When you think about the next wave of enterprise software company creation, what do you think? Why the next billion-dollar enterprise software company comes born outside of the U.S. Often companies that are considered to be “local” will discuss how the upcoming wave of developer-oriented software companies will drive the $1.3 trillion enterprise software industry, powered by hot topics like open source and flexible API development. Yet, a big part of that discussion centers on the U.S. The most successful companies come from the United States and this is beginning to change.
Just recently an acquaintance told listeners from an enterprise software company that there is a certain type of software in the works that will be targeted at the U.S. market. Specifically, this individual claimed that the new software would be focused on the developer, rather than on the end-user. This is quite interesting, but it’s not all that easy to believe. The fact is, the current U.S. market for software development is already quite crowded, and many of the best programmers and developers are based in Asia.
As an enterprise software company, your primary customers are not typically located in the U.S., although they may be located in countries around the world. In fact, over 60% of your customers are based in Asia, according to industry experts. For that matter, many third-party enterprise applications vendors also have global ambitions and would love to tap into the U.S. market for software development and/or acquisitions. In other words, if you want to get a billion-dollar deal, you will have to find ways to penetrate the U.S. economy, and that’s where the real competition comes in.
A third alternative, which is currently taking up increasing steam, is the development of web-based mobile enterprise applications platforms. Some analysts think that these platforms will be much more attractive to enterprise software companies than the traditional desktop-based systems we see today. One reason why they think this way is because the enterprise software companies can more easily sell applications through these mobile devices than they can on a desktop. These apps can also integrate with enterprise software via the internet.
When an enterprise software company gets a multi-million dollar deal, they are usually looking to acquire another company or two in order to continue growing their business. The idea is to build partnerships with smaller companies that generate a portion of their revenue. That way, the enterprise software company can build a team of specialists that is capable of turning lead into revenue, while also having the ability to focus on end-user demand.
Taylor told listeners at the Money Business podcast that there is a misconception among some companies that their success is solely due to the expertise of their existing CRM sales and customer service staff. While he acknowledged that the experience of the sales force is indeed very important, he added that a strong, data analytics-rich CRM system is also vital. In particular, he stressed that having strong customer relationship management functionality is important for a company that wants to successfully gain an edge over its competitors. This is because strong customer relationship management software enables a company to gain a better understanding of who its customers really are. This information allows the company to provide more personalized service, in other words, build a relationship that is more friendly and more likely to result in sales.
Taylor said that many software companies have failed by not focusing on the needs of their customers. This includes not only companies that have acquired large cloud-based solutions, but even small organizations that are beginning to consider moving their computing infrastructure to the cloud. He added that most of these failures occur because IT and software engineers are not trained specifically in developing a business intelligence platform. Furthermore, many of these engineers are not familiar with the metrics and reporting capabilities of an ESB.
Taylor also addressed some criticisms of cloud-based ERP and CRM by claiming that while they may be appealing to companies with the most money, they do not appeal to many employees. He cited the lack of training and the perceived cost of using an ESB as the reason for this issue. Additionally, another issue that he stated has been a barrier to the widespread adoption of these two enterprise systems is the feeling that employees already have enough IT resources on their own. According to him, the lack of IT expertise is what has held back the adoption of cloud-based ERP and CRM software.