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Innovation specialist shoots for midmarket

Brightidea, a company that builds innovation management software, is betting that smaller businesses are ready to invest in its technology.

Innovation management specialist Brightidea launched a hosted version of its software on Tuesday with hopes that midmarket companies are ready to begin adopting the tools.

The realm of innovation management applications, software used by companies to collect and track new ideas submitted by their employees, has belonged primarily to larger customers in the past. Brightidea is betting that the hosted software model will help push such technologies into businesses previously unwilling or unable to afford the products.

"We know that there is a dramatic demand for innovation among customers, and traditionally only the largest companies could afford software to help with the innovation process," said Matthew Greeley, chief executive of Brightidea. "Midmarket companies may have even more pressure to capture new ideas and improve products than their larger rivals, so we think there's a big opportunity here."

For roughly $30,000 per year, companies can purchase a subscription to Brightidea's midmarket offering, which promises to deliver a centralized system where workers' suggestions can be organized, tracked and promoted by managers or marketing teams. The software also lets companies launch targeted campaigns aimed at finding new ideas to solve specific problems, or to offer rewards to employees who generate new designs that find their way into production.

Brightidea, which is in the process of changing its name from General Ideas Software, has already won over a number of well-known customers with its applications designed for larger firms, with the names of manufacturing giants such as Bristol-Meyers Squibb, Honeywell and Philips Electronics on the company's list of users. Some industry watchers believe Brightidea could touch off a wave of activity around innovation management among smaller companies looking to find ways to become more competitive.

According to Navi Radjou, analyst at Forrester Research, small and medium size--or SMB--companies could have a sizeable appetite for innovation management, because he believes that economies of scale have kept such companies from looking at the tools in the past.

"Midmarket companies will definitely benefit from these technologies, because SMBs are typically more innovative than larger corporations," said Radjou. "I also envision these tools being acquired by consultants who are building innovation management practices."

The analyst said companies such as Brightidea and its rivals, specifically Imaginatik, should be able to attract companies previously unable to utilize idea management technologies offered by enterprise applications makers including SAP, either because they proved too complex or too expensive to install.

One company already benefiting from Brightidea's applications is Robert Bosch Tool, the maker of product brands ranging from handheld Dremel devices to Gilmour sprinkler heads. The company has used the hosted version of Brightidea's software for almost one year as it has made preparations to install the on-site version, and Peter Neumann, Innovation Manager at the company, said the results have impressed thus far.

Despite the fact that Bosch already had enterprise applications in house that offered some form of technology aimed at helping with the creative management process, including SAP software, Neumann said his task became significantly less daunting the day Bosch began trying out Brightidea's software.

"Some groups had Excel spreadsheets, some had Access databases, essentially people had their own way of doing things when it came to saving ideas as they were submitted," said Neumann. "It's a nice way of organizing everything into one package, it took a while to convince management to buy in, but they see the value now: It's a front end process for getting the best ideas tracked."

By installing Brightideas applications, Neumann said, Bosch executives are now able to look at a central database of information and pass the best ideas gathered there to its marketing group for consideration as new products. While applications aimed at offering similar results, and found in enterprise software systems such as product life-cycle management are useful, he said, the singular focus of the Brightidea system helps it have greater impact.

"This was specifically designed with innovation in mind," Neumann said. "Yes there are other software packages that you can use, but this is customized solely for this purpose. You can use other tools, but it's like taking a square peg and pounding it into a round hole."

For its part, SAP said it does not have plans to launch an innovation management system designed specifically for midmarket customers, but company officials said demand for its xPD package, which is used for collecting new product ideas, is growing quickly. Kevin Fleiss, vice president of emerging product marketing at SAP, said the design of the application, which is based on XML and allows the software to be used with enterprise systems made by other companies, makes it a fit for customers of different sizes.

Fleiss said that when SAP first introduced its idea management tools more than two years ago, people were only beginning to consider such technologies, however he said this has changed rapidly during 2005.

"There's been a tipping point, and idea management is going from a nice-have to a must-have in all of our large IT shops," Fleiss said. "There's been an emergence of these new technologies over the last few years that has built upon a lot of the work that was done in enterprise resource planning, and in industries where research and development spending is high, we're seeing a lot of interest."

Fleiss believes that SAP's approach to idea management, which emphasizes integration of the software with its other enterprise offerings, will continue to beat out standalone products such as Brightidea's, but he said that SAP specifically designed its application so that it would work with many different kinds of systems.

Stewart McKie, analyst with Ventana Research, said SAP is likely to focus increasingly on idea management down the road and highlighted the fact that the software maker has increasingly built pieces of the technology into its flagship ERP (enterprise resource planning) systems.

"SAP is seeing an opportunity with large customers for another process solution that can be integrated within the scope of an ERP system," he said. "That's a sign that people are paying attention to this market and there is some demand for a better solution."

McKie said that it may be tricky for Brightidea to get smaller companies to invest in innovation management right away, but he believes the applications have a bright future ranging from large customers to small, based more on an organization's individual demands than its size.

"Basically the innovation management space is in much the same state that ERP was in about 10 to 15 years ago, with lots of vendors providing silo applications that don't talk to each other," he said. "That reality makes Brightidea's centralized approach pretty interesting."