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Magnet Systems exits stealth with big backers

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Alfred Chuang, who brought the TCP/IP stack to the original IBM PC, ran several software product development units at Sun Microsystems, and was one of the founders of middleware software maker BEA Systems, wants to take another crack at business software.

Specifically, Chuang's startup, Magnet Systems, which just came out of stealth mode, wants to make business applications more social. Somewhere between the siloed applications on your corporate PC and the social networking mojo epitomized by Facebook, Twitter, and YouTube.

In late 2008, after Oracle bought BEA Systems for $8.5bn, Chuang set up Magnet Systems to make business applications that deal with unstructured data such as audio and video snippets, and that can run on compute clouds such as Amazon's EC2 utility.

Chuang has cooked up a business application framework he calls the Workplace Interaction Network, or WIN for short. The first rev of the WIN framework is a product called Sales WIN, which automates the computing needs of a sales force, including data feeds, opportunity and deal tracking, collaboration with clients, and integration with customer relationship management tools such as those offered by Salesforce.com as well as Gmail and Outlook mailboxes.

Magnet Systems logo

In a blog post announcing the company and its $12.6m in Series A funding led by Andreessen Horowitz with some money kicked in by Warburg Pincus, Chuang laid out his vision of what he calls enterprise social computing, but did not get into the weeds of what the WIN software stack really was.

"Now ... about enterprise social computing ... 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," Chuang wrote.

"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."

Rather than try to fight the way people are communicating over social networks, Magnet wants to harness these techniques, which Chuang called "more human, more natural and more useful for the way real people work in the real world," but to bring them under control and keep it all secure. This is what businesses expect in their enterprise applications.

According to a report in the Wall Street Journal, Magnet's Sales WIN tool has been in beta at customer sites since last October.

The company's distribution model will have some of its code being open source to generate a user base, and some of it closed off to generate revenues. Rather than charging a set fee for services and support, Magnet is contemplating charging a cut of the sales action among customers or using some other metric to earn its keep. ®

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