Strong Opinions @marksbirch

Random thoughts from a NYC entrepreneur and investor about start-ups, technology and the people that make it all happen. Also find time for good tunes and good food.
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There are a lot of people proclaiming the end of enterprise software.  You know, the old, stodgy, on-premise software that you had to pay for upfront to the dodgy per seat license mafia.  That does not include the 20% or more per year for the privilege of getting hapless support and buggy software updates stuffed with bloatware features.  Oh, let’s not forget the army of consultants and outsourced tech shops that build and maintain these monstrosities or the week’s long training sessions required to get the staff up to speed on using the obnoxiously difficult and non-intuitive system.

There are a lot of reasons to hate enterprise software.  When most of the technology world has leaped ahead, the feeling is that enterprise has not moved much beyond the days of the mainframe, just with more graphical user interfaces.  When relational databases took corporations by storm, the interfaces were little more than carryovers from the mainframe terminal interfaces.  When companies realized they had lots of databases storing tons of data but little insight, they built bigger databases called data warehouses.   When the web became the rage, they took those mainframe screens and merely converted them to HTML.  Even when many companies were issuing company-owned Blackberries to keep the workforce connected, rarely did enterprise software make the mobile leap.

The state of enterprise software in most companies is a tangled and ugly affair.  Rigid and unfriendly user interfaces, complex interrelated databases, a rats nest of integrated systems, business logic run amok, and legacy code from systems and platforms long forgotten.  That does not even touch upon the ball and chain of ERP systems and packaged business applications.  This morass is then “managed” by information technologies teams that have been roiled and ravaged by outsourcing vendors, a highly liquid job market for technology, and suffocating internal politics.


So is the consumerization of the enterprise even feasible?  While I am inspired to hear stories like folks such as Bijan Sabet using SaaS offerings to run his business, we cannot simply jump to the conclusion that enterprise software is heading for the grave.  To give you some perspective, the entire global IT spend on enterprise software is projected to climb over $281 billion this year.  That does not even include the hundreds of billions spent on IT services to implement and maintain that software as well as the hardware it runs on.  There is a powerful incentive and strong market forces to keep the status quo.

What is encouraging however are two recent movements that underlie the consumerization of technology in the corporate setting.  The first is mobile, which is driving a nail in the coffin of horrific user interfaces while providing real-time, always on access to information.  The second is the increasing savviness and expectations of the workforce to technology.  Prior to app stores, most people rarely interacted with much software in a personal setting outside of Office suites, IM, browsers, pre-loaded OS media apps, and a few one off specialty apps.  Now you can load and unload apps in one click on a whim and quickly build up fifty or more apps on your phone or tablet within minutes.  People are making their voices heard in the consumer space and that new found knowledge is seeping into the enterprise.

What about SaaS?  That is certainly important and companies like Salesforce and Workday have exploited those trends to make headway into enterprises.  However, they are still big pieces of software that require consultants and training and customization for apps that are only a few degrees more usable than their client/server or mainframe brethren.  All that really changed was the licensing model and providing a more web-centric architecture.

The real interesting trend will be how quickly enterprise apps can achieve market scale taking a mobile centric approach.  Of course, there are significant challenges when it comes to security and standards.   What is clear however is that the real opportunity is not in building yet another web-based CRM app, but in building enterprise ready and hardened business apps that have mobile in their DNA.  That means not merely porting a legacy app to mobile, but thinking natively of what entails the mobile experience and using that as the starting point for delivering a richer and more user centric experience.  When that happens, then I will be ready to proclaim the consumerization of the enterprise.