Most enterprise software sucks. That is my considered opinion from 30 years in the software biz. Words that come to mind are: bloated, inflexible and user hostile. The good news is that it is getting better, a lot better. The driver for change is what I call the consumerization of enterprise software. These new software champions typically have some if not all of these 8 main attributes:
Monthly Subscription fees, not upfront perpetual license fees. This means the vendor has to be good to keep earning the $$$. The vendor also gets a predictable revenue line, so they can invest in R&D with confidence.
Adoption by users, not forced by corporate policies. Users "vote with their mouse", so it has to be good to get traction and bloat gets quickly punished.
Usable without a manual within 30 minutes, still valuable for a sophisticated power use 2 years later. That is the mark of greatness. It is a real art. The great ones make it look simple - it is not simple!
Hosted SaaS, so that vendors can invest R&D in new features and not in the intricacies of different platforms forced on them by an internal IT department.
Enabling secure, fine-grained communication across the firewall. This is the big issue for enterprises. Not many vendors do this right yet. Today we see too much binary "you are either inside or outside". The winners will enable security in a much more fine-grained way.
Loosely coupled, not attempting lock-in, enticing but not forcing use of related modules/products. This is a real biggie. Bringing any new system into a company involves a horrendous amount of co-ordination and interfacing. The one's that say "you can have just this little bit and it takes in data this way and spits out data this way" will win.
Freemium model, so some early experimentation can be done free of cost. This also reduces the vendor's sales cost, so they can invest more in R&D and/or lower the price enough to drive adoption.
Fun, relaxed, not taking itself too seriously. Taking off the suit helps adoption.
Whereas in the consumer world we wrestle with business models around advertising, in the enterprise the model is real simple - subscription fees. Often these are replacing massive old legacy systems. The subscription fee can be less than the annual maintenance fees of the legacy system, so its a "no-brainer" corporate decision to allow it.
The vendors who really get it, who are driving this include Wordpress, Google and 37 Signals. The losers in this game will be Oracle, SAP and lots of other traditional enterprise software vendors. The incumbents understand the problem and have plenty of smart developers and they have the capital to buy any of the start-ups. But they face the classic "innovator's dilemma". Any serious move in this direction will hurt their current cash cow, validate the start-ups and alienate their allies in the internal IT departments.
New tech markets go through fairly well-defined but overlapping phases:
The talking phase. This is when the money to be made is in seminars, workshops, conferences and consulting.
The experimentation phase. This is when lots of inexpensive or even free experiments are done. Nobody makes any money, but lots of people learn a lot.
The pioneer phase. This is when a few companies, led by visionary IT or business people, adopt the new technology in a serious way and have a big impact on their bottom line. They usually want to be quiet about this, protecting their intellectual edge as long as possible.
The breakout phase. This is when word leaks out, the winning vendors raise more money or get bought and it starts to look obvious.
The "tornado" (hat tip to Crossing the Chasm). This is when new vendors do their IPO and legacy vendors who have the head buried deepest in the sand suffer the worst that creative destruction can dish out.
My assessment is that we are currently somewhere between 2 and 3.
Fwiw, Newsgtor's Greg R. tweeted from the enterprise 2.0 conference today that the enterprise RSS session was standing room only! That made me happy to read, as I think RSS is one of the most important technologies enterprises (heck, anyone really) could adopt.
I remember when IT was a "new" area, before corporate rules and benchmarks existed. Users were demanding PCs and creating chaos in the company because "controls" had not been established yet.
Everything was new and changing fast, as for as much change has occurred, many of those systems are still in place today...just newer versions of the same. It was exciting and rewarding but as time has gone by these teams have evolved from being builders to maintainers. Advocates and implementers replaced with analysts and support desks. Up-and-comers replaced with supervisors stewarding budgets. A few good people stuck around, but many more, like myself, who were curious and stricken by the Internet bug left and started building apps for the world wild west. We’re not kids – we created their jobs then moved on.
I think an interesting problem exists, similar to the urban legend of the boiled frog, where these teams are now so steeped in a culture of operating and putting up well rehearsed excuses for not changing (cost, time, security, bubble 2.0, etc) they honestly aren’t able to recognize and help their business teams leverage this new opportunity.
Enterprise 2.0 has been validated; teams like mine have made it through many a good battle and are ready to really take all of it this time - it’s coming like a freight train, like the PC originally did (I hate to use that kind of easy comparison, but I think it’s relevant).
So, if they exist, what do you call an enterprise IT person who does “get it”. Perhaps some of the original pioneering roles in IT are ready for a comeback…
I thought RWW folks might be interested in some of the video content that's coming out of the Enterprise 2.0 Conference going on this week in Boston. You can watch the general session videos here:
Great post, Bernard. One important point to bear in mind is that not all enterprise software are on the same footing in the adoption ladder. For example, enterprise wikis are pretty much in the later stage of phase 4 (the breakout phase) and are on the verge of crossing the chasm, successful players such as Atlassian's Confluence and Jive Software's Clearspace are having a good stronghold to go into the Tornado phase, and BigCos such as Microsoft (with Sharepoint wiki) and Google (with JotSpot) are starting to jump in. On the otherhand, the enterprise collaborative spreadsheet space that we are in is at a much earlier stage, probably still in phase 2 (experimentation).
