The Future of Business, those that would like to get involved should submit a position paper by the new deadline, July 8th. Details can be found on the workshop event site.

I've repeatedly made the case for fundamental open standards in social business, as well as more sophisticated 'higher-order' standards over the years. Some of these have certainly arrived, both formal and de facto. Some vendor and end-user adoption has occurred. Now we are getting closer to the day when social media may be far more standardized, automatically interoperable, and under our full control.

However, and I can't emphasize this enough, it's up to us to make this happen by understanding how much is at stake (the future of the Social Web) and educating our colleagues and vendors. I am excited and hopeful that two top governing bodies have finally joined forces to see if the time is right to take open social business standards to the next level. I'll continue to follow this story closely as it unfolds and report back as I can. Meanwhile, it's your chance to learn and get involved.

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Are social silos holding back business results?

Is the social networking monoculture ready to crumble?

Much has been made recently of the liklihood of first couple of generations of internal social networking efforts to fall by the wayside, with Gartner recently noting that up to 80% of them won't survive. Fortunately, this isn't exactly unusual for a major enterprise-wide initiative that ushers in major change: Well over ten years after they were introduced, ERP projects are still reporting substantial failure rates, with 60% of them creating less than half the expected benefits, according to the latest data from my ZDNet colleague Michael Krigsman.

With outcomes like this, there's no question that social business (defined here as the application of social media to the enterprise) is currently in the trough of disillusionment, even as more companies report success with the methods than ever before. In fact, nearly two-thirds of companies currently use social media to engage with customers and 49 percent to advertise, according to Stanford's 2012 Social Media Survey. What's more, internal social networks are on target to be key elements of the workplace experience in most enterprises by 2016.

So what gives here? Is social business a success now, or will it be successful in the near future, or will it all move on to a new revolution? These are the crucial questions that IT and business leaders would reasonably like to know before they commit their budgets, people, time, and reputation on what is by many accounts the future of digital engagement.

Unfortunately, like so many things in today's world, the answer is somewhat nuanced. To fully understand where we are, we need take a very brief tour of online history.

Social networks: The new walled gardens?

We've gone through at least three significant, large-scale revolutions in the communications landscape in the last 20 years:

The first was the arrival of global e-mail on a single network (the Internet), the first time that anyone who was connected online could send a message to literally anyone else, at least if you had their e-mail address. Instant messaging, texting, and other point-to-point technologies -- also requiring that you unambiguously identify the target of your messages up front -- soon joined in as well. Communcation was now global and largely frictionless, but it was also closed to discovery and new participants. Their conversations also didn't scale well.

The second big revolution was the initial foray into early forms of social media, such as blogs and wikis. These had several unique attributes: They were asynchronous and much more scalable than e-mail/texting/iM, and you didn't have to identify your audience beforehand. Anyone could communicate with everyone automatically, provided they had information that people wanted to know about (not coincidentally open participation is the root principle of social business.) Blogs and wikis were adopted broadly, but not as widely as e-mail at first. Interestingly, blogs were hosted as individual Web sites, and connected via syndication protocols like RSS. Perhaps most significantly in hindsight, syndication allowed these decenralized conversations to be found and linked together, no matter what social media platform or service they used underneath. The key point here: Virtually all blogs played nice and were interoperable with the blogosphere.

The third revolution was arrival of commercial social networks like MySpace, LinkedIn, Facebook, Twitter, and many others in the consumer world and the recent maturity of corporate social networks like IBM Connections, Jive, Yammer, Chatter, Tibbr, and numerous others. These all offered up social profiles with lists of personal connections and provided bustling activity streams that made the social experience 1) seamless to use and centralized in one place, 2) largely conversation and content-oriented, and 3) organized around one's connections/followers.

However, with the arrival of commercial services, came the return of the dreaded walled garden from the early Internet era. Social networks were in vigorous competition for members, and interoperability was often considered a great way to create an exit ramp of traffic. As a result -- and probably to our considerable detriment -- interoperability between virtually all popular social networks is quite limited today, being fraught with commercial, political, and technological issues.  On the other hand, because of their reach, utility, ease-of-use, and intrinsically higher network effect, these social networking services also became enormously successful and are now more popular than e-mail or any other form of online activity.

Poor social interoperability a growing barrier to ROI

In retrospect, it's clear that the cultural divide between traditional business methods and social media was wider than virtually everyone anticipated at first. Nevertheless, the world population has recently gone through a great upheaval in terms of its communication behaviors and inclinations. We are far more digital, social, and mobile in general in our personal lives and the workplace than even just three years ago.

So the cultural barriers to social business are increasingly well understood and are receding steadily (if slowly) as a major issue. So too are the early adoption issues, as I covered in last year's list of social business success stories. The biggest obstacles to social business are increasingly being solved, at least apparently.

However, we see a growing body of evidence that now confirm what I predicted in my 2013 predictions for enterprise social media:

Social fragmentation and silos will vex social media strategists more than ever before.

Recent studies by McKinsey & Company (see chart on how fully networked organizations outperform), the Social Business Council, and seemingly disconnected data points such as Facebook becoming the top enterprise collaboration tool by worker preference, all appear to point to the same thing:

Only when the barriers between our social silos are torn down will we realize the full potential of social business.

We've managed to erect countless partitions -- much more than we could ever need to protect privacy or corporate information -- between all the social tools we've put in place or acquired through departmental projects and consumerization. These days, I continue to speak with organizations that find themselves surrounded by social media. They find they are employing a vast panorama of socia media, including microblogs, internal social networks, customer communities, social CRM initiatives, Twitter/Facebook accounts, social marketing experiences, LinkedIn groups, SharePoint sites, rogue wikis, and much more, all of which cannot talk to each other, or easily find/use/share each other's content. (Yes, there are a few bridges between some of these channels, but they are inadequate and poorly adopted.) This regularly breaks business processes, creating analysis paralysis (which tools/channel for the job?), and more.

While e-mail is an antiquated technology that has hardly improved in 20 years and creates closed conversation, it has -- like the Web itself -- one signature advantage: It's part of a single, flat system. Thus, our parochial patchwork of social silos is starting to impact useful communication and hold back effective engagement in the same way older network technologies do.

It's clear that to get to the next level of performance, we're going to have to address this situation. Respected organizations like the Open Group certainly recognize the problem. And the scale of the issue will just as certainly require bold action in order to work.

How will this happen then? I've gone on record that it may be the adoption of effective open standards that returns social networks to fundamental interoperabilty. But will commercial services adopt them? Their executives and shareholders are likely not to agree.  Are there other solutions? Possibly. Either way, if social media is to progress to the plateau of productivity, we must figure this out.

I'll be exploring this topic in more detail in the near future. I welcome your comments below on how we can resolve this as an industry.

Related: Social media will ultimately permeate the enterprise.

There have been suggestions that organizations now need C-level officers focused on everything from corporate data and customer experience to digital strategy and social media. 

Or at least that's what they're likely to write, based on current trends today. For instance, bring-your-own-device (BYOD) programs -- and now bring-your-own-apps (BYOA) -- are the proverbial canaries in the coal mine for these trends. They have empowered vast new digital armies of workers in the trenches, with a large majority (80%+) of organizations adopting BYOD, and many now exploring BYOA, in just the last two years alone. At the same time, other purviews within our organizations have become core investors in high technology, with CMO budgets reported to eclipse IT itself in 3 years due to this factor. Perhaps most significantly, sober voices are now saying that shadow IT (meaning technology not under the control of the CIO) is expected to reach 90% of all enterprise IT spend by the end of this decade, up from just 10-20% a decade ago.

Clearly big changes are afoot, but where they'll finally end up is a bit harder to surmise. As indicated above, the root causes are many and varied. However, the overall digitization of 1) market/customer engagement and 2) corporate sources of revenue -- along with the digital transition/integration of our companys' products and services themselves -- are the most significant and impactful factors driving change.

As this has played out so far, everyone's budget is rapidly becoming the "real" IT budget. This democratization of IT has had significant organizational implications as digital transformation fundamentally remakes our organizations. Or at least the ones that manage to adapt to the current uber-connected, deeply integrated, data-fueled, app-centric, highly mobile, customer-focused, and socially engaged state of the global marketplace.

Thus, most companies have become increasingly misaligned with today's fast-moving new market conditions and they generally know it.

One of the ramifications of this is that the C-suite is consciously attempting to evolve in reaction to the growing digitization of business. There have been many discussions of late about what this should entail, including suggestions that organizations now need C-level officers focused on everything from corporate data and customer experience to digital strategy and social media.  Probably the two new roles most frequently discussed at the moment are a Chief Digital Officer (CDO) and a Chief Customer Officer (CCO), both of whom would impact the CIOs and CMOs of most organizations in a non-trivial partitioning of roles, resources, and responsibilities.

But just as companies generally don't have a Chief Marketplace Officer or Chief Channel Officer, the strategic concern here really isn't about the general business landscape or digital plumbing, but about the people in it and the data that concerns them. And this is where companies are moving slower, even if they just maintain their current pace of adoption. That's because digital innovation in-the-large has only continued to accelerate. The rate of change is increasing and companies response to it isn't: On a daily basis, several thousand new mobile apps become available, while on a broader horizon the amount of data our businesses must respond to doubles at least every 1-2 years. So too are the methods through which we have to engage with and respond to our customers. The deltas on every front look similar.

The key qualities challenging our management of technology today are therefore fragmentation, velocity, variety, volume. These are the obstacles our organizations currently face in scale across our delivery channels, products/services, constituents, revenue sources, and management time, though there are certainly viable strategies to address some of them.

Related: A new reality between the CMO and CIO.

More digital leadership or more digital decentralization?

So what are organizations going to do about the rise of digital and challenes it brings? What then is the best route to adapt the structure of our organizations, from the management team on down, to better define, adapt to, and seize the generational opportunity of realizing a successful digital strategy in a highly social, mobile, etc. world?

There seem to be two broad approaches, one top down and other bottom-up:

• New C-level digital leadership will be adopted. Strategic digital leadership will move to a new Chief Digital Officer in many organizations. Up to 25% of large enterprises will have a CDO by 2015. Between them, the digital experience for the customer will be split between a new Chief Customer Officer and the CMO.  This will essentially double the number of senior executives focusing on digital transition and channels, though it will still likely not make a dent in the actual adoption of new digital technology across the organization as social media and mobility in particular reinvent what it means to be connected to and engaged with the market. The data boom caused by the increasing domination of these new channels will be the second immediate issue that the CDO and CCO will have to address.
• Digital adoption will be enabled broadly across the organization. BYOD and BYOA programs are just the first wave, as organizations realize that to keep up with technology change they need to restructure everything from enterprise architecture to business strategy for near-constant evolution. This means flattening and greatly expanding who is empowered to apply new technology to the business, while providing ground rules to make it safe and secure. That this will happen is now largely a forgone conclusion given the growth in shadow IT in just the last couple of years, brought to forefront via empowering self-service sources like app stores, which have become the IT department of choice for a growing number of workers.

