Symphonious

Michael Krigsman sticks it to Nick Carr and includes an interesting assertion: that how good software is can be decided by how much revenue it drives:

Nick, please let the market decide whether enterprise software is “good” or not. There’s a simple metric for measuring this: it’s called revenue. Just for kicks, compare the revenue of enterprise companies, such SAP or Oracle, to consumer-oriented firms such as Twitter (click to follow me).

Interesting point, but wrong. The amount of revenue software drives is determined by a number of factors (go ask an economist for the full list), some of the really key ones in the enterprise vs consumer questions include:

• The ability to pay of the target market. It doesn't matter how good the software is, if the customer only has $10 that's all they can pay for it.
• The size of the market it targets. Brilliant software for a niche market will generate less revenue that average software for a big market.
• The amount of and quality of competition. This is the really big point that Michael misses - if you are the only solution to a big problem for people who can afford to pay a lot, you will make money hand over fist almost regardless of how bad the software is.

A much better way of judging how good software is for a mature market, would be how much room there is for a new competitor. If someone can enter the market and solve the problem better than you they'll take away your customers and make money instead. Unfortunately, this is a particularly complex metric because you also have to factor in how rapidly the entire market is growing etc.

This of course leads us to the question, is the enterprise software arena ripe for an upstart with a far more sexy, usable product to come in and take a lot of market share? To a degree yes, but only if they can also solve the existing problems that are well served by enterprise software - support, scalability etc. All the things that the enterprise sales process currently focuses on.

The conversation around enterprise software goes on, with a couple of good responses to my last post that I want to highlight. Firstly, ddoctor (aka Dylan Just who recently started working here at Ephox) in the comments:

I’m thinking of making this one of my career goals - making enterprise software not suck.

Then you're very much in the right place - that's what we do…. He goes on to give some very good advice on designing good UIs, but it misses a key point that I was trying to make in my last post:

Enterprise software doesn't suck because the engineers can't do better, it sucks because the sales process prioritises things in a way that guarantees that it will.

If you want to fix enterprise software, you have to fix the sales process - you have to get real end users involved in making the purchasing decisions and clearly demonstrate the financial benefits of good UIs in terms of user productivity etc. Our product manager, Damien Fitzpatrick1 makes this case quite well:

For example, lets take a team of 50 knowledge workers getting paid about $30 an hour each. As part of their daily tasks they have to add information to a wiki, to a blog and perhaps to a content management system. To do this our hypothetical knowledge workers will be using my favourite web word processing interface; EditLive!. Conservatively I’m going to assume that we can save each one of these people 10 minutes a day (that’s only about 60 clicks a day). Over the course of the year this means a saving of $62,500 just through a few less clicks.

That's the kind of argument you need to get into the sales process for enterprise software because it's simply not on any of the request for tender checklists or feature requirements right now.

Discipline and Punish2 also picked up on my post with an interesting take on things. I particularly agree with:

Bad usability and poor extensibility are thus only symptoms of the underlying disease: a lot of enterprise software is clearly built with centralization as its founding principle. It's designed to appeal to managers and executives but especially a particular kind of manager who wants top-down, command-and-control abilities over her organization.

It's true, most enterprise systems focus on the management of data rather than the creation or the actual use of data, however I suspect there's some confusion between the trends in the consumer space and the trends in the enterprise space:

A natural consequence of this mindset is that Google's done an excellent job building an open, extensible, and inclusive platform that most enterprise vendors can only describe in their marketing literature. If Google does disrupt enterprise software it won't be because of its army of PhDs or any kind of "Google Magic." Rather it will be yet another data point in the long, long history of "big", open technologies disrupting "small", closed technologies.

The catch here is that the trend towards open technologies with a horde of small vendors developing plugins, widgets or whatever they happen to be called, is very much a consumer trend. There's no such trend in the enterprise world, in fact it's quite the opposite - enterprises are more and more inclined to consolidate on one big vendor that supplies the entire stack. This trend is picked up on in all the major reports I've read (Gartner, CMSWatch etc) and is showing through in the number of deals we're seeing with multiple CMSs being replaced by a single instance from one vendor. It's also showing through in the success big vendors are starting to have in the new collaboration and social software market which until very recently has only been filled by small players. Expect those small players to either grow up fast, or be run down by the big players. It's very difficult to do well in the enterprise market if you're a small company and impossible if you're a small company without good partnerships and relationships with the big players.

