Enterprise Software Is Sexy Again(techcrunch.com)
techcrunch.com
Enterprise Software Is Sexy Again
http://techcrunch.com/2010/07/25/enterprise-software-is-sexy-again/
14 comments
With all due respect to Aaron, and as someone who wants enterprise software to get the attention it deserves, this reads more like an ad for box.net than a compelling argument as to why enterprise is making a comeback. Of the few investments being made these days, venture capitalists are by and large investing in consumer products and "green" technology, and until they feel those markets are totally saturated I don't expect much will change.
It's also the rare twenty-something founder straight out of college in the Valley who knows anything about double-entry general ledger systems or what CIOs of Fortune 500 companies really spend time worrying about. When I see headlines about Oracle and SAP worrying about their profits, I'll be more convinced that something has changed.
It's also the rare twenty-something founder straight out of college in the Valley who knows anything about double-entry general ledger systems or what CIOs of Fortune 500 companies really spend time worrying about. When I see headlines about Oracle and SAP worrying about their profits, I'll be more convinced that something has changed.
Agreed. Was hoping this article would give some advice on how to penetrate the enterprise market. Its much easier to grow in the consumer space than in the in enterprise space.
It seems that the hardest problem is getting the first enterprise buyer. I wish there were more articles discussing this valuable step.
It seems that the hardest problem is getting the first enterprise buyer. I wish there were more articles discussing this valuable step.
It's also the rare twenty-something founder straight out of college in the Valley who knows anything about double-entry general ledger systems or what CIOs of Fortune 500 companies really spend time worrying about
That's a great point. Any ideas on how you might start educating entrepreneurs to know about these pain points? It seems that by the time you've seen this stuff, you're already at a point in your life where you require stability rather than living on ramen in a scrappy startup.
I wish I had an answer myself.
That's a great point. Any ideas on how you might start educating entrepreneurs to know about these pain points? It seems that by the time you've seen this stuff, you're already at a point in your life where you require stability rather than living on ramen in a scrappy startup.
I wish I had an answer myself.
Well, I started keeping my own books with a pencil and paper when I was fifteen, and I started paying sales tax to the State of Ohio not long after. Suffice it to say I got an education in bookkeeping pretty quickly. I'm not sure I'd really recommend the same to any fifteen-year-old, but enterprise software is one of those things that is much easier to understand if you've run an enterprise before.
As for what CIOs (or CFOs) are thinking, you've got to talk to them. They (or if not them, their subordinates) belong to membership organizations. You've got to join them. It usually costs a lot of money.
As for what CIOs (or CFOs) are thinking, you've got to talk to them. They (or if not them, their subordinates) belong to membership organizations. You've got to join them. It usually costs a lot of money.
As for what CIOs (or CFOs) are thinking, you've got to talk to them. They (or if not them, their subordinates) belong to membership organizations. You've got to join them. It usually costs a lot of money.
+1 - this is the biggest reason why it seems so difficult to penetrate these markets.
+1 - this is the biggest reason why it seems so difficult to penetrate these markets.
Work in a large multinational enterprise for a while!
When I see headlines about Oracle and SAP worrying about their profits, I'll be more convinced that something has changed.
Megavendors may not worry much about their profits because they don't feel yet competition from startups. However this might change soon. One of my favorite enterprise-market startups is Vertica (www.vertica.com) - the product is just brilliant. I would expect in 3-5 years Vertica and some other analytical DBMSes (ParAccel, InfoBright etc.) to became serious players on enterprise market making IBM, Oracle and MS worry about their DBMS revenues.
Megavendors may not worry much about their profits because they don't feel yet competition from startups. However this might change soon. One of my favorite enterprise-market startups is Vertica (www.vertica.com) - the product is just brilliant. I would expect in 3-5 years Vertica and some other analytical DBMSes (ParAccel, InfoBright etc.) to became serious players on enterprise market making IBM, Oracle and MS worry about their DBMS revenues.
One thing that Veritica could learn from consumer startups is how to build a website! Their front page tells me almost nothing about what they sell or what they do. After a couple of minutes of clicking, I gave up and read the Wikipedia site instead.
Palantir [1] does a much better job.
[1] http://www.palantir.com
Palantir [1] does a much better job.
[1] http://www.palantir.com
Fully agree about Vertica's website - it should be redesigned for sure. The only small excuse for them is that they don't sell through website (contrary to consumer startups). Direct sales force and customer references do main part of this job (which is typical for enterprise market).
