When technology passes from one generation to another, it creates opportunities for new leaders to emerge in place of the incumbent vendors. We saw this when Oracle, SAP and Peoplesoft consigned once-powerful names such as Cullinet, McCormack & Dodge and MSA to the scrapheap of software history, or when Excel and Word elbowed aside Lotus 1-2-3 and WordPerfect.
The software market WebEx is far better placed than Salesforce.com, Iyar believeswill get shaken up again as we transition to the Web 3.0/enterprise 3.0 era, sweeping away old application categories as functionality coalesces around new pain points. The vendors who successfully position themselves around those pivot points will be the ones best placed to become the new application leaders. No one yet knows for sure what these new application pillars will be, but it's a question that's exercising the minds of forward-thinking users and vendors alike.
Last week I wrote about the views of influential CIO JP Rangaswami and his vision for what I've called The four application pillars of enterprise 3.0. I've also been speaking to a number of on-demand vendors about their thoughts and aspirations. One of the most interesting discussions I've had was with Subrah Iyar, CEO and chairman of on-demand web conferencing vendor WebEx. Although the company commands much less airtime than on-demand media darling salesforce.com, WebEx has a better claim to be the leading vendor of the two, with higher revenues and a much bigger customer base, as Dan Farber described last month in a posting about WebEx's ambitions. What's more, Iyar is confident that its core online meetings application is far better placed to become a pivotal Web 3.0 application than its rival's salesforce automation (SFA) service:
"Every business user needs meetings," he told me. "Not every business user needs SFA or CRM." His line of thinking is backed up by Rangaswami, who named 'conversation' of one of the four application pillars of the future enterprise — whereas CRM, as a classification that's rooted in the previous generation of applications, is more likely to get split up between this and the other three pillars of publishing, discovery and fulfilment.
Iyar realizes, of course, that 'conversation' is a lot more than just web conferencing: "Meetings is a great business utility. It's a very deep business utility. But I want to have other utilities around meetings." That's why WebEx is currently on a strategy of expanding its offering to encompass a range of different forms of person-to-person collaboration. This began with the acquisition earlier this year of on-demand vendor intranets.com, and the rebranding of its hosted collaboration suite as WebEx WebOffice in October.
WebOffice — as anyone with any common sense would expect from a web-based office suite — is all about collaboration. "We wanted a single metaphor within which users can use a suite of utilities," said Iyar. "WebOffice is our metaphor for delivering our suite of business web services."
Users will be ready to gravitate to a new suite metaphor because no one wants to hop between a multitude of different environments to get their work done, he explained. "Users will need a single place to go — to live in a virtual world. Business users go the office. I want them to go to WebOffice."
Once there, they will of course be able to access WebEx webconferencing, along with document sharing, messaging, a group calendar and a shared database manager. It doesn't stop there, though, because Iyar sees these collaboration utilities as generic building blocks from which to create more specific applications such as SFA and CRM. "Now we will move forward and create web offices for sales people, customer services people ... then the next step is to provide web offices for particular industries."
Claiming access to 2 million business users through its existing customer base, WebEx ought to be well placed to deliver this extended collaborative functionality to a broad market. If it can do that it will get a head start in the race to become one of the new application leaders, but naturally there are a few obstacles in its path.
Microsoft is probably the least of them. Iyar doesn't see the company's moves into on-demand with its recent Live! announcements as anything to worry about yet. He believes the vendor needs to figure out what it's going to do about its server-based licensing model and its channel partners before it becomes a threat. "We start with a clean sheet of paper and a different design point. Microsoft has not changed its spots," he said. "Microsoft has been in denial to some extent — it has a big fear of cannibalization — and it should be afraid of it."
A more pressing challenge will be extending functionality fast enough to stay ahead of other on-demand competitors — especially when the likes of SocialText's enterprise wiki platform and Writely's collaborative word processor are pushing the envelope of innovation. Iyar doesn't rule out acquisitions as part of the mix: "We will provide our own [new functions]. We will OEM or acquire. We will distribute via private label within that."
The biggest obstacle though has got to be persuading users to do more with WebEx than simply webconferencing. Just because the extra functionality is there, it doesn't mean users are going to take advantage of it. There is a hard core of 300,000 mostly small business users from the intranets.com acquisition who are existing users of that wider functionality. But getting the 2 million enterprise users of WebEx webconferencing to adopt WebOffice for other forms of collaboration — especially if they have existing corporate standards in place — may prove to be a hard sell. I think the company's stated aim of getting those users onboard by mid-2006 sounds a trifle over-ambitous, unless it can pull something more out of its hat to inspire them to move across.