'Enterprise 20.0

I recently read Vinnie Mirchandani's blog (The Bionic Enterprise Software 2.0) and couldn't help but think that we are headed for some very interesting debates about "Enterprise 2.0."  It seems that with the all the marketing excitement around Web 2.0 there's a need by many luminaries to redefine how enterprise software vendors do business, and how enterprises should license software.  Now, I'm not at all saying that the industry shouldn't take a close look at itself on a regular basis and constantly improve and/or innovate.  But I do think we should take a closer look at what is happening here.

The concepts around Enterprise 2.0, especially some of the proposed additions in the blog above are quite interesting.  If we were to apply the concepts, we'd end up selling software in pieces, supporting two distribution models (Enterprise or Web), with third parties enhancing the source code, which eventually becomes open source.  The one thing that is spot on is that integrators and consultants would be required...and they might be the only ones making any money!

So how does all this start?  Well, some interesting new, free, or virtually free technology hits the Web by some 20-something year-old who was just trying to make life easier for him and his group of friends.  Through some network effects the technology reaches a tipping point and professionals look at it as a way to gain some competitive advantage.  So they install some software, or these days use the Net, and it spreads within a company until the IT department finds out, or worse, some compliance officer frets over violations in regulatory requirements and shuts it off.  The fact is that the technology proved useful, but needs to be "Enterprise-readied" before it can have greater distribution and penetration in the business world. 

Business users have been doing this very thing over and over again for many years (thus the "20.0").  Look at e-mail, chat solutions, IM.  All of these were available publicly and used long before corporate IT ever deployed a single line of code for any one of these solutions.  There's nothing new about the process of Enterpise-readying new software applications, just the name.  The key is what's necessary to make them suitable for businesses.  It seems that software vendors have always had to do the following in order to get the necessary business approvals:

1.  Provide a highly scalable and secure solution that meet the business objectives of a specific customer set.

2.  Deliver solutions to customers in the way in which they want the solution delivered.  If a customer wants to manage and deploy the solution themselves, great.  If they want a managed service provider, terrific.  If they want a hosted, community-type model, fine.  But, firms should choose their deployment model(s) based on the customer analysis they do up front when evaluating new markets or solutions, and the way in which that customer you are targeting wants it delivered. 

3.  Provide round-the-clock support for business applications.  The workplace is global and enterprise vendors need to respond accordingly.

4.  Build a network of partners to provide complementary products and services that focus on helping customers make more money, become more competitive, or just be more productive with your software.

Successful software firms will continue to concentrate on these core items in building enterprise software.  The self-anointed luminaries will make grand statements about the next New Thing, come up with a fancy label and wax prophetically about how they help define a new category of software and service. 

The rest of us will focus on value.

Comments

[viinnie mirchandani]

Nick, every one of the items I suggested is already being provided by one enterprise vendor or another. SAP sells its CRM in on-demand or installed basis. It has a significant on-line developer community which is starting to pass around work arounds and other IP. salesforce.com does provide transparency around many performance metrics. SAP itself provides third party maintenance support to Oracle apps customers.

And guess what - customers like most of these innovations. Because incumbent pieces of the industry are broekn. Why pay Oracle 22% when SAP offers you a adequate level of service at half that.

So why not generalize them to enterprise software in general as we define? I do not take credit for the term enterprise 2.0, but I saw a very narrow definition evolve (the impact of web 2.0 on the enterprise) and felt the need to expand it.

Innvoation cannot just be in product, in code or architecture. Other industries are innovating
business models, distribution channels etc.
The enterprise software market will do the same either pro-actively or because its customers force it to...Most clients I work with think the software industry is mroe broken than you present....

[Nick Fera]

Vinne

Thanks for your comments.

My concern with the long list of items is that few, if any firm can be all those things and make money. The examples you cited are each individual examples of one or more of the things on the list, not the whole list. And I'd argue that those decisions by SAP, Oracle and others are market driven, not Ent 2.0 driven. IMO, the transformation of some business models is constantly happening (and has been for years), and is customer driven. I see Ent 2.0 as a convenient name to group a number of activates, not the recipe for each step to be successful, and that's how I read the list, as well as others I have seen.

As for the industry broken...I'm not sure its ever been right. We're only really about 20 or so years old, 25 at most. The maturity of enterprise software is at best similar to an adolescent teen. We've got alot of growing up to do.