The reality is that organizations will do both of these things: Add more C-level executive oversight to digital while they also attempt to broaden their technology adoption base internally on the ground (making everyone part of the IT department, essentially, just like everyone is part of the social media team.) While this might have been somewhat controversial even a year or two ago, it's now clear that this is the likely route for most companies, even as they have to vigorously compete with many digital startups trying to displace them with a purer and more savvy approach not hindered by their legacy constraints.

The next half-decade will be very interesting indeed as digital strategy steadily moves from the 2nd tier to the top tier of management concern.

Related:

Is it time for a C-level social media executive?

CxO Talk guest Hinchcliffe proclaims, 'IT is dead'

The new digital customer journey: Cross-channel, mobile, social, self-service, and engaged

This fragmentation of customer touchpoints cuts across marketing, sales, customer service, and even product development. In short, customers have moved to the digital world en masse, and companies have not kept up. Yes, it's true that most businesses currently realize they need to evolve. They know they must acquire suite of capable mobile apps, an effective strategy for connecting with consumers in social media, a workable plan for inbound search, and a good way to stay connected with consumers so they can build strong, long-term relationships, instead of merely engage in still-vital yet far less strategic point transactions.

At this point, you may ask -- given that it's often hard to pin down the big shifts in society and culture until after they happen -- what exactly is the imperative for companies to shift from transactions to engagement? For example, in my recent post on the strategic value of customer communities, I highlighted data that shows that customers engaged socially typically results in double digit gains in revenue. More importantly, strategic relationships both online and offline tend to be a zero-sum game. You typically only need one most-valuable business partner for a given function, if they understand your needs and cater to them. In this way, deep digital engagement is the future.

Yet the historical vagaries of how companies have applied technology to the customer relationship has meant that solutions have long been channel-centric, instead of customer-centric. While the majority of companies certainly do have modern call centers, social media marketing plans, e-mail campaigns, a mobile app strategy, an SEO policy, and so on, they are frequently unsynchronized and siloed. It's also highly likely these channels are also not monitored well and fall far short of the participation levels required to achieve ROI. They are also usually not mapped well to the customer experience or the company's overall digital strategy, despite the importance of doing so.

In fact, given the amount of communications and engagement technology most companies now have, it's entirely too common today for customers to have to figure out who to contact at a company to get something done. In many companies I encounter, there is often little connection across the marketing teams, sales teams, to the customer care team, each of which have to little context from others, outside of a few electronic customer records, and with little deliberate plan for how the customer should travel between them.

Just as challenging, new digital channels are accumulating faster than many companies can integrate them into their customer experience. New social networks, mobile devices, app stores, online touchpoints like fan sites, customer communities, Facebook pages, Twitter accounts, etc. seem to emerge on a weekly basis.  If that wasn't enough, customers are more ready to interact than ever before, further creating challenges of scale: Even if a company could integrate a new digital engagement channel into their efforts, these new venues are far more two-way. Customers expect a meaningful response to their attempts to connect with the companies they are interested in or otherwise desire involvement.

So this is the opportunity and the challenge combined: Engaged customers generate more revenue and stay more involved with the companies that respond in kind. Yet it's very challenging to meet their demands for engagement without fundamentally changing the rules of how companies connect with them. Interestingly, there are also growing indications, such as with packaged foods giant Kellogs recently, that digital approaches such as location-aware apps can actually help unify disparate channels, such as offline in-store presence with mobile applications for instance.

While there are a few excellent examples of robust, broad-spectrum cross-channel digital engagement that we can point to (Nike springs to mind, as does SAP, and even recently United Airlines has made much-needed leaps in the right direction), most companies are struggling mightily with the 1) fast-changing customer engagement landscape, 2) internally siloed customer functions, and 3) the often-profound transformation of organization, process, and culture required to properly engage in today's new digital, open, transparent and two-way customer channels.

Related: Gartner: CIOs and CMOs must 'turn sparks into flame'

Planning journeys is useful, but addressing unmet needs has the impact

There is already plenty of advice for companies trying to up their game when it comes to a more modernized customer journey. Almost all of them are being told to map the new journey out in detail, which can indeed define and communicate a useful "to be" end state for the company to rally around.

Personally, I find that defining clear objectives makes this exercise have the most value. What then should companies use as an organizing imperative for such efforts? Fortunately, customers too have similar challenges to company's today: Life is getting more complex, not less. And this gives us some easy targets to start focusing on as we increase integration between digital touchpoints, which customer experience experts like Ernan Roman are suggesting should be the focus:

• Solve a problem. Make a pain point go away, such as seamlessly conveying the current status of orders in any desired channel, or providing an innovative new way to participate in the co-design of a new product or service. Or perhaps do what T-mobile recently did, and use cues in social media to pro-actively engage with customers to save the relationship.
• Make life simpler. Remove the time, effort, and/or friction the customer has in engaging with you. I frequently make the point that companies tend to think of the customer experience in silos, where they are the only partner to the customer, which couldn't be further from the truth. Many smart next-generation companies are surrounding the old guard using concierge services and aggregators to give customers what they really want: Simple ways of accessing information and controlling their lives. Fortunately, taking customer engagement strategy up a level so that companies consider the whole contextual customer experience, as strategically important as it is, is just one useful way of simplifying the customer experience.
• Engage the customer. The core of the problem companies have in onboarding new digital channels such as social media, is that customers will then expect the company to respond and participate in conversations. And engagement at scale is one of the hardest things for companies to do as they are organized today, despite plenty of studies confirming the significant value in doing so. Remove the barriers to doing engaging in scale and make it a success by supplying tools and proactive organizational policiies to orchestrate advocates (employee, partner, and customer) to do the work whenever possible.

The one thing that is ultimately untenable is ignoring customer needs. And although many large companies are making strides in all of these areas, it also seems clear that smart new industry entrants are rewiring their customers' journey for the old guard, disintermediating them or otherwise dislocating their customer experiences in the process. Good examples of this include taxi service app Uber and financial services aggregation firm Mint, to name just two of many startups providing customers the experiences they really want using the underlying assets of other traditional businesses. This then is the real long-term existential threat of not understanding the full journey your customers want to take, and then being sure to provide it for them.

Related: A new reality between the CMO and CIO

Exactly why this is the case has various causes. These range from companies awkwardly adapting to social media and using it like a traditional one-way marketing channel in order to push out unwanted messages to the fact that people typically participate in social networks for more personal, non-business reasons. Yet, that 4 percent still represents a vast audience of many millions of engaged individuals, and there are no doubt millions more who would engage with businesses if there was a compelling reason why, and a good way to do it.

I also believe these figures almost certainly under-represent the leading minority of organizations — the stand-out success stories like SAP, American Express, and Pitney Bowes — that are in fact connecting productively today with their customers and other constituents via social media and online communities.

Most of this is not actually news. The challenges of adapting social media to the classical enterprise are manifest and well known at this point, yet the benefits in doing so continue to become clearer, even as the current data consistently shows that far from giving up, more companies are continuing to gear up to organize for social business.

For its own sake, the motivation for businesses to gather their stakeholders around them in digital communities is increasingly clear cut as the data on outcomes continues to improve. For instance, a major study conducted last year concluded that revenue from customers that are engaged in a company's community is 19 percent higher on average than from those that aren't. Big companies have apparently received the message on this: The same study also found that half of the top 100 brands already had customer communities in some form. If that weren't enough, IDC recently found that online communities are the clear number one area of interest this year for businesses in general when it comes to social media.

The value of a customer community has finally percolated to the executive level, as well: The value of forging strategic digital relationships with customers is now in the forefront of management thinking today. In a typical example of what business leadership is hearing about now, Bill Lee observed on the Harvard Business Review site recently that building communities is where one of the largest reservoirs of untapped value lies. The goal: Holding one's customers closely, and then harnessing the considerable opportunities for making proactive use of their creativity and bandwidth, cultivating closer and more sustained ties with the company, enabling peer-produced customer care, and providing recognition and status, among other benefits. Lee also noted:

[With customer communities] your prospective customers and buyers increasingly learn about you from their peers — including your current customers — while tending more and more to ignore traditional sales and marketing communications from corporate. Companies are now taking advantage of this new marketing reality, becoming more skilled at getting their customers to advocate for them, create peer influence in their markets, and make important contributions in areas like product development and services.

But companies have to either tap into existing communities or build their own. And, at this point, with available social media attention reaching saturation — as with all things digital — is there actually room for new companies to establish their own communities? Or has the window closed on major new efforts, as most industries already have a market-leading community?

To answer that question, we need to look at some basics for what it takes to create a successful customer community.

Related: Should companies drive their traffic to Facebook?

Is it really too late to start a customer community?

Now that companies have been building close relationships with their customers in social media and online communities for a while now, my research has shown several key traits that are generally required to be successful.

The first is commitment, both in active participation from business units — but especially from senior executives — who will stand behind it and provide the needed resources, often for years, in order to see the community flourish. One of the best examples is SAP Community Network's 2.5 million engaged customers/partners, so too is Intuit's millions of Live Community participants, both of which have been around for many years and are considered strategic assets by their organizations.

Second is a vibrant community itself, a voluble mix of customers, business partners, employees, company executives, and other interested parties. Sustaining a community over the years requires active investment in community management, as well as the regular (some would say constant) co-creation of valuable and otherwise hard-to-obtain shared knowledge, experience, wisdom, and other types of content. All of these are necessary to have a "there" there, and keep the community flowing, growing, and evolving.

While there are more, these top two success factors — when taken together — have an important implication for customer communities in a given industry, even for high-affiliation brands: They create what is known in the digital world as a network effect. This basically says that the larger and more successful a community gets, it becomes intrinsically richer and more valuable exponentially through the sheer sum of its members and their combined participation. In other words, network effects — and therefore social networks — tend to be a zero sum game; if a potential new community member has limited time, and we all do, why go to the second-best community, when you can just go to the very best one for the subjects one cares about?

While I'm in the process of mapping out the online communities for top industries including financial services, manufacturing, healthcare, public sector, IT, legal, and so on — and, yes, I plan to share that breakdown here soon — it's clear that in each industry, and often in sub-sectors, there is a definitive leader with most of the other customer communities being either nascent, very niche, or outright struggling. Analogous to the famous Civil War saying, it seems that when it comes to customer communities in a given industry, "whoever gets there first with the most people wins".

Although this doesn't seem to hold when it comes to a few truly exceptional and stand-out brands, it does seem to hold for most companies. In other words, if your competitor is years ahead of you in cultivating customer communities, you can certainly create your own, but even your customers are probably deeply involved in the ones that exist already, as they're currently the most exciting place to talk about your industry and engage with those with similar professional interests.

For some industries, the window of opportunity is still ajar

The corollary, however, is interesting; namely, that if your competitors have not yet gotten very far, there's still time to not only start, but even gain the lead. I see that entire industries typically get the community bug at about the same time. Someone proves that it works, and then everyone jumps in. We've seen this in the technology industry, media, financial services, professional services, crowd funding, and many other areas. However, I find that there are still a few whitespaces open.

