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The democratization of the enterprise

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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, (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.

Servers? We don't need no stinkin' servers!

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.

Check out this sweet app I downloaded.

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.

8 Responses to “The democratization of the enterprise”

  1. Dave Sandrowitz

    I think that the consumerization of IT is only a small part of the democratization of the enterprise, but that the process of democratizing has not made nearly the cultural and organizational changes that it will need to for lasting impact. For all the talk of virtual teams and telecommuting, web conferencing and collaborative tools, the vast majority of workers are still locked into rigid hierarchies dominated by antiquated HR and IT policies. iPhones are consumerizing IT, but it is on the periphery in the vast majority of companies and the real value in having those devices will not be fully realized for some time. I look forward to the future.

  2. Steven Romero

    Great conversation, with too many dimensions to cover in a blog comment. The one aspect I find most interesting is the notion of “the CIO is not so much decision maker as much as decision acceptor.” This is only the case when the CIO is not sufficiently connected to his or her users. Most articles I read poise the ‘consumerization of IT’ as a threat, as opposed to an incredible opportunity.

    Enterprises with the appropriate governance and process in place to obliterate the far-too-long-standing divide between IT and the business are well positioned to exploit the advantages of consumer-driven IT. This is a topic I address at length in my new book, “Eliminating ‘Us and Them’ – Making IT and the Business One.”

    Steve Romero, IT Governance Evangelist

  3. John Harrington, Jr.

    In light of this topic, I thought of two webinars for anyone interested in properly engaging the consumerization of IT in their corporation:

    This webinar gives pointers for enabling iPhones and iPads in the enterprise

    This webinar tackles the app-enabled smartphone revolution and how it will impact the BlackBerry workflows that enterprise IT has grown accustomed to

  4. I think consumerization of IT is overblown, accessing email via iphone and android phone is not that great a game changer. I find it tiring when I see articles that say IT workers using iphone is proof of consumerization of IT. I think the biggest changes in IT going on are three things
    1) multitenant cloud pioneered by Salesforce
    2) virtualization pioneered by VMWare.
    3) open source software pioneered by RedHat.

    And when I say pioneered, I mean a successful business model and commercial acceptance.

    And how many consumers have heard of VMWare, Salesforce and Redhat ? practically zero.

    Unfortunately the production data and the workflows they initiate is still locked on technologies provided by the old companies Oracle and IBM which are still doing very well, salesforce has been able to make a small dent in those companies, nothing really earth shattering.

    Docs, communication, email are essential, but ultimately peripheral ideas to the core of the business, and yes they are being outsourced to the cloud. Tell me when Verizon moves its provisioning to Amazon cloud or Google cloud, I will then believe in consumerization of IT. What is actually happening is the empire of microsoft which made bloated copies of electronic versions of documents and exchange offering commoditized email is being invaded by a host of companies able to do achieve better cost efficiencies than Microsoft which cannot reduce its prices as it is locked in an older business model. I never really considered Microsoft to be an excellent enterprise company. A company hawking email and office which can be replaced by cheaper cloud models is being dethroned.

  5. Dave DeCaprio

    Way back in the day, I’m sure an article was printed (actually printed, since it would have been the early 90’s, before there was an online) talking about how Lotus Notes was so successful precisely because it put the power in the hands of the people. In the early 90’s, when Notes was roaring ahead in market share, it was because it allowed employees to build their own workflow applications rather than depending on the internal IT department at the company to do everything.

    Notes gave you software as a service, user-driven applications, even a sort of app store, way back in 1993. Of course, it depended on a central IT infrastructure and didn’t integrate with the internet. Those things were bolted on, and I think the product is probably capable of less now than it was 20 years ago.

    In another 20 years today’s generation of innovative apps will fade quietly into history, probably because once again there will be another level of democratization.

  6. Nitin Borwankar

    “Men — and it was mostly men — in blue suits and white shirts with serious expressions would sell complex solutions to large enterprises.”
    That should read “Men — and it was mostly men — in blue suits and white shirts with serious expressions would sell complex solutions to * other men in blue suits and white shirts with serious expressions * thereby underscoring the “we do business with people like us” principle that pervades the enterprise.

    • Tim Todd

      > in blue suits and white shirts with serious expressions

      Totally absolutely hilarious that the author of this article added the bit about “serious expressions”. Its so true, these sales people were often frown faced to which the late Jack LaLanne would have a field day poking fun at. As the Joker from the recent Batman movie would ask, “Why So Serious”? LOL big time! If you read the Wired Interview with Steve Jobs in 1996, its crystal clear that he was very worried then that Microsoft would own the Web (that was a very realistic concern). Its good thing that Billy Boy Gates didn’t own the web (Steve Ballmer can throw chairs, pretend to stomp on iPhones and laugh at the iPhone, and scream “Developers” until he hyperventilates but it won’t make a difference). Just as long as we don’t have Google becoming the NeXT Microsoft then the world will be kept in checks and balances.

  7. Cimarron Buser

    The consumerization of IT, and the “shadow IT” organization is growing. In addition to the apps that users can get from an App Store, companies also have the opportunity to build custom Business-to-Employee apps that make their employees happy and productive.

    In the not-so-distant past, creating “enterprise apps” was costly and time consuming. Building for Blackberry or Windows, burning the apps onto devices, rolling out.

    But now, iPhone, iPad and Android apps can be built in relatively short time. So instead of using the “off the shelf” Dropbox or app, companies can build custom apps using the APIs from these cloud-based providers with powerful “mash ups”.

    There are also newly emerging Enterprise App Stores to help developers create these apps, and allow IT professionals to regain control by enabling them to easily deploy and manage these new apps.