The enterprise startup conundrum

The enterprise startup conundrum

Summary: Larry Dignan's article about enterprise startups is an excellent primer for those wanting to pitch Zack and I but there are other issues I'd like to surface. Especially that which talks to the Silicon Valley echo chamber.

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Larry Dignan's article about enterprise startups is an excellent primer for those wanting to pitch Zack and I but there are other issues I'd like to surface. Especially that which talks to the Silicon Valley echo chamber.

This week, Yammer took top honors at TC50. I have no direct insight into why because for me it falls squarely into the trap of riding a hype cycle but without clear differentiation as an enterprise offering. On the other hand, ESME flopped (comparatively speaking) at SAPTechEd 2008 DemoJam despite there being broad agreement among my peers that it was the most innovative 'thing' on the competition roster. Check for yourself and see what you think when lined up against the others.

The point being that what the Silicon Valley blogerati believes will make a great bet and what those who are living with enterprise code think are two very different things. There are many ways to argue the DemoJam case. One view proffered by Vinnie Mirchandani as we came away from the hall: "When you look at most of the demos, they were really filling in gaps that SAP should have already filled. In that sense, they are something of a smack in the eye to SAP from its own developer community." My take is a little different.

A straw poll among that audience, those in the Community Clubhouse and elsewhere demonstrated that 90-95% of attendees have never heard of Twitter or its growing list of clones. Simply explaining the microblogging/microsharing concept is much tougher than people think. I know because I spent time with people who were curious. The first question was almost always: "How is this different from IM - we've been doing this for years?" I have a solid answer for that but the fact remains I still have to go through a BIG hoop just to get to the starting blocks.

Enterprise developers are far more discerning and knowledgeable than many might believe. They know their stuff and are not easily fooled. They are time constrained and won't waste time on anything that doesn't have an obvious ROI. They won't even try something new out unless there is clear utility. It's not worth their attention.

When I think about the team involved with ESME it is easy for me to argue they are at the forefront of thinking in the enterprise world. Some are Irregulars who bring 'code' skills to our merry band. All are folk who are hungry for innovation. A good number are SAP Mentors, people who freely give huge gobs of time and expertise to the 1.3 million strong SAP developer and 300,000 strong business process expert communities. They are in a sense a highly distributed micro version of Silicon Valley's hotbed of invention.From a project perspective, they are a dream team.

Many will say "You would say that," (Disclosure: I'm involved with ESME.) But when one of the folk turns up showing a new, elegant and working WebDynPro interface developed on the plane ride to the event, it's hard to argue against that position. Or how about the two guys who spent a few hours hooking up ESME to an SAP CRM system so we could show SAP code running behind ESME and so show a business scenario context? These are just two examples of folk who are heroes in my eyes because they get things done that matter to the enterprise but with the innovator's twist.

I have always said that the new breed of consumery applications can work in an enterprise context. But enterprise as a whole is years behind the consumer curve. Enterprise has bigger fish to fry. Virtualization, prediction markets and sensor technology figure far higher on the enterprise radar than the next Twitter clone.

Enterprise won't come kicking and screaming into the enterprise 2.0 world unless content, context and purpose are aligned. You've got a new Twitter? Get in line. So has everyone else. Even Oracle.

Therein lies the conundrum. Developing a new Twitter is easy. Developing one that as enterprise context is and order of magnitude harder. Consumery mashups look tasty but they need a business context to become marketable. And all these applications need to compete against technology that is delivering against immediate business need. Not one that is manufactured by someone who thinks social anything is the next big thing.

All of which means that this week has put the enterprise/consumer market divide into sharp relief. There are lessons for us all in there.

Topics: Social Enterprise, Banking, CXO, Enterprise Software, SAP

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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2 comments
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  • not all negative

    Dennis, given that these were almost amateur teams doing stuff part time things, shame on me if I do not acknowledge what they showcased was innovative - like the Canadian Pacific use of GPS to guide workers to specific points on their thousands of miles. I also agree the ESME team used pretty contemporary social stuff.

    SAP cannot dream up every innovation but the fact that they did not iPhone access to SAP or that the spell checker won the Demo Jam contest when the first one in the industry came out in late 70s was jarring to me ...
    vmirchan
  • Enterprise / Web 2.0 Consumer divide

    <p>Dennis,</p>

    <p>I agree with most of your ( and Larry's ) analysis,
    but I think the root cause of this divide is a certain
    mindset of how all this Web 2.0 consumer stuff should
    be brought to add value to the enterprise.</p>

    <p>The enterprise really doesn't need another internal tool, it is

    full up for the most part and productivity gains are at the edge of

    what SAP doesn't do.</p>

    <p>But, the level of Web-enabled automation that can occur across

    the firewall between the enterprise and it's customers or between

    customers themselves is a sad state, e.g, I have this big old

    Customer Relationship Management system that my customers don't

    touch...does anyone else see the irony here?</p>

    <p>I would argue that one of the most important <em>enterprise</em>

    CRM systems today is Google AdWords and Analytics. If you can make

    this paradigm leap then you will get my point. This is a critical

    marketing system for most companies that enables them to reach out

    from behind the firewall across the Web to engage their customers.

    Other Web 2.0 companies that do get this include <a

    href="http://www.zendesk.com">Zendesk Web 2.0 help desk</a> which

    connects your help desk ticketing system seamlessly to email,

    forums, widgets, RSS etc that your customers use on the Web. Or, <a

    href="http://www.getsatisfaction.com">GetSatisfaction</a> which is

    crowd-sourcing support and enables you to engage customers in their

    natural environment.</p>

    <p>My advice to enterprise developers and startups who want to make

    the most of Web 2.0 consumer technologies is to stop looking for

    new ways to transition them to automate internal processes for

    marginal productivity gains, and start looking for new ways to

    engage customers across the firewall for huge revenue and service

    gains.</p>

    <p>by <a href="http://www.chaotic-flow.com">Joel York</a></p>
    <p>at <a href="http://www.chaotic-flow.com">Chaotic Flow</a></p>
    ChaoticFlow