But the overall trend is clear. The window is increasingly closed in industries where customer communities have become fairly mature. However, it's still open in some others, but won't be for long. Enterprises that want to establish the upper hand and build an uncatchable community network effort have perhaps a year or two. After that, it will be increasingly hard to play a winning game. And an important game it's becoming, too.

Those that control and wield the primary digital/social relationships with customers in a given industry are clearly slated to become the anointed winners.

There are many interesting implications to this, in terms of what many would otherwise consider anti-competitive behavior, as well as what it means for the future of how business fundamentally gets done.

There's another important decision point that we can't forget, as well. Looking back on how organizations have engaged with the social world, a broad pattern has emerged: You can either go to existing social environments and find ways to connect with your constituents there, following the rules and other constraints you find there, or you can create your own digital communities. I would observe that in the winning stories I've seen, almost entirely, they've taken the right path in the diagram above, creating the communities themselves from the platform up, and owning the data, relationships, and customer experience. Facebook, Twitter, and LinkedIn are important social channels and the key components to customer engagement today, but they're usually not viable customer communities at a strategic level.

In short, if you build it first/best, and give them a good reason to come, they will.

Related story

• Realizing social business: Enterprise community success stories

In contrast, IT is still looked at largely as an overhead expense, something to be contained and reduced, even as digital business has finally experienced a modest renaissance in the last few years as a direct driver of revenue and competitive advantage. Nevertheless, IT spending will be up globally by 4.2 percent in 2013, as companies tackle tablets, big data, enterprise software upgrades, and improved networks.

If you think these look mostly like infrastructure investments, however, then you'd be right. The reality is that the strategic use of information technology for growing and transforming the business is frequently not led by IT today. In fact, that's what the CMO budget growth data point purports to show: That marketing has now become a top consumer of IT in most large organizations.

What's more, beyond the increasingly rapid cycle times of today's online world, and the broad demographic shift of consumers to mobile and social channels, the cloud has become a principle enabler of IT liberation by unleashing a tsunami of on-demand services that can be quickly spun up by non-experts to meet business demand. These are new online services that manage customer relationships, deliver cross-channel marketing experiences, orchestrate digital advertising, and help business users react to the volumes of data that result from these activities to drive operations and support executive decision making.

This is creating a distinct sense of overlap and a blur of corporate responsibility as CMOs evaluate, acquire, and field extensive new IT capabilities for digital advertising, customer experience management, CRM, and other related functions across a growing set of touch points, which now include at a bare minimum traditional media, online media, social media, and mobile devices. A decade ago, much of the service delivery for these functions would be delegated under the CIO, who would support the marketing department and other groups in their IT endeavors as needed (although largely on IT's schedule). Now, as my ZDNet colleague Paul Greenberg recently observed, "marketing is at the forefront of strategic technology investment".

But as I noted just over a year ago in my analysis of the five big IT trends for the next half decade, CIOs themselves are largely not trying to get ahead of this curve. In fact, they are on a largely evolutionary technology road map, and frequently eschew the pursuit of breakthroughs that will give their companies major advantage. Why? Because their traditional role of developing infrastructure and keeping it operating (and manageable and secure) tends to make them risk adverse and focused on business continuity.

Taken as a whole, this inclination to avoid risk, combined with: 1) the growth of application backlogs created by years of constrained budget; 2) a parochial vision of IT as a central function; and 3) compelling new business solutions pouring into organizations from mobile app stores and cloud/SaaS, has resulted in a tremendous volume of pent-up IT demand that simply can't be met through a traditional IT approach.

These tensions have led inexorably to widespread consumeration. Bring your own devices (BYOD) and bring your own apps (BYOA) are the norm today, as business users take the technology reigns into their own hands. This also means that as we enter the era of deep engagement, the marketing department is uniquely positioned to be the internal business leader in managing the technologies on the boundary between our companies and the rest of the world. The CMO thus has both the mandate and the urgent requirement to enable digital engagement in a way that no other group does, and the ready capability to do it without much help from IT.

How will CMOs and CIOs reconcile today's shifting responsibilities?

I've attempted to describe the realignment and overlap in the work that CMOs and CIOs now both do in the visual shown above. It's clear from this that each function has some strengths over the other in certain areas: IT is better at operations, cost efficiency, and managing exceptions. Marketing is much better at customer experience, using data for business decisions, and moving quickly to seize a perceived market advantage. Some might quibble at whether IT is really better at innovation, but each function clearly has abilities in all of the areas listed, and the edge still goes to IT departments in my opinion. When they want to, anyway.

What's disturbing, however, is that it's clear from this view how much overlap there truly is today between the CMO and CIO. Another key indicator: I've noted previously that I've encountered a growing number of people with the title of CIO of marketing in recent months, showing how marketing departments are staffing up on their own senior IT executives in a quest to better execute on their mandate.

From these trends and others, I predict a couple of significant shifts in many organizations in the next few years to better respond to the evident blurring and overlap of who is in charge of leading technology within the business:

1. Many CIOs will become the chief infrastructure officer. They will be responsible for networks, data storage, devices, and security. They will not be as directly in charge of digital business or technology innovation in the line of business. They will largely not be leading digital innovation.

2. Strategic IT innovation will come from technology-savvy digital natives in the lines of business. These largely seem to be up-and-comers willing to take risks and upset the status quo. They have less to lose and more ability to think outside the box of the local IT bureaucracy. These will build next-generation digital business products and services, transformative new customer experiences, well-integrated cross-channel data-driven marketing solutions, and more that makes the fundamental assumption that agility, innovation, actionable data science, and deep customer engagement are an imperative to grow the business and outmanoeuvre competitors. They will be directly aided and abetted by on-demand cloud solutions in all their forms.

These two shifts won't always be the case in every organization, but I currently believe both of them will represent the broad trend as IT appears ready to separate into centralized infrastructure and decentralized innovation. This will be good for our businesses, good for IT (which is frequently lambasted for slow business leadership), and will overcome what my friend and colleague Michael Krigsman calls the primary "conflicting goals" of IT leadership today.

I'd note that we've also seen this conflict in enterprise architecture and elsewhere in recent years as a combined innovation and infrastructure mandate appear to have hampered the healthy growth and evolution of our organizations.

I believe that we can already see this shift happening today and CMO and CIOs will largely be better off, if they can agree on workable basic rules of engagement. This is likely to look like IT making what the marketing department does secure, safe, and governed, while the CMO tries out the latest new idea quickly and inexpensively. It's a brave new world that seems to be happening because of the pervasiveness of the cloud. It will be a vital set of changes for all of us to watch closely.

Related stories

• The convergence of mobile and social: The next IT battleground

The latest round of discussion about social business and the results so far (or those same found wanting by some estimates) seems to have been triggered by our own Larry Dignan, who recently summarized a discussion that happened last week on the Enterprise Irregulars mailing list:

The gist goes like this:

• The social enterprise is about culture, management, and process. It's not about software

• If that culture and process point sounds familiar, that's because social software may be ERP in a new wrapper. ERP software changed companies fundamentally, but also led to spectacular IT disasters, largely due to people, process, and culture. Social with business process integration won't work

• Internal collaboration also creates social mojo. Collaboration goes well beyond software and, frankly, is difficult.

Now what? Like most technologies, social is following a familiar path. First there's the argument that the software will change everything. Then there's the realization that the latest tech won't magically cure your enterprise. Then there's the blowback. Quietly---and just as everyone writes it off---something else comes along as an enabler. The social enterprise may follow a similar route, but for now, it's disillusionment time.

This led to a flurry of follow on posts, including one from respected industry thinker and veteran of many IT revolutions, Vinnie Mirchandani, whose--some would say healthy--skepticism about social in the enterprise has matured over the years:

Internal social has been somewhat disappointing the last few years. As I have written often, the Enterprise 2.0 category has been long on volume and short on value. But if you look beyond vendor happy talk, and see what creative companies are doing, there is definite reason for hope. GE has used the Facebook app, BranchOut, and LinkedIn to cut out headhunting fees for the majority of its 25,000 openings. That's real payback. Toyota has extended social to the Internet of Things by using Salesforce Chatter as its platform that connects its electric vehicles, customers, and dealers. Both the GE and Toyota use cases are being applied in a number of other industries.

External social is far more exciting, though not necessarily for the software tools. As I saw during the Republican convention last year, my city enjoyed an impressive improvement in positive perceptions. Larger brands are similarly expecting their agencies to do much of the social monitoring. The role of an agency is expanding as companies try complex campaigns across "all three screens," and print, and physical world.

...

Lots of exciting social, high payback stuff is being done by many customers. It would be a mistake to use quarterly results of software vendors to give up on social.

While these encouraging statements might be considered damning the social enterprise with faint praise, coming from Vinnie, this is almost certainly honest accolades, considering the source. These and others posts prompted IDC analyst and blogger Michael Fauscette to presumptively ask "Is social business dead?", noting:

Have businesses given [social media] a good go and, finding no value, are they abandoning their efforts? Okay, right up front here, let me say clearly, social for business is not only not dead, it's thriving and delivering lots of value to businesses! In fact, I believe that the changes associated with social business are absolutely critical for businesses in the information age if they want to attract and retain the best employees and partners, and if they want to meet the expectations of their customers. In our last social business survey conducted Summer 2012, we found that 67 percent of North American businesses were already using some social tools for business, up from 42 percent the prior year. So if that's true, why all the doom and gloom predictions?

Well, frankly, all of this is fairly standard fare, even discounting the fact that bloggers like to express their opinions, particularly if they're contrary.

Social business: A multi-billion dollar industry

However, the last question is worth answering this time: Why the doom and gloom predictions? Certainly, it's a growing and relatively healthy new technology industry, looking at the gross numbers, which say it will be a $4.6 billion industry within the next two years.

In fact, from my most recent summary of the adoption and usage stats for social media by enterprises, the numbers on their surface tell a very different story, seemingly confirming that the gap between business and consumer use of social media isn't exactly a chasm:

• Two-thirds of businesses are now using social technology for marketing and related functions; 37 percent expect social media to be used regularly across their entire business; 9 percent expect it to be fully integrated--AIIM Report 2012

• 79 percent of companies use, or are imminently planning to use, social media. Neary half of the companies who were rated as "effective" in social media said it was integral to their firms' strategy--Harvard Business Review Analytics Services

• 59 percent of companies use social media to engage with customers, 49 percent to advertise, and 35 percent to research customers; 30 percent use social media to research competitors and new products. Half, however, collect no data from social media--Stanford Business  2012 Social Media Survey.

On the heels of all of this information and prognostication is Gartner's latest finding, that by 2016, most large enterprises will have an enterprise social network, even as executive leadership and an overly technology focus often hurt current efforts:

Through 2015, 80 percent of social business efforts will not achieve the intended benefits due to inadequate leadership and an overemphasis on technology, even as enterprise social networks become the primary communication channels for noticing, deciding, or acting on information relevant to carrying out work.

By 2016, 50 percent of large organizations will have internal Facebook-like social networks, and 30 percent of these will be considered as essential as email and telephones are today. The leaders of social business initiatives need to shift their emphasis away from deciding which technology to implement and focus on identifying how social initiatives will improve work practices for both individual contributors and managers.