One of the greatest challenge in the earlier stage of the adoption ladder is to make sufficient users understand what they really need (as Henry Ford allegedly put it, "If I'd asked people what they wanted, they would have asked for a better horse"). Unfortunately it's not an easy thing to do and at the moment it's up to startups like us to really set the stage. This is true in every segment within the enterprise software space.
Steve, your comment describes it wonderfully, I love the boiled frog analogy. Yes I think there are plenty of people in IT that do get it and they are leading the charge again as they/we did in the PC era. The stakes for companies are higher now than they were in the PC era IMHO. This is not just internal productivity, this is about companies really reinventing themselves.
PK Chang, yes the one category that I come across everywhere is Wiki. It fits the company structure without any issues, so implementation is a breeze. I have come across Twiki a lot and that is open source. I wonder how much long term value there is in the Wiki space when open source is around?
I think there's going to be another wave of change, starting with salesforce automation. Salesforce.com has set itself up to be undercut by the likes of SugarCRM. I believe suers will begin to balk at 1) highly monthly subscription fees, 2) hosted-only options and 3) aggressive selling.
Most enterprise software sucks. That is my considered opinion from 30 years in the software biz. Words that come to mind are: bloated, inflexible and user hostile. The good news is that it is getting better, a lot better. The driver for change is what I call the consumerization of enterprise software. These new software champions typically have some if not all of these 8 main attributes:
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Fwiw, Newsgtor's Greg R. tweeted from the enterprise 2.0 conference today that the enterprise RSS session was standing room only! That made me happy to read, as I think RSS is one of the most important technologies enterprises (heck, anyone really) could adopt.
Posted by: Marshall Kirkpatrick
|
June 10, 2008 6:03 PM
I remember when IT was a "new" area, before corporate rules and benchmarks existed. Users were demanding PCs and creating chaos in the company because "controls" had not been established yet.
Everything was new and changing fast, as for as much change has occurred, many of those systems are still in place today...just newer versions of the same. It was exciting and rewarding but as time has gone by these teams have evolved from being builders to maintainers. Advocates and implementers replaced with analysts and support desks. Up-and-comers replaced with supervisors stewarding budgets. A few good people stuck around, but many more, like myself, who were curious and stricken by the Internet bug left and started building apps for the world wild west. We’re not kids – we created their jobs then moved on.
I think an interesting problem exists, similar to the urban legend of the boiled frog, where these teams are now so steeped in a culture of operating and putting up well rehearsed excuses for not changing (cost, time, security, bubble 2.0, etc) they honestly aren’t able to recognize and help their business teams leverage this new opportunity.
Enterprise 2.0 has been validated; teams like mine have made it through many a good battle and are ready to really take all of it this time - it’s coming like a freight train, like the PC originally did (I hate to use that kind of easy comparison, but I think it’s relevant).
So, if they exist, what do you call an enterprise IT person who does “get it”. Perhaps some of the original pioneering roles in IT are ready for a comeback…
Posted by: Steve Ireland | June 10, 2008 7:00 PM
I thought RWW folks might be interested in some of the video content that's coming out of the Enterprise 2.0 Conference going on this week in Boston. You can watch the general session videos here:
http://community.e2conf.com/community/videos
More coming tomorrow. Enjoy!
Posted by: Alex Dunne | June 10, 2008 8:26 PM
Great post, Bernard. One important point to bear in mind is that not all enterprise software are on the same footing in the adoption ladder. For example, enterprise wikis are pretty much in the later stage of phase 4 (the breakout phase) and are on the verge of crossing the chasm, successful players such as Atlassian's Confluence and Jive Software's Clearspace are having a good stronghold to go into the Tornado phase, and BigCos such as Microsoft (with Sharepoint wiki) and Google (with JotSpot) are starting to jump in. On the otherhand, the enterprise collaborative spreadsheet space that we are in is at a much earlier stage, probably still in phase 2 (experimentation).
One of the greatest challenge in the earlier stage of the adoption ladder is to make sufficient users understand what they really need (as Henry Ford allegedly put it, "If I'd asked people what they wanted, they would have asked for a better horse"). Unfortunately it's not an easy thing to do and at the moment it's up to startups like us to really set the stage. This is true in every segment within the enterprise software space.
Posted by: P. K. Chan | June 10, 2008 10:12 PM
Steve, your comment describes it wonderfully, I love the boiled frog analogy. Yes I think there are plenty of people in IT that do get it and they are leading the charge again as they/we did in the PC era. The stakes for companies are higher now than they were in the PC era IMHO. This is not just internal productivity, this is about companies really reinventing themselves.
PK Chang, yes the one category that I come across everywhere is Wiki. It fits the company structure without any issues, so implementation is a breeze. I have come across Twiki a lot and that is open source. I wonder how much long term value there is in the Wiki space when open source is around?
Posted by: Bernard Lunn
|
June 11, 2008 4:43 AM
I think there's going to be another wave of change, starting with salesforce automation. Salesforce.com has set itself up to be undercut by the likes of SugarCRM. I believe suers will begin to balk at 1) highly monthly subscription fees, 2) hosted-only options and 3) aggressive selling.
Posted by: pwb | June 11, 2008 7:54 AM