Despite the use of social sites like Facebook, Twitter, and LinkedIn in business today, there are an increasing number of midmarket companies developing and implementing social strategies inside the firewall. And it's worth investing in, insiders say.

According to a Gartner Inc. study back in October 2009, more than 90 commercial and viable social media platforms and solutions are on the market. Gartner further narrows the potential vendors to those with products specifically dedicated to enterprise social networking, resulting in 36 providers.

Consultants with ThoughtMatrix say corporate leaders are beginning to recognize the value of the organic knowledge that exists in these forums and look for ways to harness, measure, and act on the information. What they've found in their clients is a common goal to reduce cycle times, increase business efficiency, strengthen employee contributions, and lower training and development costs.

"Just 24 months ago, social networking was considered the domain of a specific demographic -- mostly younger adults and youth," says ThoughtMatrix partner Tony Rems. "Now, it has proliferated through all ages and all fields. From C-level executives using public networks (such as LinkedIn), private networks (such as ExpertCEO) to customer support representatives scouring Facebook and Twitter for consumer sentiment, we have all fully adopted social networking in some fashion."

Socialtext CEO Eugene Lee seconds Rems's outlook. His company's software-as-a-service offering aligns with customer growth while keeping corporate information easy to find.

"It's going to be a long time before companies are flush with head count and open [requests for proposals]... so it's not just, 'How do I make do with what I have.' It's, 'How do I make my people productive?' " Lee says. "Making intranets more useful; making intranets more social and not on a weekly publishing schedule... transforming from privacy to sharing; and hoarding information to being a trusted source on it; and creating cultures that foster that sharing, will create winning companies."

But if all this sounds familiar, it's because there are a lot of similarities between social networking behind the firewall and knowledge management suites from companies like IBM Corp. (NYSE: IBM) Lotus Notes and Microsoft Corp. (Nasdaq: MSFT) Dynamics. So, will enterprise social networking experience the same fate as knowledge management?

Not necessarily, Rems says. Unlike knowledge management solutions, employees are actually interested in using social networking; thereby increasing the likelihood of adoption and decreasing the time, budget, and resources required for training and education.

"We believe that social networking will succeed, where knowledge management has fallen short," Rems asserts. Three key benefits enterprises expect to realize from their social networking include:

• Employees welcome the use of social networking. Most employees are already familiar with the concept, dramatically reducing the learning curve.

• Enterprises can start with smaller and contained initiatives. Some projects can be implemented within weeks (or even days), allowing the enterprise to learn and adjust without committing significant budgets up front.

• Communities will develop and be grown organically by the employees themselves. As employees become involved with forming and evolving communities, they take ownership, thereby increasing commitment to ensure success. The social networking phenomenon is largely based on the masses creating the value, rather than on a top-down approach.

So who are the hot players in this corporate social market? ThoughtMatrix recommends Telligent, Igloo Software, Ramius, Lithium Software, and Jive Software for their ability to work with existing businesses.

For those who like to customize and are looking for cost savings via open-source applications, ThoughtMatrix recommends PHPizabi, Elgg, Boonex (Dolphin 7), and Drupal.

Like email and, most recently, smartphones, some technologies penetrate the enterprise as the users themselves bring them in, without the support of IT or other sanctioned corporate managers. Social networking behind the firewall is very much like that -- especially for midmarket companies.

As most product marketing managers can attest, it's much easier to introduce a product that requires no change in user behavior (and mimics that of social networks) than it is with something like standalone knowledge management.

— Michael Singer, Senior Editor at Internet Evolution, is focused on executive (Executive Clan) and midmarket (Midmarket Clan) issues.