BSG buys Kalivo and names former Microsoft exec Douty president of its applications unit.BSG Alliance, one of a number of nascent on-demand software enablers, said Sept. 13 it will acquire software-as-a-service collaboration specialist Kalivo for an undisclosed sum.
BSG, of Austin, Texas, also appointed former Microsoft executive Steve Douty president of its applications and infrastructure division, BSG Applications, which provisions, manages and secures software for on-demand environments. Douty will be the right-hand man for BSG Alliance founder and CEO Steve Papermaster.
Kalivos assets have been integrated as the BSG Alliance Collaboration Hub, which facilitates online "conversations" among a companys employees or between employees and customers over the Internet.
The software also monitors conversations that customers, customer prospects and competitors are having about a company and its products on the Web.
Collaboration software is one of the key drivers of the Web 2.0 space, as knowledge workers are seeking to communicate with colleagues or partners through mashups, blogs, wikis and other online tools.
Adoption of such technologies in the enterprise is heating up, according to industry observers.
In fact, several panels were devoted to such collaboration tools at the Office 2.0 conference in San Francisco the week of Sept. 3, where executives from Microsoft, Google and other Web 2.0 players made a case for real-time collaboration and said enterprises are gradually busting the barriers to adoption for Web 2.0 technologies.
Click here to read more about the evolving Web collaboration market.
Douty cut his teeth at Hotmail more then 10 years ago as vice president of marketing, sales and business development.
After Microsoft acquired Hotmail at the end of 1997, Douty became director of business planning and media programming for MSN, which he helped turn into a portal and facilitated the purchase of LinkExchange and the creation of Passport.
"A next generation enterprise has collaboration at its core," Douty said in a statement. "Out of this collaboration, new social networks, communities, markets, and business models are surfacing—and changing the face of commerce. We plan to put BSG Alliance at the forefront of this revolution."
BSG, which also offers research and consulting services to help businesses plan their moves to SAAS (software as a service), has been enjoying some momentum. Since launching in April, BSG in May pocketed $20 million in funding led by Foundation Capital and Hummer Winblad Venture Partners and purchased consultancy The Concours Group.
But this startup has an advantage in CEO Papermaster, who has led several successful software ventures. Papermaster founded the BSG Corp. software services company in the 1980s and sold it to Atlantas Per-Se Technologies, which is now owned by San Francisco-based McKesson, for more than $350 million.
He later bought the BSG name from McKesson and created the BSG Alliance, which can meet a variety of software development needs. For example, BSG can help government agencies install online services or help corporations build customized search software.
The so-called SAAS revolution has seen a lot of mergers and acquisitions in the last few years, as companies of a new age seek to wrest some of the software market share from Microsofts iron-like grasp.
Read more here about the SAAS explosion.
Google has bought a raft of online software providers, including wiki enabler JotSpot, Writely for spreadsheets, and RSS publisher FeedBurner.
Salesforce.com, arguably the godfather of SAAS, has been just as acquisitive, picking up software developer Kieden, content management specialist Koral and mobile software maker Sendia.
The excitement around SAAS is warranted, according to research firm Gartner. While SAAS accounted for only 5 percent of business software revenue in 2005, Gartner claims that 25 percent of new business software will be delivered as SAAS by 2011.
Enterprise Applications 
