The Enterprise Disruption

I think there’s a slow but dramatic change coming over to enterprise computing.  This is simultaneously put into effect by multiple factors:

  • Open-source software
  • Cloud computing
  • Ubiquitous access to the cloud
  • Moore’s Law in hardware
  • User experience being shaped by connectedness

A few weeks ago, Peter Rip had a good post on the same topic.  He said:

Let’s fast-forward another ten years.  If the market price of
provisioning an application goes to zero more broadly, who is
impacted?  What does this mean for

  • SaaS application providers? 
  • Enterprise IT?
  • and vendors like BMC, IBM, and HP that dominate data center automation today?

Perhaps the value will shift from applications to infrastructure.
Security, disaster recovery, archiving, etc., will still be needed – as
services, not products. Freemium comes to enterprise computing.

We all know that the history of computing has been about platform
shifts.  Free is the next disruption.  Like all platform shifts, it
begins as a small but structural change in the economics of adoption.
It ends with the re-alignment of the market, with a couple of
survivors, and many more new entrants. 

I fully agree with his re-alignment point.  However, I think Peter’s overstating the value of the infrastructure.  Things like security and redundancy, while important, will be face with inevitable commoditizing forces, just like  operating systems.  I bet there are very effective disaster recovery systems out there (or under development), operating on the cloud and bringing down costs.

Where I think the real value will be created is the user experience side.  It will be things like good design and usability that will create differentiators and end up impacting the results that technology delivers.  And much more so than before.

A few years ago, an enterprise had to use "enterprise grade" solutions.  Others would probably not hold up.  You had to get an Exchange Server from Microsoft for your email hosting because the lighter apps would fall short in one aspect or another.  But today, the lighter apps are on S3 servers or on Google Apps.  The cloud is enterprise grade.  You can use GMail for your enterprise mail and it will be more secure and reliable than MS Exchange.

Who should be watching this shift in enterprise computing?   I think it’s the small innovators, players like  37signals or SelectMinds, who have straddled the enterprise fence, or consumer services like grou.ps or del.icio.us, who can tie in their service into the enterprise.  Their time has come.

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