But if social business has a rocky road, it's because of the very different paradigm it entails from previous technology revolutions, even if the overall progression actually doesn't look that much different from earlier advantages. Part of this is often claimed to be due to the "pull" nature of social media, which means that the medium is used in a very different way than more transactional, non-emergent technology such as ERP, CRM, etc.

It should be noted that traditional enterprise IT often hasn't fared very well, even in its maturity, with ERP projects posted disappointing results in a surprisingly large percentage of cases, even in recent years according to Michael Krigsman. Yet reports of the death of ERP aren't common.

So which is the blame for the rocky road the social business has sometimes taken? The unique intrinsic aspects of social media, especially when compared to previous communication revolutions? Or is it merely the traditional parade of the hype cycle, with its inherent progression of education, disruption, maturity, and reconciliation?

The truth is, social media is indeed a very different creature from many of the technology revolutions that have come before. In particular, the public nature of social data, which often makes it quite challenging for entire industries to embrace, is the sharp end of the disruptive iceberg. In the end, however, the cultural, managment, and process issues are the long pole. As a result, for many organizations, the sheer competitive advantage may be the only reason they will be required to travel the rocky road of social business transformation at all.

Related stories:

• Enterprises grapple with social engagement

• Will social media ultimately permeate the enterprise?

Perhaps the most important uniqueness of social media itself is that the interaction within it is done entirely in public. These online conversations, which are "out out in the open", goes directly to the heart of the magic of the format. Of particular note is the ability to use social data to achieve what were formerly impossible -- or just very expensive -- yet vital business and civic objectives.

The public nature of social media conversations is also leading to increasingly thorny -- and urgent -- debates both within industries and at a national level about who actually owns all of this knowledge, what it can legitimately be used for, and who ultimately controls it.

Yet, despite the challenges, it's clear that social media is inexorably seeping into more and more of what businesses do every day. People praise, complain about, research, question, and seek help from companies around the clock by the millions via social media. Unfortunately, it's almost as obvious that many organizations are poorly prepared to think about and act on the significant competitive possibilities social media promises, all while a small cadre of leading organizations appear to be running ahead and divvying up the landscape.

To explore this latter topic in particular, I attended Oracle CloudWorld in Los Angeles earlier this week as a speaker, as well as to listen to those in attendance.  It's ever more clear to me, from talking with other attendees and in other recent discussions, that the business world is not noticeably accelerating in the same way that the digital world is: In fact, it's falling behind, and badly in some cases as we'll see.

Customer experience management and digital engagement are the umbrella topics -- and buzzphrases du jour as ZDNet's own Paul Greenberg recently pointed out -- that are all the rage today when it comes to external digital strategy.  But the simple truth is that most organizations are stuck in isolated silos when it comes to their marketing, sales, business development, and customer support processes.  Each silo looks at a fragment of the customer journey, have their competencies in that area -- and aren't structured, much less optimized to handle a social customer -- who nimbly moves back and forth across all of these functions over time and doesn't understand the uncoordinated morass they find.

And it's meeting the needs of the notional social customer which is the ultimate objective here, who only cares about the nature and quality of the relationship they have with the businesses they work with, and not how the company is (often poorly) organized to work with them. In short, developing more effective systems of digital engagement will be the broad objective of the next half-decade.

While it remains to be seen how the growing gap between how the market wants to communicate and how businesses work will actually impact companies, though the data also shows that those that don't keep up are paying an increasingly high price as well.

So let's look at what was said at CloudWorld on getting our businesses ready for these changes.

Social will be "everywhere, anywhere" you need it

At Cloudworld, famed social media thought leader Charlene Li of Altimeter opened up the day by walking the audience through her current thinking on social:

Without cloud, social would not be possible. It's not just convergence of people, but data and the content, data and the connections, they create among themselves and their companies.

We know that social media is much more than just Facebook. It's odd that we have to go to a certain place, a location, in order to be social. Social is so much more.

My theme for the enterprise is this: Social will be like air. It will be everywhere and anywhere you need it to be. To optimize its potential, we need to integrate it.

But key to understanding what organizations need to do about increasingly pervasive social media depends on their understanding of their place on the maturity curve, said Li. She enumerated the six steps of social business maturity as 1) Planning, 2) Presence, 3) Engagement, 4) Formalized, 5) Strategic & 6) Transformation, where most organizations are generally at step two right now.

While many business are still at a fairly low level of maturity with social, the devices, mobile apps, and social networks that people are using are leaving vast data trails across an ever-more fragmented set of channels, said Li. Today's new digital touchpoints are changing the relationships that companies have with customers from being "transient, transactional, occasional, and impersonal" to being "long-term, two-way, constant, and much more authentic".  The quite different customer relationship that's emerging with leading brands that have embraced social does have a considerable learning curve, even if it also confers substantial value including higher customer loyalty, satisfaction, and yes, also very real bottom line benefits.

But the real issue with achieving ROI with social, said Li, is that social strategies are often disconnected from what's important to the organization:

They simply have no clear business impact. What's your business goal with Facebook, LinkedIn? I hear people say, "We want more fans, subscribers."

How does that help you move your strategic business goals forward?

I personally think that Li's take on social was the right one: That companies must determine where they are on the maturity curve, and lay the ground work for the next step. Then focus their efforts on updating their business processes and functions to by more social and better connected in a way that improves meaningful outcomes.

What was perhaps most surprising during the session, was when she asked if anyone in the audience had managed to map out their new customer experience. Almost no one raised their hand in the entire ballroom.  Clearly, most organizations, reeling from various and competing impacts of consumerization, cloud, mobile, and social, are having a difficult time navigating the waters of today's rapid technology changes.

Related: Sizing up social business for 2012

Lessons learned from social business initiatives

My talk, later in the day, focused on how the customer journey is changing with the advent of widespread use of big data, social media, cloud, and smart mobility.  While I've explored recently how the customer journey is changing (and predicted a critical mass of companies will take the plunge in revamping their end of it this year), I find that the hard-won lessons of companies that have largely succeeded in their attempts are the most valuable for others to build on.

From my research over the last year, and which I presented at CloudWorld, organizations which had the best results in changing how they engage with the marketplace via new digital channels typically discovered the following:

• The customer journey is being truly reinvented, often in ways we don’t expect. Moving CRM to self-service mobile apps, using customers to co-create customer care, applying social analytics to find the highest value new customers, and using advocates develop and amplify social marketing are all examples of how CEM is evolving in new and innovative ways.
• Successful transformation requires a significant commitment to reach useful ROI levels. Like BASF and CEMEX, two excellent examples of businesses that made large-scale transformations to social last year, each spent a lot of time and effort obtain buy-in broadly across the company, fostering executive leadership, and connecting their enterprise social networks to the actual work of the business itself. Each went well beyond just acquiring a social toolset and assuming the rest takes care of itself on its own.
• You can’t be social all by yourself. The network must do most of it. The fundamental principle of social business is anyone can participate. The best efforts tap deeply into this and leverage social networks to create and deliver the value.
• The social business efforts that succeeded clearly laid a strong foundation for change. Social business transformation means setting the expectation that long-standing ways of working will have to be fundamentally rethought. This means not just expecting innovation, but seeking it out quickly, and then validating it. And most important, setting this expectation with with workers, partners, and customers. This most significantly includes investing in culture change.
• Skills for social & cloud governance as well as data science are the most lacking. People with these talents will remain in short supply through 2013, so organizations must cultivate the skills internally or wait to acquire them externally.
• Changing our thinking is the hard part. You can't buy software and suddenly be a social business. You have to disrupt long held assumptions. Changing ourselves is maybe the hardest part.
• Rarely are the people operating our existing business the ones that will create the next version of them. But the former is unlikely to let go of the reins lightly without a stake in the new model. Yet becoming more social often means some disruption of the old guard.
• Tracking the right measures and feeding those measures back into the change processes creates the most impact. Using big data technologies with social media has already shown major promise. More and more success stories I've encountered recently use them as an integral part of their operations.

The challenge for organization's today is learning a very new discipline (social business, in the parlance) -- namely actually connecting and working with the marketplace via digital channels at scale -- all the while the technology changes keep on coming, faster than they can usually be aborbed using traditional IT approaches. As I've observed before, this pace will be untenable in many organizations until they figure out the hard lessons required to change the way they apply digital broadly to their lines of business.

Related: 2013 predictions for enterprise social media

One significant obstacle stands out at this point: The lack of social media familiarity and expertise in organizations at a management level. It's now clear that this has kept social media at arm's length for too long. A Harvard Business Review column this week observed as much:

Too many companies have kept social platforms separate from their essential businesses.

A closely related issue is that the discipline still represents a very different way of working than many organizations are used to. But whatever the issues, and there are good many, the organizations I've spoken with in the last year now seem to realize the social world isn't going away any time soon. Many of them are now making plans accordingly.

Such plans must take much into account today: The galaxy of products and social media services that exist today, the many competing strategies and techniques that organiations can use -- and even the endless parade of social networks themselves -- have led many an organization directly towards analysis paralysis. Many have been content to wait for the pioneers to take the arrows for them and just copy what works. Fortunately, some of the leading organizational trends we are seeing today are focusing much more operationally and practically than ever before. in particular, as a primary objective, attempting to create actionable order out of the social media chaos. The move from the part-time social media committee to the fully staffed social media command center is a prime example of this evolution.

In fact, many enterprises are now busy reorganizing their social media efforts to scale them up, make them have greater impact, and to address what seems to otherwise be an unsustainable pace of technological change. The goal largely remains the same as ever: To capitalize on the rich potential that many organizations feel they're not yet reaching with social. This usually means ways to better connect with their primary stakeholders (workers, customers, partners) in the new channels of communication to which many of us have moved, while also tapping into more effective ways of working and creating mutual value there.

There's good news in our social business journey as well: The tools, platforms, strategies, and techniques of social business are at their highest level of maturity ever, even though that's not always saying much in emerging areas such as social analytics, the shift of social to mobile devices, and the rise of line-of-business integration. Despite this -- and actually, because of these advances specifically -- we're going to see a high-water mark in 2013 as organizations put social in the center of the way they operate like never before. This is not a supposition, but trends based on what some top companies currently have planned this year. I'll try to cite them as we go along below.

Eleven Predictions for Social Business in 2013

Last week I summarized the major trends in social business in 2012. Now it's time to take a look at what's on tap for this year. Here are eleven of the most significant areas of interest for enterprises as they seek to better adapt to social media and become more effective at creating significant value with it.

