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And, for the most part, they're promoted / sold in very old school ways.. direct sales, calling people up, taking out advertising, etc. Those sorts of concepts not only seem alien to the modern breed of 'startuppers' but even antiquated.

Yes this is an interesting point. Don't underestimate cold calling customers, direct sales, etc. It's extremely effective in a B2B market.

Yeah, that's the most interesting disconnect I've seen working in enterprise software. Your customers have never heard of Twitter, but they might still use a fax machine on a regular basis.

Our market is nonprofits and state and local governments, and the other surprising factor has been the sheer length of the sales cycle. Sales that come in at less than a year are the quick ones.

Any advice for how to learn about these markets, for the 20 somethings out there that can't immediately relate to this stuff?

Start networking. Talk to your parents, your friends, your friends' parents, your parents' friends, and anyone else who you can sit down with for 30 minutes. That should be plenty of time to listen to someone complain about their problems, and from that you should be able to make a list of possible business ideas. Then all you have to do is research them and figure out which one, if any, are viable.

This is something I have been struggling with too. I would love to make a useful web app that businesses would pay for, but all my ideas are something to do with software development, as that is all I know ...

I do try to speak to people in other industries from time to time to get ideas, but have got none so far :(

All we need is a 'social site' that non IT types can post their frustrations with the tools of their trade on to give us ideas - only problem is how we get non IT types to use it :-)

Pick a big company in this market (perhaps SAP) and start learning everything you can about them. Read their marketing pages and try to understand what they are selling and to whom. What problem do they think their customers have that they are solving? Look for companies hiring people with those skills (i.e. that require SAP experience) and see what they are building (systems like SAP seem to produce value for the internals of a company and it's hard to see what this is from the outside).

Unfortunately the techno-babble on these enterprise systems sounds pseudo intelligent. To see through all the buzz words and fads you need to work with these systems for a while. But to do that you almost have to drink the Kool Aid. The trick is to stop drinking once you can see the better solution. For many people here, I suspect the hardest part is swallowing the Kool Aid (at least that's the hard part for me).

But then as you go to build your better system, you need to realize that you are going to try to sell this to people who have been consuming this stuff for a very long time. They need SCA, BPM, SOA, UML, and just about every other combination of three letter characters. They don't know any other way. It's unfathomable to them that there could be an easier, simpler solution to their woes. It's like trying to describe a 3D world to a denizen of 2D space.

Any how just my 2 cents.

UPDATE:

May I recommend for your first glass of KoolAid: http://publib-b.boulder.ibm.com/abstracts/sg247234.html?Open

(not that this is good or authoritative, more so a random sample of what's ahead of you).

Publications to Read

   1) WSJ

   2) Economist

Websites to Peruse

   1) Wikipedia: What GOOG, AAPL, MSFT, CSCO, and ORCL have bought in the past 10 years

   2) sequoiacap.com (and other VC firms):What they're investing in. It's often pretty boring

   3) bloomberg.com

Go beyond techcrunch and gizmodo and look for the non-sexy side of things.

mixmax, I'd give you 10 upvotes if I could.

For anyone not all that familiar with "B2B", reread mixmax's post again. Every word. It's going onto my bulletin board.

The demand so outstrips the supply, that anyone writing good software has tremendous opportunities here. Thanks, mixmax, for reminding us of what is so easily forgotten these days.

People are making millions with innovative business software. Stuff that keeps hospital records, does simulations for the DoD, coordinates sales representatives, facilitates B2B, or CRM, or whatever.

The stuff making real money just has relatively very low visibility from the web. Most of these companies are small, private, and almost entirely owned by, like, three people. The founders come from industry and have zero interest in keeping a blog or writing articles relating their business experiences. Often they have legitimate industrial espionage concerns and prefer to keep a low profile except with regard to their handful of customers.

People who think really hard about facebook are living in an alternate reality that's distorted by spending so much time on the web.

It isn't accurate to say that "most" of these companies are small, private and owned by 3 people. Most of them are huge gigantic companies like IBM global services or Oracle or Microsoft Consulting. The ones that are small are always worried that a huge consulting firm is going to move into their market.

"The ones that are small are always worried that a huge consulting firm is going to move into their market." The thing is, huge consulting firms seem incapable of actually producing working software. They have to get the small companies to do the actual 'nitty-gritty' work for them.