The consumerization of enterprise
Social Media may be a recent enough phenomenon, but it is making the elephants in enterprise dance.
The global enterprise software market which is currently valued at $280 bln is going through a full scale renaissance. Gone are the clunky, licensed business products once churned out by the likes of Microsoft, Oracle and SAP. Up and coming are cloud-based, intuitive, software-as-a-service applications with social components created by a host of young, disruptive companies. And the big guys are now beginning to play game. In a spate of recent acquisitions, monies worth $2.25 bln have been spent by Enterprise majors to acquire start-ups providing a social platform.
The five factors driving this trend are as under
- Easy to use and intuitive UI to drive the next generation of business software. Anyone who is aware of the Oracle enterprise systems would agree on how geeky it was and the man hours of training required to master Oracle. Deep down that trend is changing
- Software by definition has become a cloud based service piece as against a legacy thing that was bought, installed, integrated and resourced at enterprise. Licensing model led to build up of very heavy upfront costs and the need to maintain security and privacy at premises. Software-as-a-service (SaaS) instead treats software as a pay-as-you-go subscription, much like cable or phone service. Hardware and software is all centrally managed by the provider on cloud-based servers, including upgrades, backups and security
- The payment mechanisms are changing. As against a CAPEX led purchase earlier, SaaS solutions like Dropbox and LastPass percolate through the workplace organically, introduced casually by employees. If these apps indeed fill a niche, eventually CIOs take notice, opting into buying the enterprise versions. That’s the magic of the Freemium models.
- The Facebook approach in Enterprise is promising and delivering. The enterprise of today works across departmental silos with a lot of co-working and co-creation at hand. Collaborative project execution represents one of the most profound – and widely overlooked – advantages of new-generation enterprise software.
- Business computing goes mobile as BYOD soars. Availability of business critical data and information systems are hall-marks of new age mobility enterprises. The BYOD (Bring Your Own Device) phenomenon lets employees circumvent and subvert clunky, legacy PCs bloated with yesterday’s enterprise software.
So even if the Facebook IPO bust plateau-ed out on Social, the integration of Social and enterprise has great promise. It promises to phase out a $600 billion legacy behemoth- on-premises software, data centers and PCs.