1. Companies will begin full integration of social media across the customer experience. While this started in earnest last year, we'll see companies begin updates to their entire customer experience, with social as a key aspect and equal citizen with other touchpoints, such as phone, Web presence, mobile apps, etc. What will really set this apart this year is that companies will use social media to conduct primary activites, including marketing to prospects, closing sales, supporting customers, gathering new product ideas, and even improving their supply chain. That this will happen widely will be greatly assisted by the fact that many major enterprise line-of-business applications have recently added social media capabilities to the way they work.
2. Social media will become subsumed into regular business applications. One of the bigger trends in social software recently has been "connectors" to bridge social media with existing business applications. Need to connect a community around a MS Office document? That's easy to do now in most enterprise social networks. It's the same with content/document management, marketing automation, customer care solutions, business intelligence tools, and more. In 2013, many enterprises will understand how these work, get better at turning these connectors on, and make them available to workers. In addition, updates to traditional business applications will continue to add more social networking features (often through social media startups they've acquired) that allow improved collaboration and sharing. In other words, regular software will become noticeably more social this year as well.
3. Social marketing and social CRM will grow substantially but remained siloed, for now. These two areas in external social business have been particularly successful in recent years. But even as social media encourages a consistent and self-guided customer journey across marketing, sales, customer care, and product development, this is something that the internal fiefdoms of enterprises are still struggling to support (marketing is usually completely disconnected from customer care in most businesses, for instance.) Despite successes in some areas -- and even though the very best marketing is often terrific (and widely-observable) customer service -- these two areas will only begin moving towards each other this year. The rise of mobility may be the Great Unifier here. I've predicted before than mobile is the wildcard that will bring these two functions together, as most companies will typically have one primary app they use to engage customers with, including marketing and customer care.
4. Large companies will begin creating and moving to strategic engagement platforms. According to recent data from Gartner, companies realize that having sustained relationships with their customers in digital channels is a top priority. They are now building communities, mobile apps, and other enivornments in which to maintain long-term customer relationships. A great example is Chevrolet's new 'Find New Roads' effort, which is an attempt to create a strategic way to engage with customers over the next decade. The development of powerful new consumer engagement platforms as a strategic corporate asset will be a growing priority in 2013.
5. Data scientists will become the top hire on social media teams, with community managers and social architects vying for the 2nd spot. Pretty much the hottest job in tech last year was the burgeoning information jockey whose job is to make sense of the vast pools of Big Data companies have been accumulating in recent years. Social media is one of the greatest sources of information in this regard, but it's also useless without someone to craft usable lenses into it. Enter the rise of data scientists, the lack of which was one of my Big Data predictions for last year which came poignantly true. Cultivating thiss skill wil be big in 2013. Community managers and social architects will also be urgent hires in many firms in 2013, but good ones will also be in particularly short supply.
6. Social media will become a leading source of business intelligence. While this has been the subject of countless predictions in the last several years, it'll finally become mainstream in 2013 as the tools and skills get ready for prime time. Everything from real estate to finance and just about every other industry will be affected by the real-time views into what's vital and will change the art of the possible. See my gallery of the 10 major examples of the ways that social media and big data are already making this happen today in many industries.
7. The fusion of mobile/social will continue to be a major challenge. Making social media an effective and enjoyable experience on mobile devices such as phones and tablets, particularly for business uses, is still in its infancy. While some companies are rolling their own branded social/mobile apps, I currently expect that enterprise social softare vendors will do most of the work ultimately. They will even make significant progress this year. However, I also estimate they will still not achieve parity with their consumer app cousins in 2013, which in turn are usually still not as good as their Web native counterparts in general. But investment here will be critical given the broad demographic shifts to mobile. Enterprises must continue to put pressure on their vendors to bring their mobile experiences for social apps up to with parity with other service delivery channels.
8. Social fragmentation and silos will vex social media strategists more than ever before. Sometimes it feels like we have too many social networks, too many apps, too many digital identities. All of these will make it hard to manage, govern, and secure social media for many businesses, much less take take advantage of them at scale. The fragmentation helps perpetuate so-called "dark social", where it's hard to see what's actually going on. And the issue will only get worse as everything becomes more social. While the top social networks will have continuity and presence across touchpoints as they are used as the "connective tissue" between individual Web sites, business applications, and other media, enterprises will still be looking at solutions to unify identity, social activity, social apps, and social data in order to keep it under control. For now, be prepard to manage a few top level identities and a bunch of smaller ones at an employee level. Fortunately, unified enterprise identity management for the closely-related arena of SaaS and cloud services is getting much better. It may in fact end up offering a partial solution for enterprise social identity as well. In the meantime, concerted efforts to sort out social silos and address them proactively and comprehensively will help for the short-term.
9. The limits of internal-only social media will be increasingly felt. More integrated, outward-inclusive, and holistic strategies will emerge. The evidence is mounting that internal-only social media sharply limits what's possible and often leads to adoption ceilings of 30% or so, as workers are limited in who they can actually collaborate with, leaving them for tools with more reach. Many companies I spoke with this year were interested in broading their definition of engagement and creating environments to more broadly connect their stakeholders, wherever they are. Leading social business products from companies like Salesforce, IBM, and Jive have all added features fairly recently to enable cross boundary social engagement (worker to customer, for example), and these will actually be used more broadly than ever before in 2013.
10. Open standards for social media will continue to reflect the needs of startups, not enterprises. I've been bullish for enterprise social media standards such as OpenSocial in the past. With the W3C gearing up to get serious about the vital topic of social business standards this year, we'll see if we can reconcile the two worlds of consumer and enterprise social media, the former which tends to drive most of the conversation on the topic of standadrds. Many companies have forgotten how hard it was to achieve what the IT industry did with open standards in years past or the great advantages it brought us as businesses. The conversation will get interesting again this year, but will not definitely sort itself out. However, I urge all enterprises should get their say in, or be left behind as startups create even more de facto standards that very likely will not serve the unique needs of our businesses.
11. Security and compliance for social media becomes a significant industry in its own right. Many industries have a hard time participating in social media at all. Financial services, insurance, legal, and health care are good examples of these, but really, all public companies often face severe restrictions on what they can do, which in turns sharply limits the benefits of social media that they can access. Global firms have even more challenges as they face an incredibly complex patchwork of local, regional, and national laws on social media usage and customer privacy around the world. This has led to a cottage industry of startups to help sort it all out and provide a safety net under which companies can be assured they are following laws and regulations. I'm tracking more and more entrants into the space and we'll see the industry grow enormously to make it easier and safer for enterprises to engage in social media in its many forms. The availability of such capabilities will help move social business forward greatly this year.

Of course, a great deal more than what's on this list will actually happen in 2013, including a number of things we can't yet imagine. For example, I suspect we've not seen the end of the social media uprising meme (see Mashable for a great list of the particularly historic ones in 2011). Many think this is increasingly leading up to a Corporate Spring. However, if the behavioral data on consumerization is even close, this is already under way as workers use the tools they choose and pay for to communicate and collaborate.

However, the move to social media this year will not in fact be revolutionary for most organizations, it will simply be practical necessity. As I like to say, a billion people have changed their communication and interpersonal habits over the last four years. Companies can ignore this for perhaps a bit longer in some cases, but not if they want to stay relevant or healthy. It's going to be an exciting year for social business all around, not just because much of the hype has receded, but because we're now just getting work done, as so many recent examples have shown.

Please contribute your own predictions or share links to your favorite social media predition list for 2013 in comments below.

Anecdotally, with a growing complement of hard-won experience in the tools, technologies, and techniques of social business last year, companies are poised to have full contact with social media in 2013 like never before. From a statistical and trend perspective, the most recent data shows that we've now moved beyond the end of the beginning. Social media is no longer largely unknown and ignorable, but the exceedingly familiar and increasingly indispensable for many businesses.

However, as organizations experimented with and widely deployed social media in their various functions, 2012 also became an breakthrough year for teasing out the more intractable issues of the medium that are likely to vex many enterprises in the coming years. As companies grappled with the cultural, organizational, technical, and process issues that the open and participative nature of social media brought to the fore, we began to see some of the way through the challenges as well.

The social business software industry didn't stand still in 2012 either, from a big vendor perspective in particular. New and existing players either made significant updates to their social business tools and platforms, or revised their go-to-market strategies and end-user solutions to match. Along the way, significant new niches established themselves within the space to support the unique needs of the enterprise, particularly around analytics, security, and compliance. Organizations also sought to scale-up their social media efforts as efficienctly as possible to get at the benefits in a meaningful way.

Related: The social enterprise: Nine insights

But perhaps the most important development of the year was the maturation and accumulation of experience in how to make social business work in large enterprises. The complex dance that early adopters were forced to learn in trying to balance the constantly changing social business landscape leveled out a bit finally in 2012. For once, the seemingly endless growth of consumer social media seemed to align better with their organizations' own evolution through the early tactical experiments, subsequent pilot projects, and broader enterprise-wide adoption.

There are now signs of real maturity in the industry, such as the emergence of social media mission control rooms and well-funded centers of excellence, combined with real staffs and budgets, that are moving social media into the day-to-day operations of many organizations. While not all, or even most, organizations are quite this far along, a critical mass appear to be, and it's encouraging that we seem to be headed in this direction overall.

The Stand-Out Social Business Trends of 2012

So, with all of this in mind, what did we see in 2012 that stands out in retrospect as an inflection point or major development in the realm of social business? From my analysis and end-of-year conversations, here's what took place:

• The re-unification of social business. While 2011 was dominated by the realization that social media must be connected to daily work to have real impact, 2012 revealed that organizations had created numerous social silos that fragmented their efforts and people, especially when it came to the walls they erected between internal and external social media. Yet, a growing body of evidence clearly showed that when social business environments had the least barriers and most connection between them, the measurable business outcomes were substantially higher. Many organizations I spoke with this year are now planning to address the disconnect between internal and external efforts better and reduce their social media silos.
• The big vendors moved into social business. While IBM has long been a leader in social business, up until recently, the other software giants either had minor side bets or had platforms that could be social, but was not their primary function. This all changed in 2012 as Oracle, SAP, and Microsoft each doubled-down on social business by making substantial new public commitments to it, major related acquisitions, or introducing new software products. Or all three. SAP announced their far-reaching Jam effort, Microsoft acquired Yammer, beefed up SharePoint 2013, and updated their social business vision, while Oracle's Larry Ellison finally put his company into the industry at the CEO level. Of all of these, only Microsoft's moves seem to have made it rather challenging for social business practitioners in the short term, as the reformulation and resurgence of Redmond's social business offerings seem to be causing widespread re-evaluation of platform decisions in many of the companies I've talked to recently.
• Social business became data-driven. You couldn't sit through a presentation last year without hearing about the confluence of big data and social media, and more specifically how it will allow companies to zero-in on ROI. While the experiments to validate the latter almost certainly abound in a pilot project near you, the former became reality as hundreds of companies got into the social data business last year. The goal? To turn the mass of global conversations in social media into relevant insights that can improve results in marketing, sales, customer care, product development, and more. Numerous software firms added social analytics and business intelligence features to their existing products, while a great many new startups received funding to see if they could strike the right balance between usability, timeliness, relevance, and actionable information. What's more, enterprises were kicking the tires of these capabilities in droves, with virtually every company I spoke to last year closely watching the space and trying out numerous offerings.
• Mobile hampered social business projects more than it helped them. I almost wrote that the rise of smart mobile devices and tablets significantly impacted social business strategies in most companies, but that should be obvious to just about everyone. What's less obvious is that the strong user pull of mobile devices, which are (potentially) perfect for delivery of social business user experiences, made it awkward for older efforts still rolling out their pre-mobile social marketing and workforce engagement efforts. Projects that sought stop-gap solutions often delayed their own timelines overall or provided subpar interim solutions. Even more vexing, the level of quality of mobile apps for enterprise social business efforts, either homegrown or from vendors, was generally quite a bit lower than the consumer-side. While vendors such as Jive and Salesforce greatly improved their offerings, users that wanted to engage socially on mobile devices were often disappointed this year. However, there's no question that the situation will improve in the fairly near future, yet it will be painful for a while as companies sort out and reconcile their (usually separate) social and mobile initiatives. In the end, I suspect, software vendors will be counted on to provide most of the default user experiences in this regard.
• Social business merged with main customer experience. Or at least, organizations finally began to look at it this way. While social media used to be very much off to the side of the mainstream experience, with a community tab, some targeted social marketing widgets, or a row of 'follow me' buttons in a side bar, social justifiably became a first-class citizen of the customer experience in 2012. While a few brave souls in years past have thrown away their traditional digital experiences and made them all social, a new view has arisen to merge and combine the traditional and social customer experiences into something more holistic, natural, and expected by today's consumer. While organizations will likely take years to realize it in practice, it was encouraging to see this vision on so many drawing boards this year.

