The consumerisation of enterprise software

By | Enterprise2.0, Startup general interest | No Comments

The consumerisation of IT is a much talked about theme of the last ten years or so.  The definition per Wikipedia is:

Consumerization … describes the trend for new information technology to emerge first in the consumer market and then spread into business organizations, resulting in the convergence of the IT and consumer electronics industries, and a shift in IT innovation from large businesses to the home. For example, many people now find that their home based IT equipment and services are both more capable and less expensive than what is provided in their workplace.

A newer but perhaps unsurprising trend is for enterprise software companies to start adopting the disciplines of consumer internet companies, or the ‘consumerisation of enterprise sofware’.  I had an inkling that things were heading in this direction back in 2007 when I wrote about edge-in adoption of social software at the enterprise, and now I think they are finally getting there.

Here is a list of the relevant ‘disciplines of consumer internet companies’:

  • Focus on creating amazing user experiences
  • Key metrics are customer lifetime value, customers acquisition costs and customer usage
  • Daily/weekly/monthly iteration of the product based on observations of customer use
  • Launch with minimal feature set (minimum viable product)
  • Low cost development leveraging open source software and the cloud
  • Minimal expense from the customer to get started
  • Minimal time commitment from the customer to get started
  • Great customer support

Companies employing these disciplines are winning because they offer a better service for the end customer.  Too many IT projects still fail and by following the above disciplines new wave enterprise software companies reduce both the chances and the cost of failure.  Two big ticks.

This doesn’t necessarily mean that selling has got any simpler though, at least to large enterprises who still have to run complex processes to ensure internal consistency, value for money, and compliance.  Whilst it is undoubtedly becoming easier to make small sales via the web, enterprise sales folk are still needed to land big deals. has expensive enterprise sales people and so will just about every other large software company (it is pretty much impossible to be a large software company without selling large enterprise deals).  Ben Horrowitz did a good job of explaining why on Techcrunch:

large companies employ complex processes to ensure that major purchases make sense. These processes generally span many different organizations and stakeholders. It is not unusual for a purchasing decision to include people from many different IT departments (e.g. development, security, operations) and business functions (e.g. Finance, IT, Legal). The decision often involves technical decision makers, economic decision makers, and risk management decision makers.

Often these processes are so complex that almost nobody inside the company knows how they work. Excellent enterprise sales reps will guide a company through their own purchasing processes. Without an enterprise sales rep, many companies literally do not know how to buy new technology products. A top notch enterprise sales person not only knows her customer’s process better than the customer, but will be skilled at characterizing the value of her product to each decision maker independently. This will involve product demonstrations, proof of concepts, complete return on investment analysis and even competitive positioning. The sales rep will work with the various constituents to help characterize the value proposition to their management teams.

It is difficult to do all that on the web.

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The future of social analytics

By | Enterprise2.0, Social software | No Comments

This is a great presentation on social analytics.  It touches on the importance of moving beyond capturing data in nice charts and graphs to understanding meaning and generating real insight – requiring the application of semantics and sociology.  Also interesting is the prediction that social analytics become a key plank in enterprise 2.0.  That makes sense to me, as to get maximum value out of social applications businesses will analyse what is being done and said to identify opportunities for people to improve their work and avoid problems.

Enterprise 2.0 and middleware-as-a-service

By | Enterprise2.0, Facebook, Google | 2 Comments

A friend of mine is currently considering taking a senior role at integration software vendor Tibco, a business I’m pretty familiar with from my Reuters days.  We were discussing their long term prospects as applications move increasingly to the cloud, which raised the question of how companies will integrate (or share data between) the offerings of the different cloud apps (or Software-as-a-service apps) that they use.

Three companies who have an answer to that question are Google, Salesforce and Yammer.  They have all developed a core application and then a platform which third party apps can plug into, much like Facebook has a core social networking offering and a platform which brings third party apps into the site and gives them access to the newsfeed and other communications features.

In the case of Yammer they have been going with an enterprise Twitter service for a couple of years now which has reached a very credible user base of 80,000 companies and one million end users, and then this week they have announced their platform offering.  Techcrunch used the following words to describe how the Yammer platform will work with third party apps:

Yammer is giving third-party developers the ability to sell and create applications like those that Yammer will now offer. For example, a Crocodoc app will allow you to highlight and comment on PDFs, Word documents, images and other files that are attached to Yammer messages. And new Zendesk app will allow users to attach a Zendesk customer service ticket to a Yammer message. The company says Box, Expensify and Lithium Yammer apps are currently in development.

As well as launching their platform Yammer have extended their core service from Twitter for the enterprise to Facebook to the enterprise, adding a newsfeed, an events app and other social networking features to their existing status update service.  I think this makes a lot of sense.  People benefit from the increased information flow that social networking brings as employees in the same way as they do at home, but they don’t want to share the same information with colleagues as they do with friends and it therefore makes sense to use different networks.  This is the promise of enterprise 2.0 about which I used to blog a lot a couple of years back, but which seems to have gone a bit quiet recently.

