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Can Enterprise Software be "Sexy"?

What is enterprise software? Is it to do with the size of the company? The companies with >250 employees that can't be called SMEs? Or is it the type of software that only becomes useful when it's used in a business or a part of Government? It often seems to be the software that has to come with a three-letter acronym such as ERP, CRM, MRP, ECM, PLM or DMS. 

There's been something of a stir recently to promote the idea that "enterprise software is sexy" again. For example, there was a keynote speech with this theme at the AIIM Expo in March by Aaron Levie, the CEO of Box.net.

To an extent, his message is a re-make of a point first put over by 37 Signals, the makers of products such as Basecamp, when they wrote that the reason "why enterprise software sucks" was because it involved software vendors who built for buyers who in turn were disconnected from their users. The buyers mostly worked from a RFQ-type model with lists of features, and vendors learnt the cost of a few "non-compliant" disclosures was to lose the sale. That would be fine if the list really was a true and accurate statement of requirements, but it rarely was. That became clear with the increase in software product web-based demos and the rise in Web 2.0 consumer-oriented, on-demand products. People frequently opt for the product with fewer features but has an easy and intuitive user experience. "Don't make me think" becomes the same as "don't bombard me with features I don't need or want".

There's a very good reason why software companies stay interested in enterprise software. It's true that the Smartphone application market is in a high-growth phase right now, but that means the total market went from $1.7B in 2009 to maybe $3B in 2010. Google has famously used its search engine to make money in the web advertising industry, but they share that market worth around $20B. In enterprise software, the annual ERP spend alone is around $40B. As Aaron says in his video, the US Government spends $80B. Spending by financial services institutions was over $350B in 2009, and that after a decline caused by the banking crisis.

If you look back less than a decade in the enterprise software industry, as Tien Tzuo of Salesforce.com does in this talk, there's been a shift from a "field-sales" model, where traditional sales representatives won deals from big customers, to a "two-tier-sales" model where customers come to your website and do a major amount of their product research there using the on-line evaluation demo or by registering for an account.

Back then, those user/customers wouldn't have had that chance to test-drive the software, and it was the hey-day of the heavy-touch sales rep, the buying committee and the list of RFQ 'must haves'.

There are a number of disruptions currently driving the enterprise software industry. There's SaaS, there's open source licensing, there's mobile apps and there's the constant shifts in popularity between different architectures and platforms.

There's a shift from the traditional marketing mantra of segment, target and position the product to one where software vendors build website demos and do their utmost to get prospective users to see them. Aaron Levie wonders why the old metaphor of enterprise software sales was big-game hunting, where the unfortunate enterprise customer had to be the elephant prey. Maybe now the better metaphor is that of bowerbirds, where the male of the species makes the most attractive nest-site possible to attract a mate.

It's all back to sex, again.

But you'll have to excuse me now. It's time to go and pore over today's Analytics for our nest-site web-site.

Value of a DMS for product development

Tags: Enterprise Software, Business Process Models