I wanted this to be a good article ... then I clicked and realized it was a TC guest post.
I know TC people read HN, so in all seriousness: how do you choose guest posters?
I like reading TC from time to time but every guest post reads like a 2-page magazine advertorial on why I should do business in Nashville—sponsored by the Nashville chamber of commerce ... It's 1 part information and 9 parts "look at me and my industry, we're awesome"
I know TC people read HN, so in all seriousness: how do you choose guest posters?
I like reading TC from time to time but every guest post reads like a 2-page magazine advertorial on why I should do business in Nashville—sponsored by the Nashville chamber of commerce ... It's 1 part information and 9 parts "look at me and my industry, we're awesome"
Aaron here (post's author) --
I definitely didn't intend it to be an advertorial; certainly it may come off that way as there's a lot of "this is how we do it, and this is what we're seeing," but any suggestions on how you see this going differently? Would love any suggestions... [email protected].
-Aaron
I definitely didn't intend it to be an advertorial; certainly it may come off that way as there's a lot of "this is how we do it, and this is what we're seeing," but any suggestions on how you see this going differently? Would love any suggestions... [email protected].
-Aaron
Going off on your own to solve an enterprise problem in startup mode may be sexy, but that is far from the typical image associated with enterprise software.
When I hear enterprise software I think of all the usual anti-patterns such as big design up front, a smattering of bike shed problems, having to integrate with legacy crap, arbitrary deadlines, no incentive to avoid technical debt, division of work in teams that do not communicate, ivory tower UX / architect / usability people, etc. etc.
Definitely not sexy, not then, not now, and not in while.
When I hear enterprise software I think of all the usual anti-patterns such as big design up front, a smattering of bike shed problems, having to integrate with legacy crap, arbitrary deadlines, no incentive to avoid technical debt, division of work in teams that do not communicate, ivory tower UX / architect / usability people, etc. etc.
Definitely not sexy, not then, not now, and not in while.
I think there are two main problems for Enterprise Software:
- Building the product: Can you build a product for, say a big university, without getting into the uni. and trying things out there? Can you do it from home, from your small laptop and your Internet connection. The same for hospitals. You need access to some resources, but who (the boss/manager) is going to give you permission and for whatever reason?
- Selling: As a bootstrapping startup can you afford the expensive meetings and dinners that managers and PDGs are accustomed to when buying something new for their corporation. Do you think they'll consider a 2x year old guys from somewhere in the world to implement something in their base.
Enterprise Software is not Sexy, but startups that succeed to walk through those two difficulties may have a chance to stand out.
- Building the product: Can you build a product for, say a big university, without getting into the uni. and trying things out there? Can you do it from home, from your small laptop and your Internet connection. The same for hospitals. You need access to some resources, but who (the boss/manager) is going to give you permission and for whatever reason?
- Selling: As a bootstrapping startup can you afford the expensive meetings and dinners that managers and PDGs are accustomed to when buying something new for their corporation. Do you think they'll consider a 2x year old guys from somewhere in the world to implement something in their base.
Enterprise Software is not Sexy, but startups that succeed to walk through those two difficulties may have a chance to stand out.
"$24.2 billion pie for all of US internet advertising"
Apparently Google made almost half of that money.
Google's 2009 revenues were $23.7 billion. 47% of their revenues came from the US, and they say
"Advertising revenues made up 99% of our revenues in 2007 and 97% of our revenues in 2008 and 2009."
So of the $24.2 billion made in US internet advertising, $10.8 billion was made by Google.
Official looking document:
http://www.sec.gov/Archives/edgar/data/1288776/0001193125100...
Apparently Google made almost half of that money.
Google's 2009 revenues were $23.7 billion. 47% of their revenues came from the US, and they say
"Advertising revenues made up 99% of our revenues in 2007 and 97% of our revenues in 2008 and 2009."
So of the $24.2 billion made in US internet advertising, $10.8 billion was made by Google.
Official looking document:
http://www.sec.gov/Archives/edgar/data/1288776/0001193125100...
Based on a lot of these comments, a decent subsection of the hackers here don't really understand the enterprise very well at all, much less the types of barrier to entry technology service providers face when targeting potential customers (or their problems).