Enterprise software will become more usable over time, but it won't be because of the threat of Google or openness running it down - it will be because enterprises start to realize the true productivity cost and you'll start seeing the argument Damien put forward more and more in enterprise sales. Better quality software directly helps your bottom line. That's where the changes need to drive from if they're going to succeed - not the desire for developers to make the world a better place.

It may be sad, but money makes the world go round.

1 - who seriously needs to blog more often….↩

2 - I couldn't find an actual person's name anywhere on the site….↩

I original skipped over Robert Scoble's post, Why Enterprise Software Isn't Sexy, it just seemed too obvious to be worth reading in much detail. I've been working on software that sells to enterprise customers for the past 6 years or so and no one cares about it, but release a poor version of that software for the consumer space and everyone goes ga-ga over it. EditLive! and eWebEdit Pro have been bringing WYSIWYG editing to the browser for years and no one cared because they were sold to the enterprise, but when Google put out Google Docs everyone went crazy about it, even though it has half the functionality and twice the bugs.

There's a ton of people going into the obvious reasons why people don't care about enterprise software, mostly because the vast majority of people don't ever have to make decisions about which enterprise software to use. Bob Warfield has a pretty good response to most of that commentary.

I tend to think that the difference between consumer and enterprise software isn't in the actual technology - it's in the sales processes. Consumer software is sold on the basis of high volume, low prices whereas enterprise software has very little volume and very high prices. It's amazing how much comes out of that very simple difference.

With huge numbers of direct customers, consumer software providers are outright scared of support costs. They have to make the install seamless because they don't have the resources to help people install it. They have to make the product high quality because they don't have the hands on contact to find out about half the problems and they don't have the support resources to handle the feedback they'd get anyway. There's almost certainly a free download that you can get started with straight away so everyone can get their hands on the product to try it out and talk about it - right then when they hear about it.

Enterprise software however, often close fewer than 100 deals a year (I know many enterprise companies who close less than 10 a year and are still doing ok). The price points are huge and the sales cycle is much, much longer - at least months, if not years. Ephox has had potential clients that took over 2 years to close and we tend to have relatively short sales cycles. That means that a client of enterprise software is going to hear from at least one sales person directly, usually multiple sales people, pre-sales engineers, professional services etc etc etc. Enterprise sales require building relationships with clients, not just an online store. That relationship and the cost of the sale means that you are selling your support services as much or more than the product itself. Quality doesn't matter anywhere near as much as long as you can show you have guaranteed response times and the support team to get things working again. Installation is a nightmare because you're going to be working with a professional services team or a technical partner anyway. The cost of all those people doesn't seem that much because the software itself is so expensive - if spending another $50 000 makes your $300 000 CMS roll out successful you'd be a fool not to pay it. Try asking a consumer to pay an extra 15% of the purchase price to get help to install the product and it's not going to end well but that's expected in the enterprise sales model.

Don't forget as well, that consumer software generally sells directly to the end users, whereas enterprise software sells to CIOs, CEOs and CTOs who force it on their employees. A bad UI generally kills a consumer application but it's par for the course with enterprise software because enterprise software isn't sold to the people who actually use it. Listen in on a sales call for enterprise software and you'll hear all about scalability, integration, security, interoperability, support, customisation, more support and corporate compliance. The UI only gets a passing mention and then it's usually about how everything will be in one place so employees will be more productive or how they'll have all this information at their fingertips rather than on how much user training is required or how many clicks it will take to do anything. We can deal with usability problems through our support team - we mentioned how reliable our support is right?

The bottom line is that most enterprise software sucks big time. It may provide huge business benefits over manual efforts or it may make new business models and processes possible, but the vast majority of people are the ones that have to use it and the UI sucks. Just look at the problems enterprise roll-outs have with user adoption and you'll see that but it just isn't affecting the sales cycle enough to cause change. The good news is that it's starting to change - all this buzz about consumer software is starting to get the more adventurous knowledge workers into technology and make them aware of how things should work and that's starting to put pressure back up the business chain and affecting the enterprise software process. Expect to see consumer technologies and styles making the jump over to the enterprise more and more as businesses realize that it all those extra clicks add up to serious costs. Just don't expect it to change fast - nothing in the enterprise ever does.