Enterprise Software Market is in trouble

The problem with Oracle’s of the world is they think “one solution fit all” will continue to work—just like it used to be. It used to work because the software wasn’t readily available and distribution was hard. The Internet has solved both problems. To their clients (CPGs, Telcos etc), the problem is the assumption that technology is the hardest part. And if we can sort that out the rest will be good automatically—somehow. The irony is technology is hard. But even harder is understanding needs of people working inside your organization. The process should start with the customer—people using the technology—rather than the new version of Oracle application stack.

Here is a typical sale cycle inside enterprise consultancy. The vendor approaches the CIO and tells them about the awesome new solution, which is often a newer version of something already deployed, these number of companies are already using it etc. Or it’s the other way around and client approaches the vendor with a vague understanding of the actual problem. The CIO then consults CEO or other C-level executives and they collectively decide whether their company needs this solution or not. Of course, none of these people are going to use the deployed solution. The people who are going to use the solution are normally informed at the last minute. They normally have no say in the decision-making process. To avoid pissing off these end users, companies have middle management whose sole job is to cajole them and somehow make everything work.

Of course, it never does. Most enterprise solutions are notorious for not working most of the time. Yet it’s the process which is a bigger problem, not the actual solution.

If you reverse this process you can actually gain a much better “win-win” situation. The consumer market is particularly good at this. Since everyone has to pay for the things they will be using we, as consumers are conscious about which phone to buy and which app/game to pay for. The same is not true for the enterprise market. People don’t get to pay for what they use. And any deployed solution will have thousands of users and it’s not possible to get a 100% consensus on any one product. Someone is going to be unhappy all the time. And that’s OK unless that someone is not everyone.

The alternate approach is to understand consumers first and technology second. So if a vendor approaches you with a solution, don’t just let them talk to your CIO. Ask them to talk to everyone inside the company who is going to use their solution. Ask them what they understood of the actual problem? And how the solution they are proposing is going to improve the productivity of about 80% of end users. The same is true for vendors. Don’t work for clients who insist on just meeting with CIO. Ask them that you need hands on understanding of their company. That you need to talk to the actual customer—people who will be using the solution.

That seems like a lot of work without actually talking about the technology which is often counter-productive for IT departments. But it’s not. The thing about any new product/solution is no matter how good it is, it’s a productivity killer in the beginning. And if you have thousands of employees that means hundreds of thousands of hours of productivity before any signs of gain. Add to that a solution that comes out of the blue for most people. On the other hand, if you involve your users and ask for their input, they will be more likely to invest time in learning it once it’s deployed. And since this is something they will be doing on their own and not necessarily because their managers asked them to, they will spend extra hours to make the process quick. Much like they do when they buy a new phone or purchase an app.

With that said this isn’t something new. Most companies know this already. The problem is the pre built often out of line products, longstanding vendor contracts and sometimes personal relationships built over the years. And to fend off any doubts, Larry Ellison often comes out with ever new plans of Oracle changing and embracing the cloud, AI etc. I get the talk for talk but it’s hard to change the 30-year-old business model rooted deep in your DNA. I am not saying that Oracle is not doing anything in the Cloud. I am saying that it doesn’t matter. They are not a Cloud first company and that matters.

Consider this, anyone starting a new business today has no reason to buy an Oracle solution. They are expensive, hectic, and for the most part, don’t work. Their customers are big traditional corporates who are just like them—reaping the fruits of previous century’s tech. I am afraid that’s not going to last long.

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