Wednesday, December 28, 2005

Adapt or Die

Peter has another spot-on post about how upstarts like Moveable Type and Salesforce.com erode the foundations upon which enterprise software companies base their business.

Even if these challengers seem like gnats to the SAPs and OracleSofts of the world, they should mind that buzz. Just like Basecamp and Writely versus to the MicroSoft dynasty, the threat looms small right now.

Still, these threats grow over time. Remember that one year ago, Firefox was barely a blip on the IE radar, now it's at least a fearsome wasp. The OS market has proven somewhat harder to crack, though Linux and Mac both have made inroads lately, though for different reasons.

These markets share the same trend - lowering barriers to entry. For a long while, the only choice for an enterprise would be suites of enterprise software and personal machines running the MicroSoft suite. Especially in the enterprise world, the products have not been built to enable users to actually get their work done, rather features and capabilities are created to satisfy the corporate purchasing managers.

To those who have to use and support this software, the situation looks like this:
  • Too many features
  • Hard to use
  • Harder to support
  • Difficult and resource-intensive to alter/add features*
The new players are attacking the problems of users with a "low-hanging fruit" approach. They make certain tasks, such a simple collaboration (Basecamp, Writely), CRM (Salesforce.com), and enterprise services administration (Rearden Commerce) easy for end users, business owners, and IT support.
  • Give user just what they need
  • Easy to use
  • Easy to support - right now mostly hosted, but there is no reason that they can't be installed (Google Search Appliance, anyone?).
  • Simple to customize/add features*
When I read Peter's post, it reminded me of an incredibly interesting Supernova 2005 podcast of a presentation by US Navy Commander Greg Glaros from the Office of Force Transformation, formed:
Because our business model was broken, our methods of waging war were inadequate, and the enemy was out-adapting us.
He goes on to discuss that the Armed Forces are trying new ways to solve some of the same challenges that many organizations face: new operational tactics, managing information and communication, navigating organizational hierarchies, and dealing with an entrenched and sometimes rigid organizational structures.

In this case, it looks like government is recognizing its vulnerability before the private sector.

Organizations of all sizes are going to have to learn how to adapt and change more quickly. As the infoglut continues, new packaging and splashier marketing campaigns will have less and less effect on the success of products and services.

Senior managers must put decision-making power and information into the hands of the line-level employees and encourage two-way communication at all levels, or a more nimble, savvy competitor will take advantage of their vulnerability. Maybe the carnage won't be as gruesome as Commander Glaros' new approaches are designed to avoid, but it will be ugly.


The thing that bugs me is that all the drama is unnecessary. The tussles would be more interesting if all the players were nimble and clever.

* Salesforce.com provides a special development platform, and I believe that Rearden is planning on offering the same at some point in the near future. Peter also talks about how Adaptive Path and Seed Magazine have modified Moveable Type as an alternative to traditional CMS platforms. Pretty powerful stuff.

8 comments:

Robert F Sullivan said...

Chris,

I enjoyed your 'Adapt or Die' post. Over the last several years I myself have been involved with numerous enterprise software purchases and implementations. All too often did I experience the short-sightedness of companies buying behemoth software packages (CRM, CMS, etc) at behemoth prices; only to see them fail, or worse- sputter along. As you illustrate in your post, the market is organically evolving with great strides being made in ASP's, blogs etc. From a cursory perspective the big winners will be 'C' level companies as they can now affordable participate in an area where 'A's ruled the block.

Regards

Robert Sullivan

Charity Shill said...

Bureaucracies will not become nimble and clever, that is why they will deflate.

Small teams of niche players are taking that low hanging fruit and jammin'.

Dr. D said...

Nice reference on the salesforce.com and good points about outmoded business models. Have you looked in on Patricia Seybold at Seybold group? If you have cool...if not and you do...would you please tell her...Dana sent ya...I know cheesey...but they are pretty cool people...here's that link:
http://www.psgroup.com/
She is looking into loads of areas involving this same sort of question. Right on Chris...let the word go forth...it doesn't always have to be "hooked" and "updated" sometimes it can be...just plain good!

Humberto Mendes said...

I always see the Blogs of note...
Today was your day...
Here, you have a nice work developed.
Congratulations and continue the excelent blog for many more years.

Dirk the Feeble said...

Very nicely written. I have often been confused as to why the OS seems to be the final frontier of brand-name integration and why Windows remains so dominant there. I had a computer science professor who often referred to working with Windows as being akin to working on a car with the hood welded shut.

Unfortunately, as long as assignment requirements include things like "Must be in MS Word format," I find it unlikely for this trend to change anytime soon. Change begins with the consumer - the developer can only take it so far and then it's up to us.

Steve said...

Your posts are articulate and intelligent. I find your thoughts on enterprise software to be very much true. I'll be checking back regularly.

gonights.blogspot.com

Steph Dawe said...

Hey Chris, nice work, and congrats on the blogs of note thing.

Kamara said...

The only constant thing about business is CHANGE.