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Thursday, October 05, 2006

The Tumultous Enterprise Landscape

Jeff Nolan, fellow enterprise irregular, who recently quit SAP to start a new venture has written a very insightful piece. Am summarizing some of his points with my brief observations and adding up my thoughts at the end.

1) Direct enterprise selling sucks, is highly inefficient, and makes you do unnatural things in your product strategy in order to drive higher deal sizes. (Partly agree but observations are quite true)

2) Large enterprise software vendors are not the future. There just has to be a way to grow our collective markets by appealing to millions of small business users and this isn’t going to come from SAP, Oracle, or IBM.(Fully agree)

3) The SOA-ification of big enterprise products has attacked a technical dimension, not an economic or business model one. In a somewhat bizarre turn of events, the historical strength of market leading business applications, the integrated suite approach, is being turned from an advantage into a liability. (Fully agree)

4) Big enterprise software has historically been a product driven development process, not a user driven approach. These companies have applications “products” and “modules” and “components” instead of something more logical, like “process portfolios” that map to what people actually do in their jobs. In general he observes that vendors do not sell to businesspeople and applications masquerade as process solutions. (Agree)

5) New big killer apps that are not going to be built for today’s enterprise. Most of the enterprise software market today is about finding gaps and filling them, linking products in new ways, and leveraging more value out of IT investments that have already been made. The consumer side of business may offer better opportunities. ( Mostly Agree)

Best wishes to Jeff on his team's new venture - the fundamental ideas are indeed very strong. I recently wrote,atleast in respect of the enterprise software, which is closer to the heart of CIO’s its clear – as I had always been telling - while vendors are addressing market realities to keep their industry vibrant and with consolidation fever ahead - one could clearly hear the voice :whether customers would benefit a lot because of this, add the need to make more innovation happen and absorb faster. No,I am not talking about Marc Benioff finding SAPinnovation free, while I certainly agree with his perspective that observers tend to overestimate the creativity and innovation that entrenched technology companies can bring to a particular problem and underestimate the effect of business-model conflicts that lurk behind the scenes ( as applicable to all majors). Innovation need not not be always of the disruptive type but every type of Innovation counts. In today’s hypercompetitive world ,simply put innovation is non-negotiable and innovation streak is of very high value to enterprises.

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