The rules of the game have changed for enterprise software. In Aaron Levie’s recent article on TechCruch, “Building An Enterprise Software Company That Doesn’t Suck”, he breaks down the changes in enterprise software business into three categories. Levie details how differently enterprise software is developed, sold, and supported today versus just a few years ago.
I found Levie’s perspective interesting – especially because it matches the model that we have followed at Pentaho to achieve great success.
1. How enterprise software is developed today.
It’s no longer about products that are feature-bloated merely to get into RFP wars and win multi-year, large contracts. Those days are over – all they produced were complex technologies that had no real usage.
Now what drives demand is the real business application of software. Success is in user adoption, not in feature checklists.
This is exactly why an open source business model has been successful for enterprise software. The products are developed because there was a real business need for them. Many features are implemented and submitted by the community members, because real users need these capabilities in their business applications. This is a true outside-in, end user focus.
2. How enterprise software is sold today.
Long gone are the days of interruption marketing and trying to sell to every poor soul who happens to pass by. The buying process is much more bottoms up today. As Levie puts it, “With web-delivered, freemium or open source solutions, we’re seeing viral, bottom-up adoption of technology across organizations of all sizes.”
The open source model allows users to buy into the software (aka use it) before actually paying for it. Rather than knocking on every door to find an interested buyer, which is the model many enterprise software companies still follow, our sales organization is focused on actually helping customers navigate their options, providing consultative support and knowledgeable market advice.
3. How enterprise software is supported today.
In a traditional software licensing model, the customer pays a hefty upfront fee, just to get entitled to use the software. In addition, the customer has to pay for an annual subscription and support.
Luckily, buyers have realized that there are better options out there. As Levie rightfully notes, “The unstoppable trend toward ‘renting’ vs. ‘buying’ software, means the vendor gets paid only as the software continues to solve problems for its customer.”
At Pentaho we are committed to our customers’ success and our high customer retention numbers speak to this.
Interested to find out more about our software? Download it now.