Where there other social business happenings in 2012? There certainly were, and you can find great roundups of these from industry analyst Michael Fauscette and Leanne Chase at The Community Roundtable. However, in my analysis, the five major issues above were the most impactful and relevant to social business initiatives overall. Organizations wishing to fast-forward their efforts can capitalize on these major crux points in the industry's social business journey, and avoid taking the long route along the way to becoming more effective digital businesses.

What did you see as the biggest social business trends of 2012?

As I look back, it's clear that we've now have more and better data points captured this year than ever before. There's little doubt now about the big picture: Social media is now being used in en masse for marketing, sales, operations, customer care, supply chain, and amongst our workforces. Yet the while the benefits are clearly uneven -- some companies are achieving truly stand-out ROI while others only see minor incremental value -- the trend is literally all in one direction: Social media adoption is growing steadily and is now used in the majority of organizations today in some capacity.

Last year, I benchmarked all the availabile data on social media adoption vs. social business, and it was obvious that businesses were about 2-4 years behind the rest of the world in adoption.  The leading edge of this graph has not changed much this year, but the lagging end seems to have.  A wealth of studies have emerged this year to show that social media not only has a firm footing in most organizations, but has become top of mind for C-level executives.

Related: Is it time for a C-level social media executive?

As expected, some business functions are ahead of the curve when it comes to adopting social media. Marketing has long been an early user in particular, but social workforce (aka Enterprise 2.0), Social CRM, and social product development have proceeded well. Others are decided behind the curve, even though there are strong examples in each case. These include social HR and social supply chain.

Related: Enterprise 2.0 a bright spot for software in 2012

Social Business Maturity Stats for 2012

So, what does this year's social business maturity data look like? Below is a summary with links to the details of the findings themselves:

• Two-thirds of businesses are now using social technology for marketing and related functions. 37% expect social media to be used regularly across their entire business. 9% expect it to be fully integrated. -- AIIM Report 2012.
• 79% of companies use, or are imminently planning to use, social media. Neary half of the companies who were rated as 'effective' in social media said it was integral to their firms' strategy. -- Harvard Business Review Analytics Services.
• 59% of companies use social media to engage with customers, 49% to advertise, and 35% to research customers. 30% use social media to research competitors and new products. Half, however, collect no data from social media. -- Stanford Business  2012 Social Media Survey.
• 46% of companies globally planned to increase their investment in social media this year. However, only 22% of middle managers felt prepared to properly incorporate social media into their work. -- IBM 2012 Social Business Study.
• 52% of executives say that social business is important to their companies today. 86% says it will be vital in three years. 28% of CEOs say social business is vital to their organizations, about twice the rate of CFOs and CIOs. -- MIT Sloan Management Review 2012 Social Business Global Executive Study.
• 71% of companies today say they provide customer support via social media. 18% handle over a quarter of all customer care this way. -- SAP and Social Media Today Report.
• Social workforce projects generally engaged less than half of their workforce, and 96% of external and internal social efforts were not connected, despite evidence of high ROI there. -- Social Business Council 2012 Engagement Study.
• 27% of companies now have someone dedicated to social media in their company. Those that have dedicated departments, 83% are staffed with 3 or fewer people. -- Ragan Communications and NASDAQ OMX Survey.
• Update: Nielsen's extensive new Social Media Report 2012 was just released. It reports that 47% of users employ social media to get customer service. One in three prefer it.

A few things stand out from this list. One is that more formal work than ever is taking place at highly respected organizations to understand the usage and efficacy of social media to businesses. This includes leading universities and think tanks including Stanford, Harvard, MIT, and many others.  This will help decision makers and business strategists have the clearest view yet on what works and how to most effectively transition to becoming a social business.

The second is that organizations are clearly in the very midst of this transition. Most have sprinkled social media around the edges, experimented, and have begun the journey.  Only the late majority and the technology laggards are left at this point (see visual above.)  If you haven't started by now, you are in a distinct minority for the first time since social media arrived on the scene.

The final point is that the statistics above -- and I'm fully aware that they are largely self-reported figures that should be taken with a grain of salt, though they paint a compelling picture in the aggregate -- are just the tip of the iceberg when it comes to the data available for organizations to make decisions on where to invest with social media and if they are above par, on par, or below par when it comes to applying what has become one of the greatest communication revolutions in history to their business.

To go more fully into this data, I'll be posting a gallery here shortly. In the meantime, please post your favorite statistics on social business from 2012 in comments below.

Yet a growing set of compelling examples is showing us unique and vitally useful outcomes that are only possible in social media.  For those just catching up with the story, part of the uniqueness and power of social media is that it generaly makes the information that's shared -- using social networks, blogs, and other forms -- public by default.

This is in contrast to earlier forms of analog and digital communication, where we were required to have perfect foreknowledge of who should be involved in a conversation, such as their phone number(s), e-mail address(es), or other contact  info. Everyone else was automatically excluded from the process and the contents of the discourse itself was largely invisible and left little behind. 

In sharp contrast to this model, as we've learned through a decade of global online experimentation, is that it's often best when we don't overly call-out the precise identities of those we wish to converse with. Instead, we've discovered that it's better for us to let those who find value in what we're saying to find us (typically via search or recommendation by friend or technology.) This enables us both embrace and enable serendipity, emergence, and open innovation and this -- as MIT's Andrew McAfee recently pointed out for the business world --- lets us bring enough of the right people together dynamically to create the most interesting and useful results possible. 

The result is a rich tapestry of conversations and information that everyone can join in on if they desire, or benefit from later on.

Related: Social media taps more directly into the power laws of digital networks

It's also turned out that the default public mode of social media, though it can also cause no end of headaches for companies in industries where information tends to be very private and controlled, allows us to realize certain very significant new scenarios that older communications technologies simply couldn't (or sometimes, just wouldn't.) What scenarios you ask? The most important and broadest one is letting us perceive virtually all global conversation across social media in real-time and then analyze it. While observing such conversations has been possible for a while, the timeliness hasn't been easy to achieve. The same for effective and meaningful analysis.

Scale is the first part of the problem with such timely analysis of social media, especially when it must be thorough and accurate. As I pointed out in my last post, that there are hundreds of large social networks, millions of blogs, and countless online communities and forums to look at and engage with. Important and business relevant conversations can be found in far-flung corners that must be examined, or we potentially pay the consequences. As Douglas Merrill observed last week in the Harvard Business Review blogs, adding new signals is one of the single most valuable ways to improve data analysis.

Thus, forging an integrated picture that truly conveys the constant and endless stream activities and insights within social media conversation is a relatively new phenomenon, enabled by a growing raft of so-called "big data" technologies like Hadoop and Mahout.

Related: 'Big Data' or 'corporate spying'?

Isolating relevant meaning from the noise is the second part of the problem, because the form and content of social media is relatively unstructured and informal. It's also filled with rich media, particularly pictures, as well as video and audio. Given the vast diversity inherent in the nearly 1.5 billion worldwide participants, including their language, cultures, customs, and idioms and it's clear that even if we can actualy process all of this conversation quickly enough, making sense of it all is as big -- and probably much more substantial -- a challenge.

Yet perhaps it really doesn't have to be all that hard, depending on what we're trying to accomplish. In collecting compelling examples of what we can do by simply by listening to and analyzing social media, it quickly becomes pretty obvious that we don't necessarily have to boil the entire ocean of scale and semantics when it comes to making social media strategically useful. In fact, some of the best examples often take relatively simple data sets and infer the meaning by combining them together with straightforward geographic visualizations, for instance. That said, the more signal and analysis we apply, the more accurate and useful the insights will be.

Related: How social media and big data will unleash what we know

While it's clear that we're still in the early, formative stages of social media analysis, it's equally clear that there is a great deal of business and civic utility in applying its techniques to our lives and work today. I've collected 10 good instances of what's possible, with thanks to Tom Raftery of Greenmonk for identifying some of the stellar examples in this gallery.

Gallery: Ten examples of big data extracting value from social media

Note: The stream graph in the visual above was generating using Twitter StreamGraphs. A stream graph is a common technique employed to visualize the shape of online conversations over time. This graph shows the most recent 1,000 tweets involving ZDNet on the afternoon of November 7th. It shows that conversations about 'Microsoft', 'Skype', and 'mobile' were the most interesting -- or at least the largest -- public conversations of that time period about ZDNet.

But the vagaries of social media -- with its deep roots in trust, authenticity, and genuine engagement with people -- means real commitment is required to succeed. And of a rather different kind. The cynical need not apply, nor the pretenders to the throne. While the energy and zeal of the Marc Benioffs of the industry certainly seem to measure up, it's unclear if the old-school firms can make the transition and fully support their customers' transition to new engagement models.

Or can they? A great exploration of this topic by Nilofer Merchant on Harvard Business Review today reminds us that IBM's stock price recently reached its highest point in the century-old company's history, just as their effort to become a social business is hitting its zenith.  Maybe big companies can innovate and evolve, if they can truly change.

And now perhaps it's SAP's turn. Yesterday, I received a preview of SAP's latest take on social software from Sameer Patel, who is Global VP and General Manager for, SAP's Social Software Solutions. (Disclaimer: He's also a good friend.) I came away fairly impressed. Before I get into the details, I should note that Sameer's spent the last few years exploring why social media is so successful in the consumer space, yet taking its sweet time getting to our urgent business problems in the enterprise world. It's not that enterprises don't have social software, they do. But they're not yet consistently effective at producing the results that are possible, despite increasingly strong success stories from some companies.

