Will The Enterprise Beam These Guys Up?

The current hoard of open source and web applications available "on-demand" for a few bucks a month represents the changing face of corporate America, i.e. "The Enterprise".  Understandably, the enterprise doesn’t go adopting Two Guys In A Garage Software, LLC products only to have the solution crash the next because Ingo didn’t restart the server in Norway last night after his most recent code drop.

Typically, the Enterprise will opt for very expensive solutions that crash nearly as often but take a highly staffed and trained IT staff to support.  At least there’s a big manual right?  I will not dare suggest that today’s Web 2.0 stuff is as feature packed as their corporate counterparts but…(yes I will…or at least I’ll prove to you that 95% of users use 1% of the solution’s available features.)

However, sometimes, rogue groups within the Enterprise start using applications to get things done.  These groups find a sponsor, often a corporate card carrying mid-level manager who can "get away with a $99/mo charge for a few months" without being questioned while his/her team, group, or division builds a "parallel intranet" or "business wiki" or "mini-knowledge base" without permission, instruction, or inhibition.  These groups are often lauded as "those guys who get things done".  They skirt around the corporate software initiatives and often must dodge inquisition at departmental meetings. 

IT DIRECTOR:  Hey I see you guys aren’t using the knowledge base and issue tracking software that we just spent 12 months and $300k deploying.  That’s not really supporting our corporate mission.  I mean, why are we deploying stuff if you’re not going to use it?

MANAGER:  I’d simply ask you the same question.

IT DIRECTOR:  But your web based application isn’t supported by us, we haven’t verified the security, and we don’t know if these guys will be out of business in a month!

MANAGER: True it’s not supported by our IT department…because I support it.  Actually, there’s no support since it’s that simple.  As for their longevity, the small bootstrapping company is probably profitable considering it’s 2 guys, working from their homes with no employees and no marketing expense.  I found them via word-of-mouth so their cost to convert me was effectively nil.  It’s a good model.  As for security, it’s probably better than what we have since there’s one point of entry.  If it goes away someday, fine.  I’ll have been very successful for some period of time rather than totally disappointed and lost with your solutions most of the time.

IT DIRECTOR:  I take offense to that!  We have 8 people in this department here, all of which are working like crazy to support this company’s IT infrastructure.  We work very hard to figure out what will be best for this company and we control a $2.5 million budget.  Our people are all at their wits end trying to support and deploy whatever this weeks flavor of the month solution for this manager and that manager while simultaneously fielding calls from all of your idiot people who can’t even figure out how to open OUTLOOK!!!!  And, this solution you use is ONLY $99 A MONTH…nothing that cheap can be worth a darn!

MANAGER: 
I appreciate your heartfelt comments Director.  If I pay your entire department $99/mo…will you provide me with solutions that work and treat my people like they’re customers that have needs and demands that MUST be met?  Because if you can, I’ll give you my AMEX number right now.

After the meeting:

CEO/OWNER/VP:  Hey manager, can you show me that software you’re using.  It sounds like it’s providing a ton of value for very little outlay.  Those IT guys…they sure are self-righteous aren’t they? 

MANAGER:  Yeah, there’s a ton of good that they do and much of our infrastructure does need their expert attention, but in today’s business climate, even if we have the money, we don’t have the time to launch worthless software initiatives that cost a ton of money.  It’s job security for these guys and I wouldn’t be willing to pay for that.  There will always be a place for Enterprise software solutions but increasingly, these solutions are being displaced by strong hosted apps.  These apps are 90% of the solution at 5% of the cost, with 5% of the support required to run them.  Is it really so important to have "1 mega solution that does everything for us?"  I’d rather have 5 effective pieces for the next 18 months and deal with that "disconnectivity" instead of paying 7 figures for a solution that we wont actually use when it goes live.

CEO/OWNER/VP:   You know manager, I’d like to have lunch with you on Friday to discuss your future here at ABC, Inc.  Can you swing it?

MANAGER:  Sure, I’m just finishing up a PowerPoint called "developersbyebye.ppt"
…but I should be available by noon.

More and more, we will see the enterprise spin put on Web 2.0 apps to make them expensive enough to make the cut.

We’ll see 75% of the guys doing these Web 2.0 "features disguised as companies" fold, merge, or go on to their next gig because they suffer the same project ADD that much of our generation has. 

The SMB and VSB markets will continue to drive innovation and feature sets that WILL HAVE TO BE PAIRED DOWN FOR THE ENTERPRISE.  (Remember..less features, higher price = better acceptance because the big guys can’t bite off too much at once).

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One thought on “Will The Enterprise Beam These Guys Up?”

  1. Totally agree. Enterprise isnt dead as people like to say it, its changing. The old model of paying a salesrep $200k/yr to sell a $500k solution is going away. Software As a Service is changing the face of software. While perhaps not all applications are suitable to be run as SaaS (e.g. Oracle Financials, Heavy Duty ERP, etc…), many are.
    Salesforce.com has done a nice job in being a pioneer in this space. There are many who aspire to be that and much more. Web 2.0 is going to change enterprise software in many more ways than it has done so for the consumer space (which sadly is getting most all the attention) – this stuff will now be available to all businesses from small to large. The barrier to entry is being reduced every day.

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