By M.R. Rangaswami, Sand Hill Group

Enterprise 2.0 is a new phase for the software industry. The advantages and benefits for software vendors are tremendous. Innovation has driven the industry since its beginning, but now, rather than developing software internally and delivering it to customers, end users, business managers, CIOs, partners and other members of the ecosystem will be included in the innovation process.

An important part of the Enterprise 2.0 promise is the self-service application realm. The user-driven nature of these applications will revolutionize the workforce and the nature of collaboration.

Workforce management applications will emerge as a critical component of Enterprise 2.0 success. Companies that deploy these applications will witness increased visibility, better decision making and improved productivity—all core to the promise of Enterprise 2.0. And as Enterprise 2.0 influences workforce management, “Workforce 2.0” will emerge as companies leverage unprecedented ways to bring together teams, collaborate, share and develop talent, and build knowledge.

The results will be products that are more effective than ever before, customers that are more demanding than ever before and a software vendor ecosystem that will rise to the occasion—or be passed by.

The software industry is being reborn—yet again. Enterprise 2.0 will bring massive innovation to business computing. I stand by the assertion I wrote last year: in five years, we will look back and not recognize the software company of today.

M.R. Rangaswami is co-founder of Sand Hill Group and founder of SandHill.com, a strategic online resource for software business executives. This piece first appeared as part of an op-ed on SandHill.com.