Probably one of the best summaries of Sameer's thinking is contained in his widely read Social Business Facts and Fiction post earlier this year. And you can see much of these ideas in place with his leadership of SAP's new social business offerings, which you can see depicted below from one of the slides in the briefing I was given yesterday. If this seems like an unusually personal perspective on an enterprise launch, I'd just remind you that social business is about people. In the end, the story of how SAP got here with social business is one made by the teams involved and their ideas. And it's now one that the market will decide if it resonates.

Now, let's get to the details of the SAP Jam (the name of their enterprise social networking component) announcement and its related functional offerings that I think are smart in terms of putting social networking deeply into the context of our work and how it gets done.

SAP's Jam and Collaborative Solutions

SAP Jam comes from to SAP from its SuccessFactors acquisition, which you can clearly see if you follow the main product URL. Many customers are going to ask how this relates to Streamwork, their previous social business offerings and Sameer has been clear to say that Jam is going to be the long-term go-forward platform. Many StreamWork functions are available in Jam already and Jam will be the foundation of SAP's social business functions going forward.

Here are the key aspects of Jam that are worth noting:

• Full-strength enterprise social network.All of the standard features you'd expect are contained in Jam, including activity streams, feeds, status updates, and so on. Filtering, a key but advanced feature to prevent non-essential information from overwhelming users' feeds, is also present. Support for OpenSocial is coming, as is a rich iPad client with video chat and record. Support for rich media of many kinds is available now.
• Strong content-centric features. The work in most business revolves around documents and SAP Jam gets this. Strong features for content creation, sharing, commenting, and editing are present throughout. Though some niche enterprise social networks get this, as does SharePoint, it's smart that Jam puts this front and center.
• Situated social solutions for functional use cases. The need to put social directly into business processes has been part of a vital industry discussion recently about making social networking more connected to -- and therefore more beneficial to -- our daily work. Thus these new functional solutions -- which cover the gamut of common workplace processes -- separates SAP's approach to social from most other general purpose social business solutions, which provide social in one place, but don't really get into the specifics of what an organization actually does. As you can see from the diagram above, SAP will provide situated social solutions across customer, employee, and supply chain/partner engagement. This includes opportunity management, marketing campaign management, social customer care/support, social HR functions like learning, onboarding, and performance improvement, and eventually supply chain management, including bidding, vendor collaboration and ideation, and more.
  
  Sameer also indicated that exception handling, a particularly high value social business use case according to industry thought leader John Hagel, will feature promently in these function solutions, such as collaboration around financial projections.  First up is SAP Social OnDemand, which uses analytics to turn social media conversations into business insights. This solution is aimed at helping marketing and customer service organizations engage with customers in order to increase brand loyalty, manage risks to reputation, and take advantage of new business opportunities.
• A modern and up-to-date vision for social business. As we'll see in my final analysis, SAP has done one other thing that's very important. It's offers an integrated vision for social business that is holistic and consistent across the entire organization, from marketing and customer service, to workforce and supply chain, using a single platform, yet with individual yet integrated solutions that focus on the unique elements of what each part of the business does. SAP's strategy and products around Jam and its associated functional tools is also designed around close and sustained engagement with the real-world, which I'll explore more in detail momentarily.

From an analysis perspective, and from my brief tour of the product yesterday, I can conclude that SAP is seriously attempting to provide an effective solution that's aimed at what the industry largely believes are the remaining gaps in making social business perform at its best. It's hard to say however, given how many companies have already adopted some form of social network or set of social tools, if there's a lot of room for major new entries. Yet I suspect, at the very least, given the careful intent to get deeply into what companies do using social engagement (and its enormous captive audience of installed base), that SAP can get some big wins and stay there.

Jam and some of its related functional solutions will start coming available starting in November is my understanding and will work on-premise, in the cloud, and in hybrid configurations. Pricing is unannounced but I was led to believe in my conversations yesterday that it would be very competitive.

Evolving the Big Picture of Social Business

SAP's vision for social, part of which you can see in the slide above, is a view that we're starting to see more and more often as companies begin to think more holistically about the new social channels that surround them and reconciling with the increasingly empty legacy channels they have. In this new view, engagement is the fundamental process that matters most and gets work done. Engagement is also where companies have now realized they need the most improvement. SAP's vision slide above shows that analytics and engagement tools are required to make use of these new channels. Customers, employees, and partners are all connected together in a useful way that ensures business processes are the focus and use social to create an absolute minimum of friction in terms of lack of information or a connection to the necessary resources or people to get any given piece of work done.

So, broadly, we see that in order to address the main objectives of social business, namely a much better connection between people they need to work with and the information they need to have, we see that we need two big operational elements place:

1) A virtuous engagement cycle that is grounded in listening and filtering of the entire social world for that organization's relevant interests, and;

2) The ability to engage in scale, with any conversation inside or outside the organization, in any engagement channel (social or not) in order to meet business objectives related to its functions (marketing, sales, product development, customer care, operations, recruitment, supply chain, etc.)

In this way, SAP's vision provides some of the key working elements for this revised and updated take on social business in a couple of crucial ways. This includes making analytics and engagement a first class citizen, as well as bringing social engagement to various individual business functions (something they will do increasingly over time.) What's less clear yet is whether they can make this vision scale up to the size of the full social business universe for all functions. But then again, that's the central challenge that we all have now.

Founded in 2009, the the Social Business Council is a peer community of those working on realizing social media within their organizations, and its focus in particular is large enterprises. It periodically shares its data from members publicly, and the latest report is a snapshot of organizations in North America and Europe.  Disclosure: I currently work for the Dachis Group, the company that owns and operates the Social Business Council.

While much of the talk in the industry lately has often been of the imperative to become a social business (take the Dreamforce event last month as a prime example), the report leaves little doubt that social media has broadly moved into the enterprise. However, it also paints a picture of the trials and tribulations that comes as an integral part of the package when it comes to achieving social business adoption and transformation in large, distributed, global organizations.

The answers to many of the questions were graphed in the report and provide a highly useful snapshot into the state of the art with social business. Perhaps even more useful were the freeform responses allowed to provide additional -- and often more nuanced -- insight into how social business is faring at these organizations. In fact some of these are highly illuminating and were both positive and significantly less so.  Good examples of freeform responses in the report include:

[Our enterprise social network] is growing, but extremely difficult to grow beyond 50%. Change management and investment of resources to handhold the remaining audience for adoption is not available.

And this from one of the more successful participants:

It is changing the way we work and truly flattening the organization. Trust and transparency are key to the success of this effort.

Perhaps less sanguine was this response:

As one of the advocates for the installation of the platform, it is frustrating how it is not being promoted internally. Its akin to having a telephone system installed where only 10% of employees get a phone or are even told about the existence of phones!

While the report itself provides the best details, some of the questions surface important snapshots of what is actually happening within companies as they adopt social business approaches. A case in point: As I've cited many times in my talks and workshops, perhaps the biggest question I'm getting about social business these days is about who should 'own' social business in the organization. While I believe the short answer is having a centralized support resource (with full time staff, community managers, and management authority to govern the effort) that empowers and enables decentralized uptake and action across the organization, the council survey paints a picture of what's actually happening today, as seen in the chart below:

Based on the survey data, IT departments far and away control and own the social business environment within most organizations (74.5%). Coming in second is Corporate Comm, at 38.2%. Knowledge management, marketing, and other groups round out the major areas that own the platform where social happens in their organization, but represent a small minority of respondents. While multiple responses were allowed, and it might not seem surprising that IT should own the technology component of social business, it does highlight a signature challenge with social business: That social often becomes just another software roll-out project. Why is that an issue? The report emphasizes that the cultural and change management issues are just as important as the technology adoption:

The challenge with introducing social collaboration software is not limited to the new technology itself, but rather with introducing new modes of behavior for corporate employees. Early adopters repeatedly emphasize how the cultural aspects of the social collaboration journey are far more rigorous and demand serious attention.

This is a realization that is still underappreciated, even as it's well known among social business practitioners, namely that social both requires and causes often profound changes in thinking and working in those that adopt it. These changes may not align well with parts of the organization that haven't gone through them and makes social media a real challenge to meaningfully adopt in some companies. That's not to say there isn't a lot of value in doing so.  With sources like McKinsey's new report on social business famously claiming there is $1.3 trillion in total economic value to be claimed by companies that achieve strategic adoption, you can bet that the challenging yet highly promising road to social business will continue to be followed.

Related: Social business and enterprise usage: The lessons

Finally, the report also zeros in on the level of engagement, which highlights another important social business topic, the use of tools that many often feel are optional. The chart belows shows respondents' reported level of engagement. Just 9% said they had over 50% engagement, while the 34% says between 30% and 50% of users logged in to the social network internally. As we can see from the social business success stories I explored earlier this year, companies like BASF report substantial and highly useful levels of adoption, but it often falls well short of the entire company.

In my explorations of social business adoption, global companies typically have this challenge. Because they're large firms that have many divisions, subsidiaries, and far-flung regional headquarters, there are many corners in which users might find themselves where they have little knowledge or connection with company's social network.

We should also remember that e-mail has the same issue.  Many types of workers, particularly hourly ones, aren't issued e-mail credentials either, depending on the tasks they perform. Seeking 100% adoption in these cases isn't the goal, not does it need to be. Instead, it should be adoption that has sustained and meaningful business impact. From my experience, and borne out time and again in the case studies we captured in Social Business By Design (John Wiley & Sons, 2012), high-levels of adoption are not necessarily required to get impressive business results.

So, in short, large companies are rolling out social networks, they are encountering challenges that include cultural change, limited resources, and the sheer length of time it takes to effectively engage at scale across an entire organization. That said, the report stresses that members feel their their efforts are a success overall and -- perhaps most importantly -- that all of them are continuing their social business journey.  For the largest and/or most complex organizations, it's now clear that road to becoming a social business will take many years, but one that is increasingly seen as a required move in order to grow and evolve while remaining successful and sustainable.

Whether or not you actually believe this vision generally depends on who you are.  There are certainly still some skeptics about social business, despite a growing number of success stories (and some cautionary tales.) SaaS itself is certainly less controversial and a foregone conclusion in many enterprises for non-mission critical functions. The broader vision of cloud -- as a place where our data, software, infrastructure, supply chain, customers and even workers reside, all on-demand -- is finally taking shape in IT circles and lines of business alike, though generally more slowly and steadily that vendors might have us believe.

Related:

• Salesforce.com's Dreamforce '12: By the numbers
• Salesforce demonstrating great momentum
• Dreamforce: Innovation among the internet of things and customer stories
• Salesforce's Benioff talks Facebook, LTE and more
• Sir Richard Branson dishes business advice at Dreamforce '12
• Salesforce launches Chatterbox, Identity, incremental updates

Those in IT whose responsibility is connected to business continuity or operations have nightmares about the loss of control, security concerns, manageability, and governance of the whole SaaS, social, mobile vision of the cloud that seems to be forming. Those on the business side worry about these issues too, but generally much less. What does seem clear is that we're on the verge of yet another shift in the technology landscape. Our software and data is finally becoming highly integrated in a way we couldn't imagine 5 years ago.

