How to run a small business

Yesterday I dropped off my wife's car for an oil change.  My mechanic is a small independent one.  He is a typical small business owner.  He always has greasy fingers and runs between his tiny 6-by-6-foot office and the next door repair shop.  When the office phone rings, he is the one picks up the phone to talk to the customer.  Often despite his best efforts he answers the phone after several rings because he has to rush to the office from the repair shop.

When I dropped off the car, the shop was busy as ever.  There were three customers waiting to speak to him.

After waiting for my turn, I asked him.

Wishful thinking: Enterprise licensing and deployment platform

Having worked for enterprise software company, I have seen many times where brand new software license gets shelved and never to be deployed.  I say "never to be deployed", because by the time customer decides to deploy either there is a new version of software available, or the product gets merged with some other product, older product as sold effectively getting EOLed.  Surprisingly this actually happens from time to time.  Hence enterprise software sales person talks about separating selling versus delivery.  Buying does not necessarily mean it will get rolled out immediately.

This happens for several reasons.  Having to spend the left-over annual budget at the end of fiscal year, looking for a solution and buying it before the year end.  Not having internal resource to train, deploy and manage the software once it has been purchased.  Incorrectly estimating the number of users who will be on the system.  And even the purchased system not solving the right problem.

Good enterprise sales person is one who can identify these opportunities and take advantage of them.  It takes uncanny skill of understanding budgetary cycles, political power distribution and knowing which button to press to get the biggest deals closed without slipping the deal.  In practice many enterprise sales people can separate selling versus delivery so well that they can sell something without having the actual product.

Users are not buyers

I work in enterprise software business.  So I know a thing or two about peculiarity of enterprise software industry.  

One thing that distorts the enterprise software market is the fact that buyers are not the users.  Because those who sign the check are not the users (although it's changing somewhat due to BYOD and Consumerization of IT, it still remains as more common way of software procurement), there are all kinds of distortion in the market.  In enterprise software world, there are many instances where customers pay for licenses not because they like the product, but because it's a product that they know and fear.

Software product does not win by its merit alone.  It wins because of disciplined sales team and great team work in addition to a good product.  But it keeps the users because buyers are often reluctant to migrate out of the current system, or even worse vendors don't make it easy to migrate to other solutions.

But consumer space is a lot different.  Everyone makes their own choice.  When we don't like the choice, we don't hesitate to look for other alternatives or hack our own solution to solve the problem.  Each user is the buyer.

It should be funny, then, to notice the similarities between social networking sites and enterprise software products.

Fragmented enterprise collaboration tools

A: “What collaboration tools do you use?"

B: “We have Sharepoint for corporate policies and HR; Connections for product team; Jive for product marketing team; Github for engineering team; and some teams are using Yammer.  Oh, we also have Salesforce Chatter for sales team, and our marketing team is active on Facebook Page, Twitter, LinkedIn and Wordpress blog.”

I have been asking people who work at enterprise to name their collaboration tools.  The answer is almost always not one tool, but multiple collaboration tools.  I then ask if they have a plan to unify and agree on single collaboration tool.  Again the answer is almost always no.

Clearly it's counter-intuitive to have separate islands of collaboration tools.  Collaboration tool, by definition, is meant to make communication and working together easier among team members.  Instead of using multiple tools segregating users, it makes much more sense for an organization to choose one tool where everyone can be available.  More users will create network effect, and collaboration tool will be that much more valuable.

But that's not the reality.  Why is this the case?

Enterprise software market is ripe for big disruption

I wanted to share a couple of articles that I ran across today that illustrates how enterprise software market is ripe for big changes.  As I wrote earlier about enterprise software, there is an big opportunity for disruption for enterprise software market.

Glory days of Oracle may be behind us
unless it reinvents itself

WSJ ran an article today talking about how Oracle customers are frustrated with high maintenance fee.  Although customers are paying annual maintenance fees, most of them are forced to do so because of "end of support" of earlier versions.  In order for customers to upgrade they must stay current with annual maintenance subscription, and they have no choice but to continue to pay Oracle to get software upgrades.

It used to be normal for big enterprise to make a top-down decision about consolidating one vendor's product to reduce the cost of fragmentation.  As a buyer, it made a perfect sense to choose one vendor rather than multiple vendors.  But often these buyers were not actual users.  Big if, which often was not true, was whether user adoption will follow once system is deployed.  Enterprises assumed once you build it, users will follow.  Anyone who worked with enterprise system will know this is not the case.

Strange world of enterprise software

I work for enterprise software company.  Now that I have been wearing product manager hat for about a couple of years, I can see strange dynamics going on within enterprise software business at first hand.  Those of you who had enterprise software business background will know what I'm talking about.  Enterprise software market works with different rules than end-user software market.