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What do Egypt’s former president, Hosni Mubarak and Lotus Notes have in common? Middle East dictators and enterprise software solutions do not, on the surface, appear to have a lot of shared characteristics. In this case, though, there is a connection.They are both victims of the will of the people.
Once upon a time, the enterprise sale was a top-down, autocratic process. Men — and it was mostly men — in blue suits and white shirts with serious expressions would sell complex solutions to large enterprises. Lotus, SAP (s sap) and Oracle, (s orcl) Microsoft (s msft) and IBM (s ibm) built massive empires based on selling big things to CIOs, who made decisions on what to deploy. Those days still live on, and they aren’t going away. But there’s also a new paradigm emerging: the democratization of the enterprise.
Products from companies such Salesforce.com, (s crm) Skype, LinkedIn, (s lnkd) Google (s goog) with its Docs product line, Apple (s aapl) with its iPhone, and Dropbox show that nowadays the enterprise sale has evolved. It has gone from a primitive CXO autocracy to a much more participatory, possibly even democratic, form of engagement.
Today, the enterprise sale need not happen from the top down, but can grow organically from the bottom up. Nowadays, the CIO is not so much decision maker as much as decision acceptor. The collective actions of the worker bees dictate the terms, and the CIO acquiesces, reluctantly, to the will of the hive. These solutions are democratizing the decision-making process within the firm. The bees vote and the hive buzzes.
What is enabling the people’s revolution in the enterprise?
There are several drivers behind the emergence of such solutions. First and foremost, companies realized that cloud computing can shorten sales cycles and unlock previously inaccessible markets by eliminating the need for large boxes of servers delivered to windowless, air-conditioned rooms.
The absence of a server requirement or even the need to buy and install licenses with 16-digit keys opens up the market for smaller customers that might not be able to afford a server purchase. Equally important, it opens up the purchase decisions to individuals. A small firm can deploy Google Docs without the need to purchase or host equipment and with the ability to derive incremental value at the margin by, for example, adding additional users on a per user basis. I, drone, can deploy Google Docs, or Dropbox. I don’t need my CEO’s permission, my CIO’s blessing or my manager’s nod to use Dropbox or Skype or LinkedIn.
Second, most of the aforementioned companies offer some sort of freemium business model. This allows the individual worker to sample a bite before plunking down $40 for the all-you-can-eat smorgasbord. To borrow an example from my own experience, my company has two versions of our product: a professional version at $1500/seat and a free version. We have found that often, individual game designers, artists and engineers use our free version for prototyping a game, pitch the game internally and often wind up using the pro version to deploy the actual title. Similarly, Skype, Dropbox and LinkedIn all provide immediate benefits for free, with supplementary benefits to be paid for.
Equally significant, in today’s world collaboration with partners, customers and suppliers is equally important as collaboration inside the firm. Individual workers need to share data with external parties, who may not have access to the firm’s internal systems. Whereas the benefits of previous solutions were solidly locked down within the castle gates of the enterprise, today’s solutions are designed to empower the individual and her co-workers and the partners they work with. Dropbox facilitates file sharing, while Skype enables effective communication with presence, IM and telephony.
Finally, many of the products and solutions mentioned both cater to and capitalize on the increasingly ambiguous borders of work and play; they accommodate the lifestyle of the worker and the need to have convenience across the personal/professional chasm. It is hard to tell what is cause and what is effect in this case as products blur lines and blurred lines enable products.
Skype, the iPhone and Dropbox are excellent examples of products that are designed to accommodate work and play, home and office. By catering to the lifestyle needs of the individual — I only want one phone that I can use on the job and at leisure — democracy gains a foothold in the enterprise. Similarly, LinkedIn benefits the individual employee as much or more than it does the firm. Just ask any white-collar head hunter how he recruits nowadays, and LinkedIn is bound to be part of the conversation.
So what does the future hold?
Are box businesses gone forever? Are democratic, cloud-based businesses the only viable future? That’s unlikely. Indeed, the two approaches aren’t incompatible. Many of the democratic tactics deployed by the companies mentioned are mere tools to acquire larger customers in a traditional enterprise sale. Customization, security and compliance requirements for industries such as financial services and large corporations mandate a more traditional approach to enterprise software. On the other hand, is the enterprise sale forever changed? Probably. Which would you rather sell: MS Exchange or Google Docs? Would anyone even think about the Exchange-only enterprise approach today?
Oren Tversky is VP of Business Development for Union, a business unit of Unity Technologies dedicated to distributing high-quality, 3-D games on mobile phones, tablets, set-top boxes, connected TVs and other new platforms.