As we've seen here at Dreamforce, the future of cloud, mobile, and social are heading for new levels of maturity, depth, capability, and interconnectedness. We can also expect the apps and suites of the near future to be layered with big data-style analytics and dashboards so you can actually understand what's going on. Intelligent context is also arriving as a force and major feature of enterprise applications, allowing solutions to connect to and query a variety of data sources in the background to make work better as it happens.

All of this is seemingly impressive and compelling, analogous to the work Apple is doing with iOS in integrating a blizzard of modern yet complex functions into a relatively seemless and usable package. In fact, I've likened social networks such as Chatter as a social 'operating system' of sorts for enterprises.

But that's not all. The user experience of enterprise software is growing up too. Most of what I saw on stage this week at Dreamforce had polish and an end-to-end, soup-to-nuts feel of completeness to it, even substracting the fact that the presentations were carefully packaged and rehearsed. This is something I'm seeing in next-generation enterprise software suites in general (though less so from traditional vendors), but not until recently in the social business space. It's very encouraging and an important milestone.

I look forward to seeing customers that move from struggling with hard-to-use enteprise software to modern apps that offer highly usable consumer-style user experiences.  Consumerization of IT has had an impressive impact in improving user experience and setting the bar on how easy things like data integration should be.

Cloud and SaaS grows up, but are enterprises truly ready?

Yet the tension remains between the cloud and businesses today. The cloud is bigger, richer, and offers more variety than any IT department ever could (by many orders of magnitude), but at its core it's always someone else's show. Any enterprise that joins up merely adds itself to a truly vast entity, becoming only a very tiny part of it (ironically in much the same way an individual customer has very little influence on a large company.)

As I wrote last year in my analysis of Marc Benioff's social enterprise vision for its customers that 1) hosting in the cloud and 2) its original roots primarily as a sales tool might hinder broader adoption of its solutions by large enterprises. Based on what I saw this week, the latter issue in particular is steadily disappearing as the company has made many acquisitions in adjacent spaces and seem poised to successfully integrate them well beyond its original vision into marketing, customer support, HR, and more.

From this perspective, I think the company is both poised for much-needed horizontal growth into a larger space, as well as a harbinger of what's to come: Highly integrated turnkey enterprise solutions that make it easy to onboard, adopt, operate in a deeply connected cloud-based business environment.  In particular, the point made at the keynote session yesterday that marketing has largely been a bucket of unconnected solutions in most organizations and is ready to grow up into real enterprise solution, like ERP and CRM, is probably correct, though harder in practice due to the inherent innovation and outside-the-box thinking that's typical of the space.

Yet perhaps the most important subject in all this is the maturity of the social business space itself. Social marketing and social workforce were the earliest areas where social media first moved into the enterprise. Both of these functions have experienced a tremendous amount of activity over the years, with resulting lessons learned that have led to a second generation that is more mature, integrated into the business, and cross channel.  Along the way, social CRM, social HRM, and social innovation have emerged as significant industries in the social business space as well as more parts of our organizations became social.

Just as importantly, the industry has also provided us much needed supporting capabilities that we discoved were essential for using social media effectively in the enterprise. The two most important of these are social analytics and social media management. For its part, social analytics have given us a vital feedback loop needed to access the ROI, while the latter has provided a toolset to ensure enterprises can actually exert essential control and oversight over their social business functions across the business.

Related: The convergence of mobile and social: The next IT battleground

Social moves beyond functional silos, gets strategic

In heartening to see all of these capabilities come together in the next generation of social business offerings. Salesforce is a great -- but by no means the only -- example here and it's obvious now where this is all heading. Between Chatter, Work.com, Service Cloud, and Marketing Cloud, along with the analytics capabiities provided by Radian6, Salesforce is coming close to offering just about every major social business functionality required by the modern enterprise in a consistent, integrated, cloud-based, mobile-enabled way. This sets the right bar for the industry and genuinely helps us move our organizations forward with social business.

The top issues in social used to be simple: Understanding and articulating the business case, attain early adoption, and figure out the high-value use cases. With the rise of coherent social business suites (Jive and IBM are close and in some cases ahead with this vision) that get us beyond the tactical issues of cobbling together technology, we can now tackle the social business issues of today, namely measuring and optimizing ROI, better integrating social with our business processes, strategically organizing for social business across the enterprise (instead of primarily in functional silos), and engaging with the world at scale.  While we have many challenges lying ahead of us as we learn to tranform our cultures for a more connected, open, transparent, and participatory world, I think we've finally moving into a place where our actual capabilities can at last match our needs and vision for social business.

That's not all either. As a social networks get larger in size and longer in the tooth, they must add employees and venture capital firms to the mix as well, who want good returns on their time, effort, and investments.  These groups end up pulling the business in different, competing directions. However, the tension resulting from the cross-purposes between all of these constituencies isn't really surprising. After all, social networks -- like businesses -- are themselves made of people. Differing agendas, objectives, and priorities are part of the mix, like any community of individuals.

But of all these, it's developers and advertisers that are coming into focus recently as moves by popular social networking services such as Twitter have begun alienating the former as they appear to proactively cater to the latter.  In particular, this week's scrubbing of 3rd party app source names from tweets means that Twitter is essentially white-washing its developers' app presence from its feeds. What does this mean exactly? Going forward, when one posts to Twitter from Hootsuite or Tweetdeck or Instagram, no one will be able to tell which app was used.

While the source of the app that posted a tweet may not seem very important to users, it's critical for a developer that has spent their time and money creating a new type of Twitter client and relies on its visibility to succeed. And this where the rub is, because developers were arguably instrumental in building Twitter into what it is today. When I talked with Alex Payne, Twitter's API lead, back in 2009, he reported nine out of 10 users of the entire service were already using 3rd party clients to post and consume tweets. Developers had literally became the public face of the service for most users. What's more, they helped provide the myriad user experiences and features that no single company could provide by itself.

Related: Twitter edges out third party clients with tighter API rules

Now that the service is enormously popular, with over 500 million registered users as of this year, Twitter apparently wants to deal itself back into being the primary intermediary with the user. Increasingly restrictive rules for what developers can do continue to be announced. For its part, Facebook has also lowered the boom several times on those that helped build it out in its early days, when they needed every 3rd party app they could get back in 2007 to propel them past MySpace, the market leader at the time.

Of course, as I observed as Facebook prepared to go public, the dual opposing pressures of protecting customer privacy while endlessly inventing ever more sophisticated ways to monetize their data was going to be a tall order indeed. For the most successful social networks today, both of these issues will ultimately end up penalizing 3rd party developers that have invested in the platform. At the same time the host social networks will end up trying to preserve the most valuable aspects of the data only for themselves.

Those who've following my writing over the years knows that I'm quite bullish on strategically using open APIs as a way to scale partnership and harness innovation as cost-effectively as possible. It's a brilliant strategy for startups, and the smart use of open APIs directly led to the success of Internet giants such as Amazon, Twitter, and Facebook who've all used them to rapidly create marketshare, network effects, and vibrant partner ecosystems. Today, few startups launch without an API coming a short while later. But the end game for 3rd party developers seems increasingly bleak for social networks, at least how the services are designed as businesses today.

Where will the innovation in social go?

Then there's the issue that the current social networking monoculture, where the vast majority of people are using a few large services, hasn't changed much recently. Because of this, I think a strong argument can be made that they have inherently begun to limit innovation and create stagnation in the marketplace as they attempt to consolidate control. But with the recent provocations to developers (API restrictions) and users (privacy concerns) and the rise of a some compelling competing services, it may not be situation that lasts very long.

Declan McCullagh over at CNET summed up the situation well earlier this month:

Facebook and Twitter have gone out of their way to alienate the developers who helped make those two companies' upward trajectory so steep. It's not malice: rather, it's a business model that's morphed into becoming a one-stop-shop for users combined with big media deals like Twitter's Olympics partnership with NBCUniversal. (Put another way, just as investors worry about currency risk, app developers run a platform risk.)

Yesterday afternoon, for instance, Twitter slapped new restrictions on developers who make apps like HootSuite, Tweetbot, and Echofon. Their user count has been capped: if they have, say, 10,000 users at the moment, they can't exceed 20,000. There are new display guidelines that turn out to be mandatory, with Twitter threatening to "revoke your application key" -- the Twitterverse's death penalty -- if they're not followed.

Unfortunately, even just the talk about suffering a social networking "death penalty" is enough to make loyal business partners -- which is exactly what developers are -- think twice about investing any more of their funds, time, resources, and reputation into someone else's ecosystem, for it all to be taken away capriciously.

Users themseleves largely won't care much about this situation, unless their favorite 3rd party app is restricted in some way. But they're increasingly wary of their private data being held captive and exploited.  This is confirmed by the new Wave 6 report on social media usage in 62 countries, which noted recently that concerns about how much of their personal data is kept on social networks upticked sharply in the general public.

While the current monoculture of major social networks seems unlikely to change soon -- note: there are still nearly countless (and growing) numbers of minor ones -- the rise of Pinterest in the U.S. and Sina Weibo and Renren in Asia, shows that there's still room for more.  As large social networks cater less and less to the 3rd party developers that helped make them successful, this will create openings for hungry new social media startups willing to tap into the crowds of developers looking for easily tapped fertile new ground.

However, it still remains to be seen what a developer backlash will truly mean, other that shifting developers into creating their own social networks. In fact, one of the more interesting experiments along these lines is the new service App.net, which is a new Twitter competitor that claims to put users needs first and foremost. Note: By users it seems to means both end-users and developers, a smart move in my opinion.

App.net story is interesting and is riding the crowdfunding trend, meaning that it has legs from real people who are putting their own money into it. The service recently raised over $800,000 from over 12,000 contributors.  More importantly however, is that there are already over 40 mobile and desktop apps available after only a few weeks, showing a similar developer appeal as Twitter did in the early days. How will they make money without being beholden to advertisers? Users must pay to reserve their user profile and developers must do the same for API access.

What makes it special though, is that App.net is a new way to structure a social network that doesn't have the inherent contradictions that the major players have now.  Whether it is ultimately successful or not, I suspect it'll help prove that there are alternative -- and perhaps much better -- ways to design the business models of large-social social network services.

Related: Should companies drive their traffic to Facebook?

How do we resolve the tension between user privacy and data exploitation?

So what are the real lessons here? One, that social networking is a business, just like any other. It must have revenue to pay for the servers, talent, and network bandwidth to scale up as it grows, just like any cloud offering. Second is that long-term data ownership and control represents the competitive landscape of the 21st century.  Finally, the first and second points make an extremely slippery slope from which ultimately even the best market leaders can fall.

I think the juggling act to ensure users, developers, advertisers, and the service itself are happy (you guessed it, pick two) is going to be a painful one to watch play out in the social business era. Perpetuating the current model practically invites responsible entities, such as governments, to create a patchwork of laws and regulations to try and solve the problem. Not surprisingly, these laws and regulations already exist in many countries and more are likely. In fact, success may ultimately be only be achieved by a few adroit and savvy companies that can find a new way forward. Organizations betting on social can learn a lot from watching all that happens here.