Google and Salesforce are, of course, a good deal larger and better resourced than Yammer and have had offerings in this space for a little while already.  Google has the Google Apps Marketplace which lets third party apps integrate with Google Docs and Salesforce has their platform.  So Yammer won’t have everything their own way, that said, this product area is very new and fast moving and it could well be that Yammer finds the sweet spot before its larger competitors.

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IBM adds microblogging to Lotus

By | Enterprise2.0 | No Comments

image IBM has added a bunch of enterprise 2.0 features to its Lotus Connections suite including status updates.  I think this could be a big deal.  Status updates could provide the communications glue that keeps everybody aligned and on strategy even as decision making and power are delegated to the edge of the organisation.

You could use Twitter for this, but it would be a hassle and it may be that few people buy IBM just for the status updates, but I wouldn’t be at all surprised to see microblogging become widely used across enterprises over the next few years.

Standards for use and new etiquette will need developing (e.g. to govern frequency of updates and appropriate mix of personal and work updates) and as with all new media there will be those who resist adoption, but the productivity and cultural benefits will make it all worthwhile.

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Enterprise 2.0 and the economics of abundance

By | Enterprise2.0 | 2 Comments

I haven’t written much about Enterprise 2.0 recently, perhaps because the slow rate of adoption has stemmed the flow of interesting startups in this area, but I remain convinced that it’s time will come.  That conviction was strengthened this morning when reading the chapter on the economics of abundance in Anderson’s Free.

Early in the chapter he describes how he and his colleagues used to receive regular emails from their IT department asking them to delete unnecessary files from shared drives, and how that changed with the realisation that storage is now cheap and abundant and it therefore no longer makes sense to ask people to spend their (scarce) time deleting files.  Critically, this realisation took a long time to dawn on them because the IT department was in the happy world of managing measurable storage costs and stepping outside that to thinking about people’s time was a move into the unknown.

So it is with enterprise 2.0.  Historically the scarce resource has been server space and the resources of the IT team who had to deploy and support enterprise apps.  In the world of enterprise 2.0 both those scarcities disappear.  The apps are hosted outside the enterprise, the employee takes care of deployment (in her browser) and support is handled directly by the app provider.

A significant part of the raison d’etre for IT departments is therefore under threat and it is little surprise that they resist the trend towards enterprise 2.0.

The chart below is copied from Anderson’s book and describes five changes in the optimal organisational model brought about by the shift from scarce to abundant computing.  Four of five apply directly to enterprise IT, and all are an anathema to most CIOs.

  Scarcity Abundance
Rules "Everything is forbidden unless it is permitted" "Everything is permitted unless it is forbidden"
Social model Peternalism ("we know what’s best") Egalitarianism ("you know what’s best")
Profit plan Business model We’ll figure it out
Decision process Top-down Bottom-up
Management style Command and control Out of control

Any cultural change is slow happen, and on this scale particularly so, which explains the slow roll-out of enterprise 2.0.  This also suggests that maybe the way forward in the short term is to target companies too small to have strong IT departments – a strategy employed by Basecamp, one of the most successful companies in this space.

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Twitter as a productivity tool

By | Enterprise2.0, Social networks, Twitter | 6 Comments

Since reading in Time this morning about How Twitter Will Change the Way We Live I have been musing on what that effect will be, and indeed how to think about the effect of Facebook and other social media, all from a professional perspective.

There is a lot of fun and social value to Twitter as well – I’m guessing we all love it as well for making us ambiently intimate with our friends and colleagues and for the fun and and interesting links it throws our way – but this post is about the dry professional stuff.

The starting point for my thoughts was a story in the Time article about a conference earlier this year called Hacking Education.  As many conferences do these days they set up a Twitter back channel using the #hackedu and whilst the Twitter conversation started out as being exclusively between people present at the conference by the end of the day there were a number of outside participants as well.  Moreover, these outsiders had contributed ideas that were taken up and integrated into the face to face discussion at the conference.

What Twitter did here was to provide a platform that allowed the conference to extend beyond it’s physical walls and allowed individuals who were not present to extend their reach right into the conference hall, in some small way at least.

Viewed this way Twitter is a tool with broadcast, filter and conversational features that allows us to touch and interact with many more people.  As such it extends our reach, efficiently putting us in touch with more ideas and more people, thus making us more effective – i.e. it is a productivity tool.

I think this notion of extended personal reach applies equally in our personal lives and also to social platforms other than Twitter, and if I can dream a little on a Friday afternoon, there might be enough here to unlock a new wave of productivity more generally.

In a world in which information is like air, what happens to power?

By | Enterprise2.0, Innovation, Strategy | 3 Comments

Us Now is ‘A film project about the power of mass collaboration, government and the internet’, and this is the question they pose at the top of their site.  It is a great question too – ‘information is power’ is an old cliche, but in the web era information is everywhere, and hence ‘power’ must work differently.  I think this transforms the way leadership works and the qualities that go to make up a great leader – both in government and the private sector.

This video from the site explores this issue a little on the public sector side, and asks the question ‘can we all govern’ and talks about re-constituting what is government.

