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Soon after Apple launched the iPad this spring, the TaylorMade-Adidas Golf Company bought about 80 of the tablets for its marketing and sales departments. Before long, most of those employees began using a content-sharing tool called Box.net as a way to recommend and comment on articles about leadership and personal growth, even though the IT department never sanctioned the software. Says Jim Vaughn, TaylorMade’s head of sales development: “I’m not even sure how or when Box was put into the picture.” But the software is now in use among hundreds of TaylorMade employees with tablets and smart phones.

TaylorMade was able to adopt this software so quickly because it’s not hosted on the servers at its headquarters in Carlsbad, California, but rather on remote computers in the cloud. It’s a story that’s happening over and over at many large corporations. Mobile devices are upending the way enterprise software is bought and run, shifting decisions from IT departments to the users themselves. This mirrors the pattern of previous sea changes in technology—most notably the PC itself, which was at first heavily resisted by IT departments.

Box.net—along with venture-capital-backed startups such as Yammer, Nimbula, and Zuora—is pouncing on this latest disruption now that it’s clear that iPhones, iPads, Android phones, and other gadgets are not just a consumer phenomenon but the future of collaborative work.

Globally, the enterprise software market is worth more than $200 billion a year. But more and more of that market is moving into the mobile cloud. “Mobile is very hard to do from behind a corporate firewall,” says David Sacks, CEO of Yammer, a corporate social network that enables employees at companies such as Molson Coors, Cargill, AMD, and Intuit to find coworkers with the right expertise if they encounter problems in the field.

These low-cost mobile cloud services (Box.net costs $15 per user per month) are poised to displace a sizable chunk of the larger market and grow into a $5.2 billion sector with 240 million users by 2015, says ABI Research.

The main incumbent for enterprise software, Microsoft, has been slow to react, largely because most of its customers for cash-cow products such as Office (for personal productivity) as well as SharePoint and Dynamics (for enterprise resource planning) are mainly using on-premise servers, not cloud storage. Such programs are generally sold to big companies under multimillion-dollar site licenses.

The new mobile-savvy cloud services can plug into one another, working together, making them de facto allies against Microsoft. For instance, Box.net and Yammer both connect with Google Apps—a set of cloud-based tools for creating and managing documents that Google sells as an annual subscription for $50 per user. For Google, the emergence of these mobile cloud startups reinforces its strategy, says Chris Vander Mey, senior product manager for Google Apps. The idea is to offer an alternative to Microsoft Office in the cloud while making it easy to share data among programs that do other tasks. “That enables us to focus on a few things and do them really well, like e-mail,” says Vander Mey.

It was only with the introduction of its Windows Phone 7 this fall that Microsoft began to strike back in earnest, with new development tools for the mobile cloud. The software giant is rolling out new cloud-based versions of SharePoint and Office365 for its mobile devices. Alan Meeus, a senior product manager at Microsoft, says that the company now sees its new phone and its new Windows Azure software as platforms for creating any kind of application for the mobile cloud.

But the startups began developing these new services more than three years ago, when the launch of the iPhone became a harbinger of change. Millions of employees started carrying two devices—one personal, another for work.

The redundancy of people carrying two devices was the “aha” moment that led venture capitalists to put money into Box.net, says CEO Aaron Levie, who cofounded the company—now based in Palo Alto—in his dorm room at the University of Southern California. He figured that the consumer device would become the new business device, leading to the need for new kinds of software. “We realized we needed to follow the users,” he says. By now, Box.net counts enterprises such as Nike, Marriott, Dole, and Clear Channel Communications among its 60,000 business customers.

And just as consumers like to try out new apps all the time, individual users can simply visit a mobile apps store to try out new business software on their devices. “With cloud services, the cost of failure goes way down,” says Mark Brennan, director of business solutions at Pandora Media, the Internet radio startup.

Pandora is relying on a low-cost mobile subscription service from Zuora to bill customers who upgrade to its paid app. And since Box.net can unify all its software services in one view on any device, says Brennan, it’s okay if different employees choose different brands of software. One group may like to work entirely inside Google Docs, he says, while other groups use Salesforce Content because their files are linked to sales accounts.

Pretty soon, Pandora won’t host a single piece of enterprise software at its headquarters in Oakland, California; it will be an entirely cloud-based enterprise. As more and more companies go this route, the disruption will ripple through every part of the software industry. “The status quo is always bad for innovation,” says Brennan. “A toppling is always a good thing.”

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