Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Magnet Systems Lands $12.6 Million Round From Andreessen Horowitz

Alfred Chuang was the A in BEA Systems, the software company that was acquired by Oracle in 2008. His new venture is an outfit called Magnet Systems, which is making a play in social enterprise, but it’s a little different from all the others out there going after that same space.

Enterprise applications themselves, Chuang says, have to change. And that requires a platform to build new applications that are social from the start. The company has built what it calls the Workplace Interaction Network, or WIN. It’s a development platform that lets companies build and deploy their own cloud-based enterprise applications that take into account the connections that employees have within the company and with customers and partners on the outside.

The company is announcing today that it has landed a $12.6 million Series A funding round led by Andreessen Horowitz, the VC fund led by Opsware founders Marc Andreessen and Ben Horowitz. Also involved in the round are Chuang himself (pictured) and another angel investor, Bill Janeway, former vice chairman of Warburg Pincus. (Andreessen Horowitz is having a busy week.)

Millions of Facebook and Twitter and LinkedIn users implies there’s a huge amount of value in bringing the social factors into existing and still-to-be-created kinds of enterprise applications. It’s a crazy area of interest in the marketplace right now. That chose to launch Chatter with an ad during the Super Bowl and that companies like Jive Software are attracting funding and seriously eyeing an IPO suggest that a fundamental shift in enterprise applications is underway, but it’s still early days. Most businesses, Chuang writes on his blog, still don’t get it.

“It’s almost impossible to believe, but after hundreds of millions of people worldwide have embraced social applications in nearly every aspect of their personal lives, businesses are still resisting social applications,” he writes. “In fact, many enterprises have not made any significant investment in social applications despite obvious use cases for customer service, HR, marketing, product development, recruiting, sales, training and much more.”

Like it or not, he says, employees are using these new lines of communication to get work done, and companies can either turn this trend to their advantage or get left behind. “When you stop to think about it, an employee’s network (and their ability to communicate and collaborate) is what really fuels business,” Chuang writes.

AH partner Ben Horowitz writes on his blog announcing the funding deal, and describes Chuang as the CEO he “admired most during the last decade.” Why? For getting behind and pushing through–over the objections of a skeptical board of directors–BEA’s 1998 acquisition of a little company called WebLogic. It was an early leader in the application server market and went on to grow into a significant portion of BEA’s business. His board convinced, Chuang was promoted to BEA’s CEO in 2001. Ultimately–and as Horowitz puts it, thanks to shortsighted shareholders–BEA became part of Oracle in 2008.

“The transition from today’s Web back-end architectures to tomorrow’s cloud computing will result in profound benefits,” Horowitz writes. “Over time, every existing application will be rewritten to take advantage of the cloud and these benefits. In addition, an incredible new class of never-before-possible applications will be developed.” Change is coming. Get ready.

Latest Video

View all videos »

Search »

There was a worry before I started this that I was going to burn every bridge I had. But I realize now that there are some bridges that are worth burning.

— Valleywag editor Sam Biddle