You can, of course, only go so far with these ideas, at the end of the day someone needs to be in charge.  This is particularly true in the private sector where the interests of employees are not wholly aligned with their shareholders.

Nonetheless if information is everywhere you have the basis for much greater empowerment of workers, and we are starting to see the impact of this already – the notion of continuous development that I talked about yesterday is a good example in software companies.

From a leadership perspective the declining importance of information probably means that being good at company politics becomes less important and having good judgement (especially on people) and being trusted and respected come to the fore.

Enterprise2.0 – McKinsey reports it is starting to work

By | Enterprise2.0, Social software | 13 Comments

You know something is approaching the mainstream when it gets a write up in a McKinsey quarterly report, and so it is with Enterprise2.0, or as they would have it web2.0 in the enterprise.  They have been studying 50+ early adopter enterprises in this space for two years now and the write up shows that there is an even mix of success and failure, but growing consensus that there are real productivity gains to be had from increased employee collaboration using lightweight web tools.  Clay Shirky refers to this as an immense ‘cognitive surplus’ that can be tapped with participatory web services.

The article is well worth a read if you are into this space.  It covers many topics that we have discussed here before including the bottom up (edge-in) nature of these tools, the challenges for management in implementing them, the appropriate balance between central direction/encouragement and putting the user in control, the importance of building these tools into workflow, and how ego and public recognition are important incentives to drive adoption – and it does so with the structure and rigour you would expect from McKinsey.

I’m going to pull out just three things in this post.

Firstly – Adoption cycles – as regular readers will know I think time is everything in venture so it is interesting to note from the chart below that McKinsey believes that adoption is still limited and yet to reach the rapid growth phase.  That tells me the real excitement is yet to come for startups in this space, but that the likely big winners are probably already up and running and doing business.

Secondly – The technologies – in the table below McKinsey provides a helpful list of the technologies that we are talking about here.  The standout conclusion for me when reading this list is that they are not technically challenging to develop.  Thus for startups to have value in this space they will need to demonstrate massive growth and customer traction.  I think it is unlikely that we will see big ticket acquisitions for the sake of technology alone.  This is different to traditional enterprise software.

Thirdly – Market size – McKinsey has it at $1bn globally, which is, as they point out, paltry.  Further it isn’t clear if services are included in that figure.

Best Buy shows the importance of culture in the modern corporation

By | Enterprise2.0, Entrepreneurs, Venture Capital | 5 Comments

Last week I had the good fortune of meeting Peter Hirshberg and today I checked out his blog and a write up of an interview Peter did with Brad Anderson, CEO of Best Buy, at the Google Zeitgeist conference in September.

It turns out that Best Buy has embraced the use of social media to empower it’s employees and reaped massive productivity gains as a result.  From Hirshberg:

Traditionally, we associate companies like this [Best Buy] with classic top-down management approaches. Brad points out that as their business challenge shifted from simply distributing product to ensuring customer delight under countless usage scenarios, only a method that tapped the wisdom of everybody made sense.


Brad told me that it “absolutely flips the role leadership” since great ideas often come from the edge, not the brass. And, all this “ can be murder on middle management”

Three of the social media tools they use are:

  • The ‘Loop Marketplace’ which replaces the suggestion box with a market where employees can submit and share ideas, and often get them funded
  • A prediction market which was apparently dead on in predicting Christmas sales
  • An internal social network called Blue Shirt Nation which they use to solve corporate problems from how to increase use of the company’s pension scheme to changing IT systems.

The results – 40% more employees enrolled in the 401k pension scheme, millions of dollars saved on a new in-store IT system and employee turnover reduced by over 50%.

Underpinning the success of these tools is a strong corporate culture and very visible support from the CEO. 

A strong culture is born from strong values that everyone can see embodied in the every day words and actions of senior management.  Best Buy’s values are:

  • Have fun while being the best.
  • Learn
    from challenge and change.
  • Show respect, humility and integrity.
  • Unleash the power of our people.

Strong values are essential to guide employees for corporations who are serious about empowering the edge.

This is also true in small companies, where having a strong positive culture is a big driver of success.  There are some differences at small companies; it is not usually necessary to have a written set of values and the culture will change more quickly as the business grows, but the same basic logic applies.

The future of the desktop will look very different from today

By | Business models, Enterprise2.0, Social software, Widgets | 4 Comments

There is good, if rather long, piece on ReadWriteWeb this morning about the future of the desktop. This topic is of wide ranging significance, particularly for anyone with an interest in cloud computing, desktop apps and the browser.

I would highlight these points the article makes:

  • None of the webtop services around today have really nailed it
  • The browser will swallow up the desktop – it is a classic embrace and extend story
  • We will see a shift from information to attention – and the focus of apps will move from organising information spatially to organising information temporally
  • The webtop will be more social featuring shared spaces collaborative working – this is the natural human condition which has been stifled by the desktop and file mentality
  • This will be portable and federated with open policies and permissions

Services like Friendfeed are today giving us the first glimpses of how the future might look across a wider range of applications.