PwC: We hear mixed messages as to the relevance of social technology in enterprise software. What is you view?

Tarkoff: Software is designed to be social from the beginning. The effort in enterprise hasn´t been there for traditional enterprise apps. Enterprise software is failing to keep up in this shift in the consumer world. Enterprise software used to find its inspiration in military and intelligence, then enterprises would adopt. It´s now coming from consumers, and the position that puts enterprises in is difficult.

PwC: As people increasingly interact through digital interfaces — software and services — how does this affect software providers?

Tarkoff: Digital channels today offer small companies incredible level of insight into their customers and your interactions with them. When you can tie into information you have on your customer in your own databases, you can do some amazing things. … The Big Data phenomenon is a major part of getting a 360-degree view of the customer and their activities. … If providers don´t get the digital channel piece right, they will lose customers very rapidly.

PwC: Many enterprises have been cool to the idea of the cloud, though we´ve seen increased interest in the last year. Why? And how is regulation affecting cloud´s use?

Tarkoff: We´ve only seen SLAs [service-level agreements] in recent years for corporate cloud services. Governments and enterprises are getting more comfortable. The compliance rules are catching up, which is the right way if you want adoption to happen.

PwC:In consumer-oriented social services, privacy has become a concern. How should providers address that in services whose nature is about sharing information?

Tarkoff: You want the rules that really help guide protecting privacy as much as necessary in a world where people expect information to be public. And when someone violates that, it´s so easy to expose that bad behavior, ironically using the social networking and Web.

PwC: How does a move to services affect the business of software providers?

Tarkoff: Providers need to get products out a lot faster than before. People expect rapid deployment of services. And they use different devices for different things. There´s a real opportunity to change the pricing model, to move to value-based pricing. SaaS [software-as a-service] providers like NetSuite and Salesforce.com have just scratched the surface; it´s not just subscriptions: As a provider, I should be able to track my value and share in the result — and not get paid when I don´t provide value.