The enterprise software business model is broken.

August 16, 2006 § Leave a comment

[ Re-posted on my current blog: The enterprise software business model is broken ]

Andy asks whether enterprise software is finished. 

My view from the trenches is that the business model for enterprise software (and hardware…) is broken. They (particularly the BI guys) reportedly spend as much as 90% of their income on sales and marketing.

The number of sales people that I deal with at these companies is mind numbing. The number of reseller layers that get a cut of my license fees is shocking.

These companies could learn a huge lesson from the “web2.0″ upstarts by shortening their development cycles and moving their engineers out towards their customers. How do they know what needs to be improved, what needs to be simplified or what needs to be added? It certainly isn’t because I’ve told them.

What I really want are a set of building blocks that stack together nicely, use industry standards, can be interchanged if I’ not happy, can be managed by fewer (possibly better) people and can be consumedly easily across networks.

Is that too much to ask for?

BTW, my favourite example of getting this right is Netezza. I load my data into their box and my queries instantly run 1000x faster. It uses no proprietary SQL, has no indexes or tuning and I only need 1 DBA. Awesome.

Future post to come on this topic, but I think the market is looking for a complete solution that is relatively hardware and OS agnostic but does everything else. It also needs to come totally pre-configured with best practice set-ups. I’m not holding my breath.


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