Are We at a Point of Saturation?
In a post entitled Enterprise Software Sale as Corporate Pathology: The World’s Greatest Dog and Pony Show, colleague James Governor recommends the following practices for coping with aggressive enterprise software sales tactics:
In order to better fight their corner enterprises need to be smarter and more aggressive themselves. They should:
1. Pay more attention to the people that actually do the work. Don’t buy software that your developers have no intention of using. Make sure architects are listening to developers.
2. Consider offload options:
- application server – if you’re running a Java workload does it really require the quality of service that a WebLogic offers? If not why not look at Glassfish, say, or Apache Tomcat.
- database- not all data are equal. That being the case put data in the most appropriate place. If it just needs to be thrown in a bucket of bits then consider MySQL or a file system rather than your “enterprise standard relational database”
- cloud- its other [over? IG] there. take advantage of it, especially for non transactional workloads.
Use open source and cloud as personal trainers for proprietary software. Use alternatives to snap back if the salespeople try and bullshit you.
Examining the issue James brings up from an industry perspective, the question of possible saturation jumps to mind. At this point in time, do enterprise software vendors develop more software than the demand profile warrants? Such a situation, for example, manifested itself in telecommunications during the late 1990’s and early 2000’s when only 1-2% of fibre cable capacity in the US and EMEA has been turned on. The resultant losses have been catastrophic.
If we are indeed at a saturation point for enterprise software, a strategy question and a policy questions present themselves:
- For enterprise software vendors: What is the strategic course to turn around technological maturation and market saturation? Is “pedal to the metal” strategy still appropriate for enterprise software vendors?
- For policy makers: Is enterprise software an industry whose growth should be stimulated? Or, would another sector of software prove superior as a target for stimulation? For example, embedded software has the potential to be used in more and more products. Moreover, it has the potential to become larger component of the products in which it is embedded.
The two questions are related. Investment choices made by enterprise software vendors will determine how dynamic the industry becomes. A possible public policy decision to stimulate growth in enterprise software makes sense only if the industry demonstrates strong generative potential: it should be able to create new businesses around enterprise software; and, it must trigger growth in the various industries where enterprise software is used. Absent such effects, why stimulate growth in enterprise software?
As pointed out by Perez, the public policy decision needs to take income distribution into account:
If you want to sell basic foods, your potential market grows with number of low-income families; if you sell luxury cars… you look to the upper end of the spectrum. So the rhythm of potential growth is modulated by the qualitative dynamics of effective demand. Therefore, even if the quantity of money out there equals the value of production, if it is not in the right hands, it will not guarantee that markets will clear.
It was pointed out in Enterprise Software Innovator’s Dilemma that “good enough” Open Source Software is inevitably becoming good enough. If you accept this premise, an attractive policy decision could be to allocate public funds to making Open Source Software enterprise ready. Once it is (enterprise ready), the stimulative effect of low cost enterprise software could be huge. For example, it might enable SMBs to offer services that currently can only be afforded (and provided) by Fortune 500 companies.