By Scott Campbell, Damon Poeter, ChannelWeb
12:00 AM EDT Mon. Mar. 17, 2008
From the March 17, 2008 issue of CRN

Adam Eiseman was a big networker long before the Internet came into play. But the CEO of Lloyd Group, a New York-based solution provider, has quickly learned that Web 2.0 networking initiatives can be viable tools for viral marketing, demand generation and recruiting.

Lloyd Group recently closed a deal worth about $100,000 with a start-up hedge fund that the VAR connected with through Facebook. And that deal has led to another opportunity that could be worth $500,000.

Now, Eiseman is a true believer in the power of social networking. Although they are in the same city, he didn't even meet the hedge fund customer in person until after the deal had closed. "For us, Facebook is just an extension of something we've always been doing," Eiseman said.

In the last couple of years, Steve Meek, president of Fulcrum Group Inc., has connected to more than 100 people via the networking site LinkedIn, which he recently used to hire someone to run a new managed services group within his organization. "The toughest thing is to find the right people for a position you have to fill. I've been on LinkedIn for a little while and started to think there might be a way [to find a good candidate]. I went through my notebook of people that I trust and sent out a blast. Within three weeks I had interviewed much better candidates than if I had posted on Monster," Meek said.

Online social networking platforms may have a long way to go before they replace more traditional business tools for making connections. But, clearly, these sites aren't just for Generation Y friends and family members anymore. A growing number of channel players are discovering there can be real-world business benefits to getting connected via these online platforms.

Huddle Up!

"How many people here are on Facebook?" asked Demo 08 executive producer Chris Shipley at January's showcase of new technology. About half of the attendees lifted a hand. "And how many of you conduct actual business on Facebook?" Just a few scattered arms shot up throughout the room.

Huddle, the company Shipley was introducing for its six-minute demo, aims to change that.

The London-based social networking company was at Demo 08 to introduce the integration of its hosted workspace tool with Facebook. On Huddle, users from disparate locales can build or join workspaces-called huddles-for personal or professional projects. With its Facebook-style interface and full integration with the social site itself, Huddle is billed by cofounder Alistair Mitchell as the place "where work and play collide."

Huddle offers four tiers of membership. The first gives users three workspaces and 1 Gbyte of storage for free. The next three tiers-marketed at professionals, small businesses and enterprises-cost between $20 and $98 per month and offer up to 50 workspaces, 25 Gbytes of storage, unlimited users, 128-bit SSL encryption for security and a customizable dashboard.

It's a platform Mitchell insists takes the fun of online social networking and points it in the direction of actually getting some work done. And with big U.K. retailers such as Boots already on board, London-based Huddle has some reason to believe its plan to spice up business communications for the MySpace generation has some legs.

But should solution providers care? Absolutely, say the documentarians of Gen Y. Some 70 million or so Americans born between 1980 and 1995 are entering the workforce with different priorities, social networking needs and relationships with technology than previous generations.

If you're not thinking about meeting these young workers' IT needs, say the Gen Y evangelists, you might be planning for retirement sooner than you'd like.

They Get It

Eiseman networked through traditional networking groups such as Ingram Micro (NYSE:IM) Inc.'s (Santa Ana, Calif.) VentureTech Network and Young Presidents Organization before registering with LinkedIn, his first online networking experience. "The nice thing about [LinkedIn] is everybody is on it. The challenge is everybody's on it," he said.

When MySpace was created, he joined but found it wasn't a great business tool. A former employee invited him to be a friend on Facebook. Eiseman joined and saw more potential for that site. He created two fan pages within Facebook for Lloyd Group, one with information about the company and an alumni page for former employees and interns. "We do marketing tips of the week, we have photos of company events, company newsletters," he said.

Meek also sees sales opportunities through social networking sites. "With the success I've had with LinkedIn, I think if we had a sales person to explore Facebook, we might see some [wins]," he said.

No Line Between Home and Work

Gen Y will be "the most high-performing workforce in history, for those who know how to manage them properly," said business consultant and author Bruce Tulgan, founder of New Haven, Conn.-based consultancy RainmakerThinking Inc. Young workers may not be as willing as their elders to sit in a cubicle for 40 to 60 hours a week, but their familiarity with remote technology means they can be productive outside the office and beyond the 9-to-5 work day.

Solution providers can offer the technology that younger workers want to do their jobs on the terms that make them most productive, said Huddle co-founder Andy McLoughlin.

"Our story is, it's not just what Huddle can do for you right now, it's about planning for when the MySpace generation enters the workplace," McLoughlin said.

Breezy social networking platforms like Huddle still have a long way to go before replacing more stodgy internal business communications apps, admits McLoughlin. For now, Huddle's main appeal is as a hosted platform for external collaboration, whether through its own portal, the Facebook integration or both.

Professionalism Still Important

At Demo 08, Huddle's presentation was followed by Catalyst Web Services LLC, an Alexandria, Va.-based startup peddling a hosted, Microsoft (NSDQ:MSFT) Outlook-style suite of business communications tools designed for SMBs. The uber-hip, Gen Y-heavy spiel of the preceding act somewhat unnerved Catalyst CEO Bob Mathew, he admitted.

"Having a clean interface like that is pretty appealing. It made us say to ourselves, 'Hey, do we have the right business plan here?'" Mathew said. The doubts didn't last long. Catalyst's software suite may be bread and butter, but SMBs who want to get up and running quickly and affordably are going to find its professional look and dependability to their liking, Mathew said.

"I do think the work environment is going to change and I think Web 2.0 is going to change things, but I don't think it translates directly to having to change all your IT tools to Web 2.0. It really becomes more a question of company policy, more than software," Mathew said.

Mathew's argument has a somewhat surprising defender in Tyler Dikman. Now in his early 20s, Dikman was just 17 when he made his first million building systems and reselling Dell (NSDQ:Dell) products. Today, he remains CEO of CoolTronics, but has branched out to become a principal at FlickIM, a chat program designed specifically for the iPhone. As a young VAR who is also heavily invested in a hip social networking startup, Dikman might be expected to evangelize for the acceleration of Web 2.0 in the workplace. But when we caught up with him in a telephone interview, he was anything but enthusiastic about work and play colliding.

"When I talk to my friends who are professionals, ... they want professional IT tools and they want separation between their collaboration on work and their social lives," Dikman said.

Meeting of the Mind Share

Dikman may not find Facebook-and by extension, Huddle-particularly appealing tools for a professional business environment. But that doesn't mean the success of social networking platforms in the consumer space can't be seized upon by the developers of strictly business tools.

"I think if anybody's going to be successful today, ... I'd say LinkedIn has highest chance of success," he said, adding that IBM (NYSE:IBM)'s Lotus SameTime instant messaging and Connections social software were leading the pack in leveraging Web 2.0 for the enterprise.

McLoughlin counters that his company is targeting SMBs who have big IT needs but small IT budgets, and more specifically, young people staffing, managing and eventually owning such companies.

"We really see our key market as being the SMBs. With Huddle, they can do IT without having to have somebody tinker with a firewall or a box. And what we've learned with various user groups we survey, is that it is a tool being used for work," McLoughlin said.