I'm sure I'm not the most experienced here, but I am an IT director in a global enterprise and have ten years experience managing an internal appdev group, as well as owning our messaging, collaboration, and content services platforms/org. If there's interest, I'd be happy to kick off an IAMA to facilitate Q&A from folks who might like to know more about how the vetting process tends to work in a large corporation, or things they might do to wedge their foot in the door.
If this would be useful or interesting, let me know and I'll post.
I'm sure I'm not the most experienced here, but I am an IT director in a global enterprise and have ten years experience managing an internal appdev group, as well as owning our messaging, collaboration, and content services platforms/org. If there's interest, I'd be happy to kick off an IAMA to facilitate Q&A from folks who might like to know more about how the vetting process tends to work in a large corporation, or things they might do to wedge their foot in the door.
If this would be useful or interesting, let me know and I'll post.
I'd be interested as well. Looking at it from an entrepreneur's POV, being on the inside give one a competitive advantage. It would be good to share others who are in the same place.
I agree with your comment regarding most comments here show a lack of understanding of enterprise IT. But I guess that is the fundamental problem for new ventures to enter in the realm. Enterprise software operations on a ecosystem that is archaic and closed.
I agree with your comment regarding most comments here show a lack of understanding of enterprise IT. But I guess that is the fundamental problem for new ventures to enter in the realm. Enterprise software operations on a ecosystem that is archaic and closed.
An AMA would be great. Would you mind posting it when you have the time? Greatly appreciated.
I'd certainly be interested - I love enterprise IT. I currently work as a developer in a small consultancy working on that kind of stuff.
If your internal app dev group allows telecommute and you have any openings - let me know :)
If your internal app dev group allows telecommute and you have any openings - let me know :)
I'm interested too. I used to work in enterprise software sales (average sale in the $M range), so I know a little bit from the selling side, but it's always very educational to learn from the buying side.
My own view is that the more software costs to the end user the worse it is - and enterprise software can be very very expensive.
What about open-source enterprise software? In my experience, it's better than the vendorware, but that doesn't make it appreciably more enjoyable to use, develop for, or maintain.
Maybe not all enterprise software is as necessary as it is made out to be. I'm thinking enterprise portal software here. I really can't stand anything about them.
Maybe not all enterprise software is as necessary as it is made out to be. I'm thinking enterprise portal software here. I really can't stand anything about them.
It would be interesting to see someone do for ERP systems what salesforce.com did for CRM - the potential market is huge.
So, pros and cons for enterprise startup (arguably):
<Pros>
1) Range of opportunities is much more diverse than for consumer market - easier to find opportunity and differentiate.
2) Enterprise budgets are rather large.
<Cons>
1) Salesmen needed for direct sales. Even brilliant product can't sell itself in enterprise market.
2) Customers are much more sensitive to vendor's history and stability in comparison to consumer startups.
3) Barrier to entry is higher. Passing it requires industry knowledge.
4) Not so much buzz about enterprise applications today. Even successful products do not get so much coverage in media, as successful consumer startups do.
Anything to add?
Anything to add?
The suit is back?
Hah! I was just about to make the same comment! (http://www.paulgraham.com/submarine.html, for those of you unaware of the reference)
To summarize: There are many new and interesting problems for a enterprise to solve and there are not related to marketing. Since the problems are well defined and there is a lot of money involved, good software is appreciated and paid according. This is a new landscape. The article include many examples.
No.. Its not.. Sorry
Bah, these guys are getting smashed by Dropbox.
Have you heard that the suit is back?
To employ a passive-aggressive Wikipedia edit: [citation needed].
I actually do agree that Enterprise has some really interesting problems, and they are actually pretty good at coming up with solutions that make you go "Huh, that's actually pretty cool." It's just that they're so customized, buried so deeply in the corporate system, you'd never know they were there. Some of the message queue systems I've read about are quite neat.
But when I worked for an Oracle vendor, and at other IT companies around me, it seemed that technology adoption was entirely driven by top-down deployments from old boys clubs and salesmen that promised everything. Remember that old Dilbert strip where the salesman comes in and tells Dilbert he promised feature X, and Dilbert replies it doesn't have feature X? Happened to me too.
If there really is a sea change where clever engineering guys can dictate their software deployments, and not middle-management/sales who complain they just spent $X million on Y, so you'd better use it, then the market does have the opportunity to open up in a cool way. I just want to see more evidence that the market is how he claims.