Enterprise software may not sound exciting to the average person, but with the total annual revenue projected to reach $438 billion dollars in the next three years, it becomes apparent why it’s got so many founders and investors excited.
Looking at the types of software enterprise organizations are investing in, it’s largely still the same as it was 20 years ago with money flowing freely into categories like CRM and other database management systems. While these traditional categories of software will individually take in billions, there is a much larger opportunity at hand here. A multi-trillion dollar one.
Digital Transformation: The Time Has Come
Digital Transformation is far from a new concept. It was talked about in the early internet days, again in the late 2000’s and over the past few years, it’s gained steam once again. Massive organizations across all verticals are undergoing a digital transformation at a pace never experienced before.
Legacy companies such as Ford have been forced to alter their identity, even going as far as declaring themselves a software company. This isn’t something they decided they wanted to do; it is something they have realized must take place if they want to survive.
As large organizations begin to undergo this digital transformation, the tools, software, and systems they previously relied on will have to be entirely reinvented from the bottom up.
Digital Transformation: The Opportunity
Looking at the industry as a whole, the multi-trillion dollar opportunity will be for the companies who can develop these new software tools to help traditional enterprise organizations make this digital transition and solve their core problems such as fragmented data.
Discussing the true scale of this opportunity, Ken McElrath, CEO of Skuid, stated in a recent Forbes interview, “Enterprise apps should not force people to think like machines, spending exhaustive amounts of time researching software, drafting requirement documents, sourcing vendors and writing code.” Instead, McElrath wanted the behavior of apps to mirror the humans who use them and ultimately empower everyone to thrive in today’s digital world.
Digital Transformation: The Problems to Solve
With trillion dollar potential comes trillion dollar problems. Here are some of the top challenges that digital transformation software will need to address:
UX: In the past, when it came to a clunky looking user interface, it was accepted that, well, that’s just what enterprise software is. Today, however, that’s starting to change, and the consumerization of business software has begun.
That old clunky user interface is no longer acceptable, and employees are expecting the same quality experience they receive for their business software as they do their personal software.
Development: While people like Mark Zuckerberg have stated that everyone should learn to code, we know that not everyone will. The ability for anyone to develop their own software stack without the need to know how to code will be critical in this transformation process.
Citizen developers, as they are referred to now, will become more and more relevant and the age of “no code and low code” will be here to stay.
Fragmentation: The enterprise software industry remains complex and highly fragmented. A recent IDG report stated that on average, an enterprise organization today has nearly 400 different pieces of software it relies on.
This level of fragmentation is leading to data quality issues which prevent organizations from developing truly actionable insights from their data. Speaking about just how big of a problem this has become, McElrath stated, “Trying to ‘defrag’ all data enterprises mine and unify it into a seamless app experience is not only expensive, it’s a recipe for bad customer experiences, low user adoption rates, slower sales cycles, and painful and disjointed workflows that don’t match a company’s business processes. All of this keeps people from thriving in the digital enterprise and has a massive impact on both costs and revenue.”
Digital Transformation Photo via Shutterstock
There is so many opportunities in this digital age. The boundaries are now but illusions. It is important to tap this opportunity once it is there. Times move fast.